Magnit - Numbers, Strategy Presented at CMD Backed Up by Our Data
We used our proprietary Ivanovs survey data to cross-check the data presented and remarks made during Magnit's capital markets day (CMD) on July 26 and 27. Our findings confirm the soundness of the company's strategy. We see that the company's stores are popular among less-affluent customers (two thirds of Russians) but lose out to the competition in high-income areas. The retailer will need to improve its product quality and assortment to become more competitive in Moscow, where the share of people with low incomes is noticeably lower. These issues have been well addressed in Magnit's renovated stores, which are rated higher than Pyaterochka stores by the Ivanovs and are encouraging higher spending. We reaffirm our positive stance as outlined in our recent report, "Magnit: Diminishing Headwinds in 2H17," published on June 20.
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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