In the middle of July, a new issuer will appear on the MICEX - European Medical Center, or abbreviated as EMC.
About company
EMC - an elite network of personal clinics, which consists of 7 multidisciplinary medical centers, which are located in the capital of Russia and the Moscow region. Despite the Russian residence, all offers of the organization are denominated in euros.
Income structure
| Oncology | eighteen percent |
| Women Health | ten percent |
| Therapy | ten percent |
| Traumatology and orthopedics | nine percent |
| Emergency help | seven percent |
| Surgery | seven percent |
| caring for the old | six percent |
| Cardiovascular disease | six percent |
| Dentistry | five percent |
| Neurology and Neurosurgery | four percent |
| Clinic of aesthetic medicine | four percent |
| Otolaryngologist | three percent |
| Urology | three percent |
| Ophthalmology | Two Percent |
| Dermatology | Two Percent |
| Other services | four percent |
The company distributes between its shareholders up to one hundred percent of net income under IFRS. €114 million to be paid in 2021, which consists of dividends for 2020 year in size 76 million euros and dividends for 1 half year 2021 in the amount of 38 million euros.
Given the probable valuation of the company from 1,125 up to $1.26 billion, then this implies 10.6-11.9 % dividend efficiency. To compare: EMC's total dividend distribution to shareholders for 2018-2020 amounted to 140 million euros, which is equivalent to seventy-three percent of the annual net income for these 3 of the year.
Monetary characteristics of the company, million euros
| Revenue | Adjusted EBITDA | Net profit | |
|---|---|---|---|
| 2018 | 194,6 | 82,6 | 51,7 |
| 2019 | 219,7 | 82,8 | 59,5 |
| 2020 | 241,3 | 97,3 | 80,6 |
Current shareholders
| INS Holdings, beneficiary — Igor Shilov | 71,2% |
| Hiolot Holdings, the beneficiary is Yegor Kulkov | 20,8% |
| Greenleas International Holdings, beneficiary — Roman Abramovich | 6,9% |
| Other shareholders | 1,1% |
Preliminary IPO parameters
As part of the IPO, the company will not issue new shares: the main owners will put up their GDRs for sale. They intend to sell about 40 million securities, which will provide EMC with free-float of order 44%.
The preliminary price range is set at the level of 12,5 to 14 $ for one GDR. The capitalization of the group will be from 1,125 up to $1.26 billion.
The start of trading on the Moscow Exchange is scheduled for 15 July 2021. The company will be assigned ticker GEMC, and she will immediately receive the first level of listing.
EMC Pre-Multipliers:
- EV / Adjusted EBITDA - 10.99-12.17;
- P / E — 11,82—13,25;
- P / S — 4,1—4,59;
- net debt / Adjusted EBITDA — 1,2.
Current assessment of a competitor of GC "Mother and Child" (MDMG):
- EV / EBITDA — 10,82;
- P / E — 14,32;
- P / S — 3,24;
- net debt / EBITDA — 0,49.
Arguments for
Location. Strong macroeconomic indicators of the Moscow region and the growth of the medical services market will help EMC grow at a faster pace in the future.
Foreign exchange business model. The risk of ruble depreciation is completely neutralized.
Dividends. EMC's profit sharing ratio is 70-100% of net profit, while another Russian issuer, Mother and Child, pays only 50% net profit.
Financial condition. The company has a low debt burden, allowing EMC to allocate up to 100% net profit. As of 31 March 2021, the net debt/adjusted EBITDA multiplier is equal to 1,2.
Arguments against
Evaluation. Compared to the Russian market, EMC's estimate of 11-12 annual EBITDA may seem too high.
Large Initial IPO Offer. 15 July investors will be offered 44% from the authorized capital of the company.
