Page 126 - RusRPTJun19

Rocketbank. In 1Q19, however, the Ebitda margin improved to 44%, "thanks to solid top line with growth in payments segment more than offsetting investments in Sovest and Rocketbank," BCS Global Markets commented. Net income growth lagged behind Ebitda due to higher tax rate. Still, the results on both Ebitda and the bottom line came "far stronger than expectations," beating consensus estimates by over 25%. Following the strong results, the company has upgraded its 2019 outlook now expecting adjusted net income increase of 40-50% (versus previous 15-25%).
Following the publication of very strong 1Q19 results for Qiwi, which showed soaring earnings growth and margins offsetting the investment in development, market watchers have upgraded recommendations and target prices on shares of Russian electronic payment system. BCS Global Markets on May 20 upgraded Qiwi’s price target by 9% to $25 on "impressive 1Q19 IFRS and expectations of continuing momentum," while seeing more upside and reiterating the Buy rating. BCS GM now expects a 51% increase in adjusted net income for 2019, and estimates the valuation at attractive 10x Price/Earnings for 2019 and 30% 2019-22E EPS adj. CAGR (estimated compound annual growth rate of adjusted earnings per share).
Yandex.Market, the joint venture of Russian internet major Yandex and country's largest bank Sberbank, seeks to rent over 150,000 square meters in two logistics hubs in the Moscow region, Vedomosti daily reported on May 16 citing unnamed sources close to the deal. As reported by bne IntelliNews, Russian e-commerce operators have been driving warehouse demand, with online businesses accounting for circa 25% of warehouse space leases in 2019. Reportedly the space if Sofyno and Tomilino hubs would be used for Beru marketplace of Yandex.Market, focusing on Russian-made products. At the end of 2018 Yandex.Market also launched a beta-version a cross-border marketplace Bringly. Beru already operates one warehouse in the southern city of Rostov-on-Don. Storage space of 150,000mn sqm in Moscow is comparable to that of main competitors of Yandex.Market. Russia's largest online marketplace Wildberries invested into sorting facility with a total area of 145,000 sqm, while Ozon that has been held back by logistics has a long-term lease on 94,000 sqm facilities with an option to expand to up to 122,000.
Fashion e-commerce retailer Wildberries was Russia’s biggest e- commerce online store in 2018 according to a new ranking by revenues from Data Insight, reports East-West Digital News (EWDN). Data Insight is a specialized research agency and released its ranking of Russian e-commerce sites in 2018 at the end of April. Sites are ranked by sales volume (incl. VAT), number of orders and average order value as estimated by the research agency and, in certain cases, confirmed by the companies. The ranking excludes marketplaces, which explains why Aliexpress, the Alibaba subsidiary that dominates cross-border flows in Russia, is not mentioned. Fashion site Wildberries.ru maintained its leadership (since 2016) with sales revenues nearing $1.8bn in 2018, up 74% from the previous year. The site is also the global leader by traffic – ahead of ASOS, H&M, Zara, Next, Uniqlo and alike, according to SimilarWeb. Forbes Russia recently estimated Wilderries’ value at $1.2bn, making it the fourth most valuable Internet company in Russia after Yandex, Mail.ru Group, and Avito.
126 RUSSIA Country Report June 2019 www.intellinews.com