TCS Group Holding confirmed at SELL, TP USD 72.8 - 2021e growth pace is challenging to match
We confirm our SELL recommendation for TCS Group, but increase our TP to USD 72.8 (RUB 5,294) from USD 37.1 beforeWe expect EPS growth to moderate from 38% in 2021e due to increasingly crowded competition, tighter macroprudential regulation, base effect and moderate real GDP growth in Russia
We expect the business to further diversify from credit card loans as secured loans should grow their share in the loan book structure, and EPS growth of mostly F&C business lines (namely InvestTech, Acquiring and payments, SME services) should outpace that of lending and other businesses
TCS Group Holding is a retail banking services group based in the Russian Federation. Co. is principally engaged in providing retail banking services in the Russian Federation through its subsidiaries, primarily Tinkoff Credit Systems. Co., through this subsidiary, fully licensed by the Central Bank of Russia and a member of the Deposit Insurance System, specializes in credit cards. Co. provides online retail financial services through a branchless operating platform. Co. also offers remote access to its financial products and services through its online banking as well as through mobile banking and high-volume call centers.
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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