LSR Group - Uncertainties Already in the Price
Following a change of analyst coverage, we update our outlook for Russia's residential real estate market and our view on LSR Group in particular. We think that most of the headwinds currently facing the industry - legislative changes, including a new escrow account financing mechanism, and slower mortgage growth - are already priced in, given the stock's weak showing over the past year or so. In addition, we believe large homebuilders such as LSR Group will be relative beneficiaries from the legislative changes. We rate LSR Group a BUY at a $2.50 per GDR target price.Group LSR PJSC is involved real estate development in Saint Petersburg, Munich, Yekaterinburg and Moscow, prefabricated panel construction in Saint Petersburg, Moscow and Yekaterinburg, commercial real estate development in Saint Petersburg and Moscow and Yekaterinburg, the production of building materials at plants located in Russia and Ukraine, the extraction and processing of aggregates in Leningrad region, and the provision of construction services. These products and services are sold mainly in Russia. As of Dec 31 2015, Co. had five reportable segments: LSR.Building Materials; LSR. Construction; LSR.Project management; LSR.Cranes; and LSR.Real Estate.
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.
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