Gazprombank initiated analytical coverage of SFI shares with a "buy" recommendation

Gazprombank (GPB) has released an analytical report on PJSC SFI, estimating the holding at RUB 105 billion, which corresponds to RUB 950 per share (implying a growth potential of 73% compared to current quotes). The bank's analysts emphasize that investing in SFI is one of the few opportunities to invest in rapidly growing segments of the financial market, such as leasing and insurance. GPB experts estimate that the profits of the two SFI subsidiaries of LC Europlan and VSK will almost double by 2025.

The overall fair value of the assets owned by the holding is estimated by analysts at RUB 126.4 billion. The final evaluation of the holding at RUB 105 billion takes into account SFI's own debt and the applied holding discount.
GPB considers the SFI's financial results for the first half of 2023 to be positive. "The holding company's results reflect the smooth growth of its key assets, specifically Europlan and VSK. Meanwhile, the multiple growth in earnings reflects the recovery in value across financial instruments after significant losses amid the overall market decline in 1H2022," the report said.
According to representatives of Gazprombank, the holding's securities "imply not only a focus on the growth of core assets (Europlan and VSK) but also on significant dividend payments, the size of which is determined by the dividend policy."

As part of the conducted SWOT analysis of the holding, the bank's analysts highlighted the following strengths of the holding: low corporate center costs (which can offset the standard discount for the holding's business model relative to the total value of its assets), synergy between core assets, and its stable financial position. As for the weaknesses, the analysis pointed out the low level of dividend payments in recent years and the relatively low industry diversification of assets on the holding's balance sheet.

For more details on Gazprombank's analysts' approach to the valuation of SFI Holding, please refer to the full text of the report.