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Morning Alert: NovaTek increases 0.9%, leads market higher 18 October 2017 11:38 SAMT

NEWS BITES - BRIC

NovaTek (MICEX:NVTK) has increased 0.9% to trade at RUB663.90 vs. the MICEX Index which strengthened 2.9 points (or 0.1%) to 2,093.8. Representing a weighting of about 6.9% of the index, the stock accounted for 42.5% of today's gain. Trading volume was 1.4 times average so far today.

SECTION 1: Technical indicators

Bullish:

The positive 14.52 MACD (Moving Average Convergence Divergence) indicator suggests a bullish signal (12-day minus 26-day Exponential Moving Averages). Both the 12-day and the 26-day EMA are rising - another bullish signal. In the past week, the stock's MACD has been positive every day, a reinforcing bullish signal.

The present value of RUB1,000 invested one year ago is RUB1,006 [vs RUB1,065 for the MICEX Index], including a capital loss of RUB4 and dividend reinvested of RUB10. The total return to shareholders for 1 year is 0.6%.

Fundamental measures by comparison with the sector average [in brackets] indicate:

Parity:

Price/Earnings of 7.8 [7.8]

Price to Book of 3.1 [3.1]

Return on Equity 42.0% [39.8%]

Return on Assets 27.5% [26.7%]

Undervaluation:

Dividend yield of 1.1% [0.1%]

Total Liabilities/EBITDA of 1.1 is comfortably below the Joseph Piotroski benchmark of <5.

Overvaluation:

Price/Earnings/Growth of 0.24 [0.03]

Note

The stock is at a discount of 17.1% to the 12-month high of RUB800.70 on 14 Dec, 2016. It is also at a premium of 12.5% to the 12-month low of RUB590.20 on 18 Aug, 2017.

Bearish:

In the last three months the stock has hit a new 52-week low five times, pointing to a downtrend.

The price dropped 2.1% in the last week.

SECTION 2: Ranking

DescriptionValueRank In Market
MCap $US billion34.9In Top 6%
52-week Range (in RUB)590.2-800.7
1-month Range (in RUB)605.6-686.4

SECTION 3: Earnings

FY2016 Annual Report: NovaTek Net Profit up 247%

NovaTek (MICEX:NVTK) reported net profit for the year-ended 31 December 2016 of RUB258b ($US4.2b), up 246.5% from RUB74.4b ($US1.0b) in the previous year.

Major changes compared with previous year:

Favourable Changes:

- Total revenue up 13.1% from RUB475.3b ($US6.5b) to RUB537.5b ($US8.8b)

- Total revenue to total assets up from 0.5 to 0.6

- Profit before tax to Revenues up from 19.6% to 57.3%

- Interest revenue to Revenues up from 2.7% to 3.5%

- Debt to Equity down 60.7% from 0.8 to 0.3

- Total liabilities to Total assets down 37.3% from 0.5 to 0.3

- Current ratio up 71.8% from 0.7 to 1.2

- Retained earnings to total assets up from 45.4% to 64.2%

- Long-term investments to Total Assets up from 17.6% to 26.9%

- Cash to Total Assets up from 3.3% to 5%

- Total Liabilities to EBITDA of 1.1 compares favourably with the Joseph Piotroski benchmark of less than 5. This ratio has improved by 80.7% from the previous year's ratio of 5.5.

- Total Liabilities to Operating Cash Flow of 1.8 compares favourably with the Joseph Piotroski benchmark of less than 4. This ratio has improved by 48.2% from the previous year's ratio of 3.4.

Unfavourable Changes:

- Administration expenses to Revenues up from 3% to 3.4%

- Interest expenses to Revenues up from 1.8% to 2.2%

- Fixed Assets to Total Assets down from 37.7% to 34.4%

Note:

- Tax expenses to Revenues up from 4% to 8%

- Total non-current assets to Total Assets up from 85.4% to 86.2%

- Total current assets to Total Assets up from 13.7% to 13.8%

SECTION 4: Recent News of NovaTek

October 06: NOVATEK's Shareholders Approve Interim Dividends

Moscow, 2 October 2017. The Extraordinary General Meeting of Shareholders ("EGM") of PAO NOVATEK held on 29 September 2017 resolved to pay dividends for the first half 2017.

The EGM approved the interim dividend payment for the first half 2017 in the amount of RR 6.95 per one ordinary share or RR 69.50 per one GDR which is 0.7% higher as compared to the interim dividend for the first half 2016.

The total dividend distribution amounts to RR 21,102,326,700.

October 06: NovaTek: Notification by Persons Discharging Managerial Responsibilities and Persons Closely Associated with them

Details of the person discharging managerial responsibilities / person closely associated

Source: Company Website

October 05: NOVATEK's 2017 Corporate Strategy Day

PAO NOVATEK ("NOVATEK" and/or the "Company") will host a Corporate Strategy Day on Tuesday, 12 December 2017 at Ararat Park Hyatt Hotel in Moscow. The Company's top management will present NOVATEK's long-term corporate strategy followed by a question and answer session.

Source: Company Website

August 25: NOVATEK Obtains New License Areas in Yamal and Gydan

Moscow, 25 August, 2017. PAO NOVATEK ("NOVATEK" and/or the "Company") announces that its subsidiaries OOO Arctic LNG-2 and OOO NOVATEK-Yurkharovneftegas obtained new license areas in the Yamal and Gydan peninsulas, which significantly expands the Company's resource base for implementing new LNG projects.

OOO Arctic LNG-2 won the bid for a geological survey, exploration and hydrocarbons production license for the subsoil area including the Shtormovoye field.

August 25: NOVATEK's Board of Directors Recommend 1H 2017 Dividend

25 August 2017

Moscow, 25 August 2017. The Board of Directors (the "Board") of PAO NOVATEK ("NOVATEK" and/or the "Company") discussed the Company's results for the first half 2017 and decided to convene an Extraordinary General Meeting of Shareholders ("EGM") on 29 September 2017 in the form of absentee voting, with the following agenda:

1.

NovaTek (M:NVTK; MCX:NVTK; MM:NVTK; RM:NVTK)

ISIN: RU000A0DKVS5

PermID: 4295886976

Source: www.BuySellSignals.com