Page 119 - RusRPTMay19

that the Babayev family will retain control over the company. At the end of 2017 Cherkizovo was valued at circa $2bn with 82.1% of the company’s stock controlled by the family of its founder Igor Babayev, after it bought a 21.05% stake for RUB12bn ($200mn) from the second-largest shareholder, leading Russian fund Prosperity Capital Management. In August 2018 the owners of Cherkizovo moved the Cyprus-registered assets from their offshore domicile to Russia.
In 1Q19, Rusagro’s revenues surged 2x y/y to RUB32.5bn, seeing destocking in the farming division, consolidated volumes in oil & fats after the SolPro deal, and a robust pricing environment. In the previous quarter, the company slowed sales in the sugar and grain businesses in order to enjoy higher prices through the farming year, and saw a 30-100% y/y advance on improved supply-demand balances. In the pork division, hog prices fell 11% y/y due to a lower quality of produce sold externally, while prices for carcasses and cuts went up 20% y/y and 9% y/y and almost all breeding volumes were further processed. VTBC updated its model for the SolPro acquisition, volume redistribution, and spiked leverage. In 2019, VTBC factored a 45% y/y advance in EBITDA, net debt declining to RUB45bn and 1.9x net debt/EBITDA, and the stock trading at 6.1x 2019F EV/EBITDA. VTBC’s unchanged 12-month Target Price of $14.50 implies a 34% ETR: Buy reiterated.
9.2.7 TMT corporate news
Russian internet major Yandex has the right to sell its stake in Uber Technologies that are worth $96mn, Prime reported on April 12 citing documents published by Uber. Taxi service of Yandex - Yandex.Taxi - and Uber have combined the businesses in Russia, Kazakhstan, Belarus, Azerbaijan, Armenia and Georgia, investing in the capital of the new company $225mn and $100mn respectively. The deal was closed in February last year and 59.3% of the joint venture belongs to Yandex, 36.9% belong to Uber, and another 3.8% belong to employees. According to the report, during the creation of the JV, Uber issued 2mn ordinary class A shares in favour of Yandex worth $52mn. Should Yandex claim a mandatory buyout offer for the shares, it would now be worth $96mn. Recently Uber Technologies has renewed talks of holding an IPO in 2019. Last year BCS Global Markets commented that the IPO and record-high valuation of Uber is a "positive signal for Yandex.Taxi", noting that the price of Uber's IPO could serve as a future benchmark for Yandex.Taxi valuation whenever it decides to go public.
Russia’s internet major Yandex is planning to issue cashback credit card co-branded with Alfa Bank and Tinkoff Bank, Kommersant daily reported citing unnamed sources close to the company. Reportedly, Yandex plans to launch across-the-board loyalty programme Yandex.Plus proposing cashbacks to users of its services in partnership with Alfa Bank, Tinkoff Bank, Master Card, and possibly other banks in the future. The banks would benefit from Yandex customer base. The monthly cashbacks would range from 1-10% on money spent on Yandex services, including anchor services such as Yandex.Taxi, Yandex.Food, Yandex.Beru marketplace, and others. Analysts and market participants surveyed by Kommersant confirmed that cashback was an effective strategy to build loyalty. On the other hand, Russian consumers are used to cashbacks and Yandex.Plus proposal so far does not seem to suggest anything extraordinary and is seen as unlikely to seriously boost audience conversion. “We believe that the company will try to use the cross-selling opportunities of its service and increase the frequency with which
119 RUSSIA Country Report May 2019 www.intellinews.com