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Segezha Group: The road to Russian forest riches

  • We initiate coverage of Segezha Group PJSC with a RUB10.0/share 12M target price and an Overweight (O/W) recommendation
  • Segezha Group represents Russia’s forest products industry, which unlikeother national natural resources industries
  • Segezha Group is a low-cost producer in the growing global market

We initiate coverage of Segezha Group PJSC with a RUB10.0/share 12M target price and an Overweight (O/W) recommendation. Our TP shows 31% upside from the current market price and 25% upside from the IPO price.

Segezha Group represents Russia’s forest products industry, which unlike other national natural resources industries (Oil & Gas, Energy, Metals & Mining, Chemical Fertilizers) remained non-public and inaccessible to institutional investors over recent decades, but similarly, it is one of the leaders on a global scale by available resources. Russia possesses ~50% of the world’s boreal forest softwood (SW) resources and accounted for 12.5% of global SW harvesting volumes in 2019. The renewable nature of forest resources provides an advantage compared to non-renewable sectors.

Segezha Group is a low-cost producer in the growing global market, which offers an attractive combination of an extensive resource base, diversified product and sales geography mix, top positioning in target markets, firm organic expansion plans and a positive FCF outlook. An established corporate governance system and commitment to best ESG practices complement the solid business case.

See our 102-page initiation report for full details on the company.


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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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