Enel Russia - HOLD Amid Uncertainty Over Reftinskaya Proceeds, Dividends
We are downgrading Enel Russia to HOLD. Although the company has finally concluded an agreement to sell Reftinskaya TPP and the Russian antitrust regulator approved the deal yesterday, the management has still to provide clear guidance on what the proceeds will be used for and on the regular dividend to be paid based on the 2019 results. A new dividend policy is to be presented in November-January, but until then we believe that positive drivers are limited and uncertainty will predominate. Our new 12-month cum-dividend target price is R1.16 per share (including the R0.157 dividend we expect to be paid next year), implying a 12-month total return of 18% and warranting a HOLD recommendation.PJSC Enel Russia is a wholesale generation company in Russia. Co.'s main areas of operation are production of power and heat, supply (sale) of power and heat, receipt (purchase) of power and heat from the wholesale power (capacity) market. Co. is active in four production branches around Russia: in the Ural region - Reftinskaya GRES, Sredneuralskaya GRES, in the northern Caucasus - Nevinnomysskaya GRES, and in Central Russia - Konakovskaya GRES. Co.'s aggregate installed capacity is 9,677 MW for power and 2,382 GCal/h for heat. Co. provides power and heat to both industrial enterprises and household consumers via local power distribution networks.
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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