Rus News Journal

Merrill Lynch has prepared networks for investors

Having estimated papers Russian ritejlerov

Yesterday Merrill Lynch has published the analytical report under securities of four Russian public trading networks - 5 Retail Group, the Magnet Diksi and the Seventh continent . On first three companies of analytics predict stock value growth till the end of the year from 10 to 70 %. Among positive factors they name good growth of comparable sales in the first half of the year 2008, which was shown by all networks (from 14 to 29 %), and also readiness of the state to meet ritejleram in working out of the law on trade and delay of rates of increase of the prices for foodstuff.

According to report Merrill Lynch, in the first half of the year 2008 all four has shown growth of comparable sales in a rouble equivalent in spite of the fact that the rise in prices for regiments of networks was more low, than inflation in the market of foodstuff as a whole. For 5 and the Magnet according to analysts, this indicator has made 10-13 % against grocery inflation at a rate of 20 %, the cores drivers which was dairy products, bread, fruit and vegetables. Decrease in rates of increase of the prices for foodstuff allows analysts Merrill Lynch to do optimistical forecasts on development of networks in the second half of the year 2008.

in the report the meeting which has taken place in the end of last week ritejlerov with the first vitse - prime ministers Victor Zubkov and Igor Shuvalov, the minister of the industry and trade in Victor Khristenko and the minister of economic development by Elvira Nabiullina on whom the law on retail trade was discussed also is mentioned. The previous variant of the bill contained rigid restrictions on market shares of networks that the last some weeks made negative impact on papers of the companies. However it has been rejected, and the new, softened variant will be presented in November.

Considering these factors, Merrill Lynch advises to buy papers 5 and the Magnet . By estimations of analysts of the company, fair price GDR X5 for the end of the year makes 44 dollars against present 29 dollars It could be above, it is marked in the report if 5 did not overpay for absorption of new actives. Cost of papers the Magnet according to expectations, should increase with 10,1 to 17,5 dollars 5 and the Magnet in time were engaged in regional expansion, till now were aggressive enough and declare good plans - the analyst of YOKES " marks; Kapital Marina Samohvalova.

to Papers Diksi analysts Merrill Lynch promise growth with 13,5 to 15 dollars From the company expect more active growth in territory of Russia. our objective estimation is reduced by some risks, in particular the company shows not so high rates of development, predictably - it is told in the report. An analyst of the company Metropol Maria Sulima reminds that the great bulk of opening of shops is necessary on the fourth quarter of year. at Diksi still there is time to co-ordinate the plans and actions - she believes. At the same time g - zha Samohvalova considers that at Diksi there is no accurate strategy. our estimation approximately coincides with current cost - the analyst speaks.

the forecast on papers the Seventh continent now is on revision. Their price, under forecasts, by the end of the year can make 25,5 dollars According to an analyst AntantaPioglobal Andrey Verholantseva, the Seventh continent the highest margin loses to other networks on rates of increase, but at the company. He considers that high profitability the Seventh continent Keeps because operates in more expensive price segment unlike competitors. Its estimation on papers the Seventh continent - 26,5 dollars

the Estimation of fair cost of securities Russian ritejlerov on the end of 2008

the Company

the Fair estimation, dollars

the Current price, dollars

the Stock exchange

5 Retail Group (GDR)

44

29,34

LSE

Diksi

15

13,5

RTS

the Magnet (GDR)

17,5

10,8

LSE

the Seventh continent

25,5

26,3

RTS

the Source: Merrill Lynch