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QIWI: Reports unimpressive 1Q21 numbers, reiterates cautious guidance – Neutral

  • QIWI reported expectedly unimpressive 1Q21 results with total net revenue 18% and PS net revenue 11% below 1Q20
  • Payment Services enter negative zone with the net revenue down 11% y/y
  • Healthy mid-teens growth in Corporate and Other, though losses deepen q/q

QIWI (QIWI US, U/R) reported expectedly unimpressive 1Q21 results with total net revenue 18% and PS net revenue 11% below 1Q20 as a result of restrictions imposed by the CBR on cross-border business. The company reiterated is 2021 guidance, which supposes 15-25% revenue drop from 2020, while the current BBG consensus envisages 43% decrease. The company declared a $0.22/share in quarterly DPS (2% yield), which is unlikely to influence the stock price, in our view. Overall, we treat the reporting as Neutral-to-Negative for the stock price.

Payment Services enter negative zone with the net revenue down 11% y/y. Core PS net revenue reached RUB4.8bn marking an 11% drop y/y compared to the 11-6% y/y expansion in Q3-Q4 of 2020. The decrease was predominantly driven by a reduction of the e-commerce net revenue yield following the discontinuation of higher-yielding cross-border payments due to the CBR restrictions and a respective decline of the hare of e-commerce volume in total PS volume. PS Payment net revenue decline was partially offset by the y/y payment volume growth primarily due to the money remittance volumes. We note that the PS net revenue decrease of 11% in Q1 came better than the company’s guidance of a 15-25% y/y drop in 2021, which points for further deterioration of segment’s dynamics in following quarters (particularly in Q3 given to high base effect). Among other streams we note continuous solid dynamics by money remittances (+40.6% y/y, +4.7% q/q) and a deep decline in telecom (-20.6% y/y, +12% q/q).

Healthy mid-teens growth in Corporate and Other, though losses deepen q/q. Corporate and Other (CO) revenue – which includes Tochka, Factoring PLUS, Flocktory marketing solutions and other start-ups – of RUB0.40bn continued showing healthy dynamics (+14% y/y vs. +18% in Q4) mainly driven by Factoring PLUS (1.93x y/y), which offset revenue losses by Tochka. Flocktory development pace was also solid with revenue up 48% y/y. CO 1Q21 net loss came at RUB419mn compared to c.RUB115-162mn in both Q1 and Q4 2020, as Flocktory’s net results turned negative as well as deepening of corporate loss.

$0.22/share in quarterly DPS offers 2.0% yield (8.0% annualised). The dividend record date is 22 June and the company intends to pay the dividend on 24 June. The announced DPS amount was below the $0.31/share which was paid for 4Q20. QIWI reiterated its target to distribute at least 50% of 2021 adjusted net profit on a quarterly basis.

2021 guidance reiterated, PS dynamics remains a function of substitution of lost cross-border revenue and QIWI’s place in new betting industry landscape. Total net revenue is expected to decrease by 15-25% from 2020 (vs. a 43% drop expected by BBG consensus) with 15-25% y/y drop in Payment Services net revenue. Adjusted net profit is expected to shrink between 15% and 30% from 2020 (vs. BBG consensus estimate -24% y/y).

Conference call. QIWI will host a related conference call today at 15.30 (Moscow time), 13.30 (London time). The conference call can be accessed live over the phone by dialing +1 (877) 407-3982 or for international callers by dialing +1 (201) 493-6780. A replay will be available at 11:30 a.m. ET and can be accessed by dialing +1 (844) 512-2921 or +1 (412) 317-6671 for international callers; the pin number is 13719425. The call will be webcast live from the Company’s website under the Corporate Investor Relations section.


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The contents of this document have been prepared by Joint Stock Company “Alfa-Bank” ("Alfa Bank") as Investment Research within the meaning of Article 36 of Commission Delegated Regulation (EU) 2017/5...

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