Page 118 - RusRPTFeb22

the future monetisation of a given technology; ii) to expand the addressable market significantly, not least through international expansion. The latest news on Yandex starting to offer its routing platform in the Middle East clearly indicates that this technology could well join other technologies, such as ClickHouse or autonomous driving, in the long-term value creation. Our 12-month Target Price for Yandex of $100 implies an ETR of 106%; Buy reiterated.
According to TASS, RouteQ (formerly Yandex.Routing), a subsidiary of Yandex, has started operations in the UAE. In late December 2021, the media also reported that Yandex had launched such services in Turkey and was testing them in the US.
RouteQ offers automated route planning and a fleet track & trace platform through cloud-based delivery management software solutions for ecommerce, retail, delivery and FMCG businesses. Yandex uses the technology for its own offerings, such as Yandex.Market, Yandex.Lavka and Yandex.Eats. It also provides services to third parties, including X5 Group, Coca-Cola HBC, Carlsberg (Baltika) and Russian Post.
According to RouteQ, the service allows a significant reduction of costs on couriers (up to 20%) and call centres (up to 40% fewer requests), boosts vehicle utilisation (up to 20%) and reduces miles driven (up to 15%).
Even though we believe that the current contribution of the technology to Yandex's financials is insignificant, we think that Yandex has a strong potential to scale this business, including internationally, on the back of strong demand from ecommerce and delivery services. We also see the technology as a strong competitive advantage for Yandex itself.
● VK
AliExpress Russia (AER), an e-commerce JV developed by VK, Alibaba, USM International and RDIF, disclosed its CY21 operational and financial results yesterday, 3 February. AER operates a cross-border marketplace, and the JV is also developing a local marketplace. VK holds a 15% economic stake in AER, which accounts for c. 5% of our SOTP valuation for VK.
AER’s total GMV (excluding services) increased 36% YoY to RUB 306bn.The total number of orders reached 309mn, with the average order value up 20% YoY thanks to the expansion of its local business. The total number of standard product units (SPUs) was up c. 52% YoY to 211mn, which is the widest product range among marketplaces in Russia.
118 RUSSIA Country Report February 2022 www.intellinews.com