Page 130 - RusRPTFeb19

compared with the 5% y/y decline in total births in Russia in 11mo18, VTB Capital (VTBC) said in a note. “The IVF segment was flat y/y as in Moscow it is difficult to bring back patients who have switched to a competitor. The annual figures matched our model and we note further room for utilisation to increase in the short term (the levels across hospitals are currently 20-80%). Our 12- month Target Price of $10 implies a 121% ETR; Buy reiterated,” VTBC added. The private health care business has grown with the rise of the middle class and child care is the first thing Russian families spend their extra money on. MDMG reported that operational results stabilised. In 4Q18, the company had 1,838 deliveries, with growth accelerating to 10% y/y from 7% y/y in the previous quarter. The pick-up was driven by recently launched regional hospitals: Ufa and Novosibirsk reached utilisation of 50% and 75%, respectively, while Samara passed the 20% threshold, according to VTBC. The IFV segment stabilised after the 3% y/y correction in 1H18, but Moscow facilities continue to suffer as it is a difficult task getting patients to return once they have been lost to competitors. The numbers of in-patient and out-patient treatments were up 22% y/y and 6% y/y on the back of new clinics being launched and new services introduced, while like-for-like (LFL) results were flat y/y. “The figures were in line with our forecasts. We anticipate the Samara and Ufa hospitals ramping up further in the next two years. It is also worth highlighting the upcoming launch of the Tyumen hospital, and the construction of the Lapino-2 and StPetersburg facilities. Thus, the company remains on an aggressive growth path and continues to represent a prime sector consolidator in the private healthcare segment in Russia. The stock is trading at 2019F EV/EBITDA of 6.8x, i.e. 2.2x lower,” VTBC said.
130 RUSSIA Country Report February 2019 www.intellinews.com