PIK Group - Leading in a New Paradigm
PIK Group has been the biggest winner from falling rates in the economy-class housing segment. Now, after acquiring fellow developer Morton Group, it has become the market leader. But to stay on top, it must navigate an oversupplied market that is keeping competition elevated and prices and margins under pressure. We think the recent improvements to its product and construction processes will allow it to not just maintain but actually expand its market share, up to nearly 2 mln m2 of annual sales. Meanwhile, the Morton acquisition came at an attractive price and, although it temporarily extended the balance sheet, the expected operational synergies create value. In light of the acquisition and recent delisting of the GDRs, we introduce a new model and new target price of R365 per share and BUY recommendation for PIK Group. We take a longer-term view on the company, particularly given the attractive dividend story after the planned deleveraging in 2018-19 and in light of the likely improved liquidity.
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.