Detsky Mir - Delivering in a Challenging Market
Detsky Mir's 2017 IFRS results came in better than we expected. Despite demographic pressure, the company's LFL sales turned out to be the highest in our coverage and its profitability hit an all-time high (compared with a decline in food retail). Meanwhile, the company remains focused on expanding while maintaining a double-digit EBITDA margin. We trim our financial projections by 2-3% on average for the medium term, but increase our target price to R125 per share, as we moved our model horizon one year forward. We reiterate our BUY recommendation. We think the stock, which is trading at a 2018E EV/EBITDA of 6.2, offers 17% top-line growth, 40% ROIC and a 9% FCF yield in 2018. Moreover, profitability is subject to upside risks, as LFL sales per store outpace opex inflation.Detskiy Mir PAO is a Russia-based company, which is primarily engaged in the children products retail sector. The Company offers a wide range of products, such as toys, clothing and footwear, baby goods, stationery, school and learning related products, creative kits, sport related products, food, car seats, furniture, among others. The Company's structure includes the chain of stores Detskiy Mir and the retail network ELC (Early Learning Center). The Company's Detskiy Mir chain comprises over 480 stores located on the territory of the Russian Federation and Kazakhstan, as well as more than 40 ECL stores. Detskiy Mir PAO is primarily active domestically and in the Commonwealth of Independent States (CIS) countries. In addition, the Company sells products online via its Website. The Company's major shareholder is AFK Sistema PAO.
Sberbank CIB Investment Research is a research firm offering equity, fixed income, economics, and strategy research. It covers analysis on all aspects of Russia’s capital markets, issues and industries. The firm analyzes trends in Russia and combines local knowledge with a global perspective. It processes macroeconomic data, market and company-specific news, stock quotes and other information for providing research reports. The firm provides details and latest prices on the most traded names and most traded paper on all segments Russian market. In strategy research, it provides thematic research, tips and descriptions of the methodology used to evaluate companies.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.