Sistema confirmed at BUY, TP USD 6.50 - Strong recovery potential linked to capital market conditions
We raise the TP for Sistema from USD 4.7 to USD 6.5 and confirm our BUY recommendation. We believe that Sistemas exposure to the current global economic crisis is limited with most of the costs denominated in RUB, debt at manageable level and a low share of businesses which we consider vulnerable in its portfolio. Sistemas share price doubled from the FY 18 level by January 2020 but fell by about 40% off its peak since then, however we think that it may rebound faster than the rest of the market should the situation normalise.Sistema is a telecommunications and technology investment group based in Russia. Co. invests in, and manages a range of companies which operate in the telecommunications, oil and energy, high technology, banking and other sectors. The main focus of Co.'s activities is service-based industries. Co.'s operations are organized along four segments: Telecommunications, Technology and Industry, Consumer Assets and Oil and Energy. Through its subsidiaries, Co.'s activities include: wireless telecommunications services , IT and systems integration, cable TV, manufacturing of radiotechnical equipment, oil, gas and energy production, banking activities, trading and investing and financing activities.
The Institutional Equity Research team of Raiffeisen Bank International AG covers 85 stocks from Austria, Central & Eastern Europe with sell-side research and thus levers our local broker status with excellent company relationships. For corporates in Austria, CEE and Western Europe, we offer co-sponsored research, which includes research coverage and marketing activities to investors. Additionally, through our Spotlight Research product we also shed light on leading European small and micro-caps, seeking greater visibility with investors.
The Institutional Equity Research team consists of roughly 15 analysts, both in Vienna and the CEE countries. Our analysts provide long-standing sector expertise in tandem with profound local market know how and a sectoral approach across the entire region.
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