WOOD Flash – Yandex: 3Q20 – stronger profitability, with little compromise on growth
Yandex’s 3Q20 results demonstrated an expected recovery across key segments, while the stronger profitability in search & portal, as well as the new segments (e.g., foodtech, car sharing), was a major positive surprise for us. We were concerned initially by the slower-than-expected recovery in advertising revenue (up just 1%, excluding Yandex.Markets); however, during the call, management provided convincing arguments in favour of its focus on the quality and profitability of its advertising platform, which alleviated our concerns partially. During the call, we were also encouraged by the progress in e-commerce and the loyalty programme; overall, we believe that Yandex should be able to generate substantial shareholder value through network effects and synergies between different fast-growing services that are already visible. Hence, we maintain our BUY recommendation and USD 70 PT.Yandex is an internet and technology company that operates an internet search engine in Russia. Co. builds intelligent products and services powered by machine learning. Co.'s products and services are based on complex, unique technologies that are not easily replicated. Co. generates substantially all of its revenues from online advertising. Co. also generates revenues from its e-commerce offerings, classifieds and e-hailing service. Co.'s businesses are organized in the following operating segments: Search and Portal; E-commerce; Taxi; Classifieds and Experimental businesses.
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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