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2% of the total, as of 9mo21. The marketplace is to reach 10% of revenues by 2024, while the overall medium-target for online sales is 45% of the total (we forecast it increasing with a CAGR of 25% in 2021-25F). In our view, a proactive approach and efficient execution from Detsky Mir are vital in order to adapt to the rapidly changing competition and secure its current market positions.
X5 Retail Group net sales grew 11.6% y/y in 3Q21, matching our estimate and moderately picking up from the 10.6% y/y in 2Q21. Turnover showed uniform trends during the quarter: 11% y/y in July-August and 12% y/y in September. Our estimate for 2021F of 10% y/y remains intact, as 9mo21 came exactly at this level. Various channels showed strong trends, as offline outlets printed 4.8% LFL y/y (+80bp q/q) and online was up 2.6x y/y to RUB10.7bn and 2% of the total (3.6% in Moscow). The next trigger is the CMD on 27 October. We anticipate it providing additional colour on medium-term growth, the hard discounter format, and the development of the online format, overall returning the story to investors’ radar screens. X5’s GDRs have been flat in the last three months, underperforming Magnit by 20%. The stock demands 2021F EV/EBITDA of 5.8x vs. 6.8x for Magnit, while both offer comparable 8% 12-month dividend yields, on our numbers.3Q21; speeding up. Net turnover added 11.6% y/y to RUB542bn in 3Q21, accelerating from the 10.6% y/y in 2Q21. Last year saw a high comparison base (15.4% y/y in 3Q20), boosted by lower outbound tourism. The monthly figures in 3Q21 showed smooth trends, with 11% y/y growth in July-August and 12% y/y in September. For 9mo21, X5’s sales grew 10% y/y to RUB1.6tn, matching our annual forecast of 10% y/y (which still faces the pandemic and potential limitations). In terms of the formats, convenience grew 10.2% y/y and supermarkets added 10.8% y/y on the traffic recovery in malls and space growth, while big boxes lost 42% y/y on the ongoing transformation programme.
M.video has released its third quarter of 2021 operating results, showing sales flat y/y against the high comparison base.
3Q20 was the strongest quarter last year (up 25% y/y) as COVID-related restrictions were lifted, so offline operations resumed and people returned to shopping malls. For 9mo21, the top line was up 15% y/y, matching our full=-year forecast, while the company said that the pace had been above 10% y/y in September-October. M.video’s shares have lost 10% YTD.
We do not see any operating reasons for such a poor performance and note that the 2022F EV/EBITDA of 4x and 12-month dividend yield of 14% are among the most appealing in the sector.
M.video reported a 2% y/y advance to RUB 135bn GMV (revenues not disclosed; mostly differ on VAT). The pace decelerated from the 25% y/y in 1H21 due to the spike in the comparison base, as 3Q20 was the strongest last year (up 25% y/y). The summer months saw restrictions
150 RUSSIA Country Report November 2021 www.intellinews.com