Page 168 - RusRPTNov21

be on the alert in case the LNG-era comes to an end faster than expected. The current IMO target is for the industry to be carbon-neutral by 2100. However, some countries have set their target at 2050-60.
Recent market transactions. Over the last few months, there have been three major buyout transactions in LNG carriers (Teekay, Hoegh LNG and GasLog), valued at 8.4x 2022F EV/EBITDA. On our numbers, Sovcomflot’s industrial segment is valued by the market at 6.7x, with a 20% discount. As a whole, it also trades at 6.7x.
Global Ports 3Q21 volumes; a tool to participate in transit growth. Excerpts from the report are given below:
· In light of the 4x y/y surge of container shipping rates, Russia, which offers regular railway container transit with stable pricing, continues enjoying volume growth.
· In 3Q21, its total throughput was up 9% y/y, mainly due to the 13% increase at Russian Far Eastern ports, which are the entry point to railway routes.
· Global Ports’ volumes have climbed 8% y/y, and the company has continued to expand its market share. See Figure below for details.
· We view Global Ports as the primary tool to have an exposure to aforementioned industry's growth, as third of its volumes comes from the Russian Far East. The other public company, FESCO, lacks market liquidity, in our view.
· We expect Global Ports’ volume growth to accelerate in 4Q21 due to the increased throughput at the Far Eastern VSC port, where coal handling was ceased in September in favour of containers.
· As a side note, we draw investor attention to the strong performance of the company’s GDRs. MTD, they have added 15%, and YTD 37%, and are now consolidating around the $4.1 level, the highest since 2017.
· However, we think that full potential has not been exhausted yet: First, the multiple is still undemanding: 2022F EV/EBITDA is 5.2x, vs. its own 5y average of 6.6x, and the 8.1x average of its peers.
· Second, we believe that there are still two triggers ahead: the announcement of dividends for 1H22 (we expect an annualised
168 RUSSIA Country Report November 2021 www.intellinews.com