Page 129 - RusRPTFeb22

coking coal prices to impact 4Q21 results, 2 February). The exception was DPS, which came in 20% above our estimates, as NLMK’s BoD recommended paying out 113% of FCF in dividends vs. our expectation of a conversion rate of 100% of FCF to dividends.
9.2.13 Other sector corporate news
MD Medical Group has released strong 4Q21 operating results, with revenue growth reaching 9% YoY despite the challenging comparison base (up 49% YoY in 4Q20).
The key drivers for the expansion were the rapid treatment of COVID patients and the ramp-up of recently launched hospitals, especially the Lapino oncology facility, Samara and Tyumen (40-60% utilisation). We note the further roll-out of COVID hospitals in 2022 (St Petersburg and Tuymen) and forecast MDMG’s revenues to rise 19% YoY in 2022F (the most aggressive profile in our Russian private healthcare coverage). We reiterate our 12-month Target Price of USD 14.50 (an ETR of 54%) and Buy recommendation.
● Total revenues increased 9% YoY to RUB 7bn in 4Q21 and 32% YoY to RUB 25bn in 2021, a record result for the company (and fully in line with our model).
● Moscow hospitals demonstrated the fastest revenue growth last year (up 44% YoY in 2021 and up 8% YoY in 4Q21), lifted by the Lapino COVID facility and oncology hospitals ramping up (40% utilisation in the first year).
● The volume trend in deliveries and IVF slowed in 4Q21. The number of deliveries added 5% YoY, after the 9% YoY advance in 9mo21. IVF cycles lost 17% YoY vs. the 21% YoY gain in 9mo21, being particularly sensitive to pandemic-related conditions.
● The pricing environment was decent, with deliveries growing 16% YoY in Moscow hospitals (RUB 503,000) and 8% YoY across the regions (RUB 169,000). IVF gained 9% YoY, reaching RUB 256,000 per cycle.
● Cash flow was robust and net debt declined RUB 1bn last year to RUB 2bn as of YE21, with leverage of 0.2x net debt/EBITDA as per our model.
● Capex was flat YoY at RUB 3.8bn in 2021. Hospital construction accounted for 85%, with the prime allocation being for COVID facilities. Among the most recent launches, we note the Tyumen expansion (to be launched this week) and 2023-24 seeing two new hospitals at Lapino (nuclear medicine and psychoneurology), for RUB 6bn investment, and the multidisciplinary Domodedovo hospital for RUB 4bn.
● MDMG’s GDRs have lost 20% in the last three months and now
129 RUSSIA Country Report February 2022 www.intellinews.com