Page 142 - RusRPTOct21

under the SMART LNG JV. Price per unit of $200mn, annual revenues of $27mn. The total annual contribution to consolidated NI is $8mn, +2% to our estimates. This would imply a 12-mo TP of RUB127, up 2% as well.
9.2.13 Other sector corporate news
European Medical Center (EMC) is Russia’s leading provider of premium quality healthcare services and over the last 12 years has invested more than EUR 440mn to develop its best-in-class medical facilities.
In 2020, total revenues reached EUR 259mn, with EBITDA of EUR 97mn. The pandemic increased the need for private healthcare, whichecame one of the top ten private spending categories among Russian consumers in 2020. We initiate coverage with a 12-month Target Price of RUB 1,500 and auy recommendation (ETR of 56%). EMC’s shares have gained 11% since its IPO on 15 July,but still are undemanding at 10.5x 2021F EV/EBITDA.
Premium class platform in a highly attractive market. EMC provides a one-stop-shop for premium healthcare services at its seven multidisciplinary medical centres, three geriatric centres, a maternity hospital and rehabilitation centre. All facilities are conveniently located for its target customer group in Moscow and the Moscow region. The company uses international best practices, has developed the necessary expertise, and attracts leading specialists. The equipment that it uses is rare, or even unique, among Russian clinics. Robust 1H21 results were the first published financials since the IPO: total revenue reached EUR 135mn (+16% y/y), while EBITDA surged 52% y/y (EUR 56mn) with 10.3pp y/y improvement in margin (42%). The figures match our annual forecast trends, which imply the following for 2H21F: 9% y/y growth for top-line and EBITDA of EUR 60mn (41% margin), as the comparison case becomes stronger.
Capturing opportunities on an underserved healthcare market. The Russian healthcare market is mainly financed through mandatory health insurance, which makes up 77% of its total value. Private healthcare comprises only 17% of the total market and is fragmented, with the top five players accounting for only 14% of it. The key growth pillars for EMC are serving high-income customers (1.3mn people in Russia) and increasing the offer at its core clinics, as well as capturing a share of the outbound medical tourism from patients seeking specialised care in Germany and Israel. In 2021-25F, capex is EUR 70mn, which is toe fully financed by own cash flows. FCF during the forecast period (2021-25F) is sufficient to cover dividends and yield gradual deleveraging from YE20.
142 RUSSIA Country Report October 2021 www.intellinews.com