QIWI - Making the Right Bets
QIWI, which operates one of the two legal processors of online betting payments in Russia, should benefit from legalization of the market and the structural change from offline to online. The company generated R5.8 bln in betting-related net revenues in 2018, we estimate. That was 35% of QIWI's total payment services net revenues. The share of betting-related services in QIWI's payment net revenues will grow to 53% by 2022E (including around 49% for payment processing) to reach R18.8 bln, with a CAGR of 34.2% on our estimates. We reiterate our BUY recommendation for QIWI and raise our target price by 43% to $35.64 per ADR. We estimate that QIWI is trading at an attractive 2020E P/E of 7.1, which is even lower (6.1) if we strip out non-core business losses. This means that QIWI is trading way below the P/Es of global payment and betting industry peers. We estimate QIWI's dividend yield at around 5% in 2019E and around 10% in 2020E.Mail.Ru Group is an Internet company based in the Russian Federation. Co. operates the email service [email protected] and two IM networks in Russia - Mail.Ru Agent and ICQ. Co. operates two Russian-language online social networking sites: Moi [email protected] and Odnoklassniki.ru, and owns a strategic minority equity stake in the social network Vkontakte. Co. is also engaged in developing projects in E-commerce and operating more than 40 thematic vertical sites, targeting various user categories. Co. is also Russia's predominant online games company. Co. maintains a portfolio of online games which includes 34 MMO games and over 30 games for social networking sites.
Yandex is an internet and technology company that operates an internet search engine in Russia. Co. builds intelligent products and services powered by machine learning. Co.'s products and services are based on complex, unique technologies that are not easily replicated. Co. generates substantially all of its revenues from online advertising. Co. also generates revenues from its e-commerce offerings, classifieds and e-hailing service. Co.'s businesses are organized in the following operating segments: Search and Portal; E-commerce; Taxi; Classifieds and Experimental businesses.
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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