Polyus - Olympic Gold
With stock markets hitting record highs and bond spreads continuing to be squeezed, we think it could make sense to buy some gold insurance against a black swan event that could spoil the rally. We see Polyus, the company with the highest production growth in the industry, as a good option. The stock is trading at an EV/EBITDA of 7.4 for 2017E and 6.9 for 2018E (at an average gold price of $1,250/oz) and yielding 6-7% per year, which looks like an attractive entry point. We initiate coverage of Polyus with a target price of $42.60 per GDR and a BUY recommendation.PJSC Polyus is an open joint stock company based in Russia. Co. is engaged in operations as a gold production company. Co.'s major assets are: in Krasnoyarsk region, Olympiada deposit as well as Blagodantoe, Titimukhta, Tyrada, Olenii, Razdolinskaya, Zyryanovskaya and Panimba fields; in Irkutsk region, Zapadnoe, Verninskoe, Pervenets, and Chertovo Koryto and Mukodek goldfields as well as some 94 placer deposits; in Magadan region, Natalka deposit and smaller Degdekan and Vostochnoye fields; in the Republic of Sakha (Yakutia), Kuranakh ore body and Kyutchus field as well as 50% interest in the giant Nezhdaninskoye field; and in Amur region, Bamskoe gold field.CJSC Deloitte & Touche CIS
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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