Sistema: Systematic approach (BUY – initiation of coverage)
We initiate coverage of Sistema with a BUY recommendation and a RUB 48 price target (PT), which offers 37% upside potential to the current price. Despite posting a strong share price performance of +82% in the last 12 months (LTM), and 22% since the start of 2021, we still see more upside in this story, as the value of its private assets is not priced in fully, in our view. After the successful Ozon public placement, Sistema continues working on the value crystallisation of its assets, with the Segezha IPO planned in 2021E, subject to market conditions. At this price, we believe the market is mostly accounting for the public businesses and Segezha, and getting the private businesses for free.Sistema is a telecommunications and technology investment group based in Russia. Co. invests in, and manages a range of companies which operate in the telecommunications, oil and energy, high technology, banking and other sectors. The main focus of Co.'s activities is service-based industries. Co.'s operations are organized along four segments: Telecommunications, Technology and Industry, Consumer Assets and Oil and Energy. Through its subsidiaries, Co.'s activities include: wireless telecommunications services , IT and systems integration, cable TV, manufacturing of radiotechnical equipment, oil, gas and energy production, banking activities, trading and investing and financing activities.
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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