WOOD Flash – TCS Group Holding: holds analyst meeting on its AGM proposals
Yesterday afternoon (27 October), TCS’ management met with analysts to discuss two of the proposals for the AGM. These will include: a) issuing up to 5% of issued capital for the next three years for business growth (Russian and abroad); and b) issuing up to 1.5% share capital per year for long-term incentive programmes, as TCS strives to retain and hire talent. We did not expect this, but growth may need capital. We understand that TCS is looking at another south Asian market, in addition to the Philippines, and also growing fast in Russia. Acquisitions are probably not off the table. We also appreciate management’s incentive to use the stock as a currency. Our more general view is that the market may be pricing in TCS’ prospects aggressively, as we elaborated in our recent report. We rate TCS a SELL. The stock is trading at 22x P/E and 6.2x P/TBV for 2022E, on our estimates.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.
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