Студопедия — Table 9. Multiples by segments
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Разделы: Автомобили Астрономия Биология География Дом и сад Другие языки Другое Информатика История Культура Литература Логика Математика Медицина Металлургия Механика Образование Охрана труда Педагогика Политика Право Психология Религия Риторика Социология Спорт Строительство Технология Туризм Физика Философия Финансы Химия Черчение Экология Экономика Электроника

Table 9. Multiples by segments






We initiate coverage of Mostotrest (MSTT), leading infrastructure construction company in Russia, with a BUY rating and target price of RUB264 which implies an upside potential of 45% by the end of 2013.

§ MSTT is a leading Russian infrastructure construction company with diversified business model and extensive geographic coverage. Mostotrest has its footprint in most of the market segments inc. construction and renovation of bridges (key segment with a 25% market share), roads, railways, airports and other transport infrastructure facilities. It has both the track record of an experienced general contractor and unique in-house expertise which allows it to undertake the most complex projects. The company’s own production capacities account for one third of materials used in construction and ensure uninterrupted supply. In addition, it operates toll roads and has recently entered the concessions segment in a strategic move to stabilize its earnings.

§ Attractive industry fundamentals and favorable market trends. From 1995 to 2011 the number of passenger cars in Russia increased 142% while the roads merely added 7%. Not only is the infrastructure insufficient but, it is also extremely depreciated which impedes the country’s economic development. To address this problem a number of federal programs were launched under which RUB13,500bn will be invested in infrastructure by 2017 pushing the market to grow at 12.6% CAGR from 2012 to 2017. While the market trends favor large players which is seen through increasing complexity of projects as the average tender size grew from RUB0.9mn in 2007 to RUB3.2mn in 2011, Mostotrest seems to be well positioned to benefit from this abundant investment in infrastructure and we forecast its top line to demonstrate a tremendous growth of 15.1% CAGR during 2012-17.

§ Successful replenishment of the order book with high profile projects. Thanks to its proven track record, in-depth expertise and political resources, MSTT is able to win the most attractive tenders among which are the construction of Moscow Fourth Ring Road worth RUB60bn; Kurortny Avenue Relief Road in Sochi with RUB50.3bn project value; Moscow-Saint Petersburg Highway (two sections with length of 43 and 76 km) priced at RUB83.1bn and many others.

§ MSTT is a value stock with appealing dividend story. The company is committed to paying out 54% of net income which translates into sound divided yield of 3.8% against 2% for the industry. This seems to be particularly attractive under the current uncertainty in financial markets and limited capital gain opportunities as investors are searching for more stable dividend returns.

§ MSTT is undervalued by the market. Trading at 2013E EV/EBITDA of 4.3 and P/E of 10.5 MSTT provides 23% and 18% discounts to its international peers, while the low one-year forward PEG ratio of only 0.7 further indicates that the stock is a cheap buy taking into account its fundamentals.

§ The upside to our target price can be mainly seen in reduced proportion of works outsourced, lower capital expenditures and higher market growth rates.

§ Major risks: Lower revenues as result of reduced investment in infrastructure due to worsening economic situation; failure to win new tenders; rising construction costs, delays in site preparation works.

Highlights (RUB mn) 2010A 2011A 2012E 2013E 2014E 2015E 2016E 2017E
Revenue 60,279 98,996 118,275 140,226 158,452 181,651 207,063 238,807
EBITDA 6,488 9,609 11,001 12,608 13,708 15,049 16,343 17,860
Net Income 1,730 3,705 4,327 5,007 5,629 6,336 7,019 7,776
Profitability & Valuation              
EBITDA margin 10.8% 9.7% 9.3% 9.0% 8.7% 8.3% 7.9% 7.5%
Net margin 2.9% 3.7% 3.7% 3.6% 3.6% 3.5% 3.4% 3.3%
ROE 10.6% 19.8% 20.8% 21.6% 21.7% 21.8% 21.6% 21.5%
ROA 2.4% 3.8% 3.9% 3.9% 3.9% 3.8% 3.7% 3.6%
Profit allocation                
EPS (RUB) 6.97 13.24 15.47 17.90 20.12 22.65 25.09 27.80
DPS (RUB) 3.40 7.14 7.94 9.19 10.33 11.63 12.88 14.27
                   

 

Figure 8. Mostotrest’s customers, June 2012 Source: Company data
Figure 11. Transport infrastructure spending breakdown, 2011 Source: EMBS Group report
Figure 7. Own production of materials, 2011 (RUB bn)   Source: Company data
Figure 9. Inland infrastructure investment as % of GDP, 2010
Figure 10. Transport infrastructure construction market vs GDP y/y growth rates Source: Rosstat
Table 2. Russia is №56 by availability and quality of transport infrastructure, 2011
Country
France  
Germany  
USA  
Canada  
China  
Russia  
South Africa  
India  
Brazil  
  Source: The Global Enabling Trade Report
   

 

Table 1. Mostotrest’s own production capacities
Type of material/structure Annual Capacity
Cement/sand mix, t 900,000
Concrete, m3 500,000
Concrete structures, t 50,000
Steel structures, t 35,000

 

Source: Company data

Figure 12. Main players on the infrustructure market Source: A-Team analysis
Table 3. Quality of Russian infrastructure
  Grade Rank
Quality of air transport infrastructure 3.8 / 7 97/132
Quality of port infrastructure 3.7 / 7 89/132
Quality of railroad infrastructure 4.2 / 7 30/132
Quality of roads 2.4 / 7 121/132
     

Source: The Global Enabling Trade Report

Figure 3. Backlog by market segments, June 2012 Source: Company data
Figure 6. Backlog by regions of operation, June 2012 Source: Company data
Figure 4. Revenue by companies, 2011 Source: Company data
Figure 5. Backlog by companies, June 2012 Source: Company data
Figure 2. Revenue by market segments, 2011 Source: Company data

 

 

 


 

Table 5. DCF-valuation summary
Total discounted free cash flow, RUB mn 22,511
Discounted terminal value, RUB mn 50,015
Enterprise value, RUB mn 72,526
Net Debt (Cash), RUB mn (21,622)
Minority interest, RUB mn 14,970
Equity value, RUB mn 79,177
Shares outstanding, mn  
Target price per share, RUB  

Source: A - Team analysis

 

Figure 15. CAGR of Group’s revenue by segments,% Source: Google Finance
Figure 16. Mostotrest’s total revenue, RUB bn Source: A-Team analysis
Table 4. Target price estimation
Estimation method Value
DCF-based share price, RUB  
Multiple-based price, RUB  
Share target price, RUB  

 

 

Figure 14. Monte Carlo simulation   Sell 9% Hold 20% Buy 71% Source: A-team analysis
Source: A-Team analysis
Figure 20. CAPEX forecast, RUB mn Source: A-team analysis
Figure 21. Mostotrest’s dividends paid forecast, RUB mn Source: A-team analysis
Figure 19. Mostotrest’s return on equity forecasts
Figure 22. Shareholders structure Figure 23. Marc O’Polo structure Source: Company data
Source: A-Team analysis
 

Table 9. Multiples by segments

EV/ EBITDA P/E
  4.2 11.1
  6.4 14.5
  5.6 10.7
Weighted average 5.4 12.8

Source: Consensus estimates; A-Team analysis

Figure 17. Valuation field Source: A-team analysis
Target price
Figure 18. Mostotrest’s profitability forecasts  
Source: A-Team analysis






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