Investment idea: Sistema and the IPO of its subsidiaries

Since Ozon's IPO, Sistema has lagged behind Ozon and MTS by almost 20%. In an interview with Forbes magazine, Vladimir Evtushenkov said that Sistema's shares should grow to at least 40-42 rubles and announced plans to float several more subsidiaries. According to unconfirmed data, an IPO of Sistema-owned timber holding Segezha, pharma holding Binnopharm, agroholding Step and Medsi network of clinics may take place in the next two months.

Is it worth buying Sistema's shares now for the future, with a view to the IPO of its subsidiaries? Leonid Delitsyn, analyst of Finam Group, shared his opinion with Fortrader magazine.

- Reports about a possible IPO or the sale of a large stake in the Medsi chain of clinics have been appearing since at least early 2019. Two years have passed. Recently, it was reported that a public offering could be pushed back to 2022. In early 2018, the head of Sistema's investment portfolio, who was then also the chairman of Steppe Agro Holding's board of directors, said that the IPO of the agro-asset was being postponed from 2019 to 2020. In total, the idea has been circulating in the media for three years.

Then Ali Uzdenov also revealed the strategic approach, which is to conduct the IPO at the moment when it will allow to get the maximum profit. Finally, as you know, the company is in its 23rd year, and perhaps Sistema has indeed made the most of this IPO. Sistema is definitely not a hasty investor who gets rid of assets quickly.

It follows that the idea to buy Sistema's shares with a view to the IPO of its subsidiaries should be focused on a 3-5 year horizon.