Page 130 - RusRPTFeb22

trade on 2022F EV/EBITDA of 5.5x and P/E of 7.2x. Management confirmed the 50% payout ratio from IFRS net income, that returns a 5.5% dividend yield in our model.
MDMG launched a new private hospital in St Petersburg, the company said on January 13.
The opening ceremony of MDMG’s St Petersburg multidisciplinary hospital that has been launched as a COVID treatment unit for the pandemic.
The facility covers 9k sqm with 150 beds and 12 emergency rooms, while all wards are equipped with oxygen. The company has provided medical care for COVID-infected patients, including pregnant women, for almost a year at its Moscow Lapino-4 (100 beds) and is now extending its expertise (less than 3% mortality) to other regions. Total capex was RUB 2bn and we see this entrance into St Petersburg (Russia’s second-largest, and competitive, healthcare market) as effective and timely. With a targeted cost of treatment of RUB 60k per day (half of that in Moscow) and 80% utilisation, the hospital could account for 10% of our 2022 revenue forecast and provide a payback period of less than two years. MDMG brings the most aggressive organic growth profile in the Russian private healthcare sphere and dynamic adjustments to the pandemic. We reiterate our 12-month TP of USD 14.50 (34% ETR) and Buy rating.
St Petersburg hospital launched. MDMG targets the private healthcare markets in Russia’s wealthiest regions and the city screened well. At the first stages, the facility causes minimal disruption to the local market as it adds new beds during the waves of COVID and MDMG mostly reallocated Moscow staff while overall creating 200 new jobs. After the pandemic ends, the hospital is to provide obstetrics and gynecology, pediatrics, surgery, X-ray and laboratory diagnosis while requiring almost no incremental capex.
COVID treatment strategy. The company has been treating COVID patients since February 2021 at its greenfield Lapino-4 in Moscow. It has 100 beds and is operating at full capacity. Management considers that it has built up extensive expertise and sees demand in other regions. The next hospital is going to be an extension of the Tyumen facility and be comparable in size to Lapino-4, with total capex of some RUB 1bn. Revenues from COVID-related procedures are a strong top line driver for MDMG and we model 2021F revenues surging 32% YoY to RUB 25bn, and 19% YoY to RUB 30bn in 2022F. We do not see the pandemic easing significantly in the near term.
130 RUSSIA Country Report February 2022 www.intellinews.com