TCS Group - A Nice Entry Level With ROE Heading to 70%; Trading BUY
TCS will publish 3Q18 results on Monday, November 26. We expect a very strong quarter, with the typical 2H earnings pickup starting to come through, as the bank delivers more than 70% ROE, which we think is unrivalled globally for universal banks. That said, the stock is off by 23% since the start of August (versus Sberbank's -12%), and is trading not far off its YTD lows. We think the combination of price weakness and likely excellent numbers should help refocus investors' minds a bit, so we see it as a good trading BUY into the results. The stock trades at P/Es of 7.6 and 6.5 for 2018 and 2019 and a 4.3 2018 P/BV.TCS Group Holding is a retail banking services group based in the Russian Federation. Co. is principally engaged in providing retail banking services in the Russian Federation through its subsidiaries, primarily Tinkoff Credit Systems. Co., through this subsidiary, fully licensed by the Central Bank of Russia and a member of the Deposit Insurance System, specializes in credit cards. Co. provides online retail financial services through a branchless operating platform. Co. also offers remote access to its financial products and services through its online banking as well as through mobile banking and high-volume call centers.
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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