Our investment idea for Sistema's shares has returned nearly 15% since its opening on 13 September 2019 and topped our year-end $5.8/GDR projection. We’ve upgraded our Sistema valuation due to recent changes. Our new estimated price for Sistema is $5.8/GDR with an investment horizon till the end of 2020.
The main triggers of the group's stock growth remain the same:
We raised the group's market and non-market assets’ valuation (by a total of 11%, or $783 mln based on the group's proportionate shares in its assets) from the previous assessment. In particular, Ozon's valuation was up 12% to $925 mln excluding debt. We also downgraded the estimate for corporate centre's debt from $3.4 bln to $3.3 bln in line with our understanding of gradual debt reduction by the group, to $2.2–2.4 targeted by the management in mid-term. Our new estimated Sistema price is $5.8 per GDR with an investment horizon till the end of 2020.
Source: Company data, ITI estimates