QIWI - Betting on a Good Niche
Around 10% of respondents to our Ivanov surveys make bets, with more than half doing so weekly, which could suggest that the number of bettors is at least sustainable. The vast majority of betting Ivanovs say they do it online (81%), though for the online segment there is still room for growth, given that 69% of those who bet solely in betting shops say they plan to start betting online as well. Of those who make bets, 58% do it through bookmakers, for which QIWI provides payment processing services, while 41% of them also use unlicensed bookmakers. We expect betting to account for 41% of QIWI's payment services net revenues in 2019 and see them growing at a CAGR of 34% in 2018-22, as we outlined in a recent report. We think that QIWI will benefit from a further disruption of offline by online betting, as well as a migration of wagers from the illegal to the legal realm, triggered by tightening regulation. We reiterate our BUY rating on QIWI and a $35.64 per share target price.
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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