QIWI: Stacking the odds (upgraded to BUY)
We have increased our price target (PT) for QIWI to USD 15.3 (from USD 11) and upgraded the stock to BUY (from Hold), as we believe that its earnings are likely to trough this year and start rising next year, even in a conservative scenario. We have reviewed QIWI’s performance in 1Q21 and analysed the potential impact of the new betting regulation, and we believe that, following the 44% decline since August 2020, QIWI’s share price discounts the worst-case scenario already. QIWI is trading at 5.4x P/E on our 2022E estimates and offers over a 9% dividend yield (at a 50% payout ratio). Importantly, with a c.RUB 12bn net cash position (25% of QIWI’s market cap), a payment segment margin above 50% and an over 40% net margin, we believe that QIWI’s business model is quite resilient. Moreover, there is additional potential upside from stronger earnings and a possible re-rating, if the company manages to secure an additional role in the betting industry.
WOOD & Company is the leading investment bank in Emerging Europe. Founded in 1991 and head-quartered in Prague, our footprint spans the region and touches investors around the globe.
A pioneer in Emerging Europe, WOOD executed many of the first CEE equity trades and landmark investment banking transactions. Our electronic trading platform was the first in the region, and remains the best. We are continually expanding our relevance and reach in these ever-evolving markets.
Our equity market share reflects our stature: 7% in Warsaw, 20% in Bucharest, 16% in Hungary, 40% in Prague and 5% in Vienna. Our distribution is unparalleled, with the largest salesforce in the region, servicing a uniquely diverse investor base.
We couple local expertise with a truly international perspective. With offices on the ground in the region, and in key financial hubs such as London and Milano, we are never far from our clients and we remain at the forefront of what’s afoot in the CEE emerging and frontier landscape.
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