QIWI - Closing Trade Idea
On October 31, we opened a short-term trade idea to buy QIWI based on an attractive valuation following a selloff and our long-term conviction about the stock's value. The trade has made a 10.6% absolute return and a 5.9% return relative to the RTS in dollar terms since it was opened. We are now closing it, as we think the short-term share overhang risk has increased after QIWI filed a form F-3 with the SEC, which might ultimately mean placement of 37.4% of equity (including 34.4% from Otkritie FC Bank and 3.0% from Sergei Solonin, the core shareholder and CEO) within three years on top of the current 41.3% free float. We have consistently highlighted this risk, including in our last update on the company from August 26. We think the placement would ultimately benefit minorities by increasing the stock's liquidity in the long term. We reiterate our long-term BUY recommendation and target price of $35.64 per share.
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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