After the Bank of Russia identified a number of violations in the work of Qiwi Bank, imposed a large fine and set a number of restrictions that would affect the Contact system, Qiwi’s shares collapsed, losing about 20% in one day. Foreign law firms that specialize in investor protection are planning to take the company to court.
Does this mean that a black streak has come for Qiwi shares, and in the near future we can not count on their growth? Nikolay Dudchenko, an independent financial analyst, answered a question from Fortrader magazine.
– The Russian banking sector is a very dangerous territory, which it is better to enter only after being prepared. As the experience of recent years shows, the Central Bank is not afraid to carry out a global clean-up of the sector. Over the last 2019, 43 organizations ceased to exist. In 2020, licenses were revoked from 6 banks. By the way, experts associate the suspension of the purge with the pandemic, that is, COVID could simply “save” a number of banks. As a result, the closer the end of the coronavirus crisis is, the more likely it is that we will hear more and more often about the suspension of a particular credit institution.
As for Qiwi Bank, the current situation does not look very serious. Violations identified by the regulator during the audit relate to the reporting and documentation requirements. Simply put, the bank does not know how to fill out the paperwork correctly, which in general is not critical and is eliminated quite quickly. And the amount of the fine is ridiculous by the standards of the bank – 11 million rubles. The problem is in the restrictions imposed by the Central Bank on payments in favor of foreign trading companies. This can lead to serious consequences, both in terms of a decrease in revenue growth rates and in the form of legal claims from foreign counterparties.
It should be noted here that this is far from the first time that claims have been made against Qiwi. For example, in 2013, the bank revealed violations in terms of internal control, and in 2014, the Central Bank made claims for non-compliance with the standards in the field of electronic money.
Conclusion: buying shares Qiwi, you need to be fully aware of all the possible regulatory risks, of which there are many.
The last limitation of the Central Bank may significantly affect the company’s revenue. The bank provided comments in which it noted that if the current restrictions were imposed from the beginning of 2020, then up to 40% of the company’s revenue would be negatively affected. In early 2021, Qiwi plans to present its revenue forecast for next year. For now, we will take a look at the current reporting of the company.
Qiwi bank reporting indicators
In 2020, the company’s capitalization is about 50 billion rubles. At the same time, the value of the company’s assets in the first 3 quarters of 2020 amounted to about 74 billion rubles. For a fairly long period of time, the company has been demonstrating significant revenue growth rates. For 2018-2019 they amounted to 28.5%. For 2017-2018 revenue increased by 46.4%. The debt load of the company (the ratio of all debts to all assets) is quite low and amounts to only 58.2%. The company demonstrates high profitability indicators (average ROE over 5 years is almost 18%, ROA is 7.61%) – this speaks of management efficiency. Key multiples also set the company apart from the industry quite favorably. P / E = 4.63 (in the industry 28.36); P / S = 1.24 (6.82 in the industry). Thus, we can talk about the underestimation of Qiwi shares compared to the industry.
Technical picture of Qiwi shares
From a technical point of view, the support range in Qiwi shares is at the level of 700-800 rubles. per share. Shares are in the long-term “sideways” with the upper limit of about 1,500 rubles. for the paper. The fall of the company’s securities led to testing the lower border of the range, which allows counting on a reversal in the future.
conclusions: the case when “and wants and pricks.” If we turn a blind eye to the regulatory hurdles, the stock looks attractive from both a fundamental and a technical point of view. However, recent events make one think about risks, which means they make these papers not interesting for those who are not tolerant of them. What to do in this situation? Everyone must decide for himself.