Page 160 - RusRPTOct20

debt/EBITDA. MDMG announced the completion of Lapino-2, which represents the expansion of its flagship facility, mostly into oncology services. We see the investment as wrapping up the near-term growth capex and allowing the company improve its dividend story. FY19 dividends stand at RUB1.4bn and bring a 4% yield with a record day on 16 September, while the 1H20 BoD recommendation is for RUB736mn, with a 3% yield and record day on 18 September. Both imply 50% payouts, which are fully sustainable in our model, while our 2020-24F FCF yields average 11%. The reported figures raise upside risks to our model, which factors in a moderate decline in the FY20 financials, and we await greater detail on the 2H20 operational conditions and pandemic situation. We maintain our 12-month Target Price of $6.50. Buy reiterated
The Russian ​MD Medical Group​ private healthcare operator has launched a flagship Lapino-2 hospital ​with 18,500 square metres of extra space (up by 28%) and boosting the inpatient and outpatient capacities increase 20% and 10% year on year respectively. The management anticipates the new hospital’s turnover at RUB3bn ($39.2bn) (18% of our 2020 forecasted top line) and the core specialty is going to be oncology, with a sizable participation of mandatory health insurance (40% versus 60% commercial), VTB Capital (VTBC) commented on September 21.
160 ​RUSSIA Country Report​ October 2020 ​ ​www.intellinews.com