All news
Market news | Zaimer's dividends for 3Q24, according to our estimates, may amount to about 5.33 ₽ per share (DD - 3.3%) - Alfa-Bank
MFC Seimer published its 3Q24 operating report. Issuance volume amounted to RUB 13.4 billion (-3% q/q, -2% y/y). In the PDL sector, new issuance decreased by 15% qoq, while issuance to regular customers also decreased by 14% qoq. As MPL regulations have tightened, the company reduced the approval rate for new customers and regular borrowers who are at higher risk of default. Medium-term loan (IL) issuance increased by 17% (+77% y/y) qoq and is gradually replacing PDL loans due to the deregulation of the IL sector (IL share in total issuance in Q3 2024 was 41%). IL loans are available only to regular customers.
The company plans to announce its third-quarter IFRS results on October 24. We estimate profit to be RUB 1.07 billion (-11% q/q, ROE 34%). Reserves in 3Q24 are expected to increase qoq as legal fees have increased several-fold since September (there will likely be a temporary disruption in transfer market activity in 3Q24). We expect the company to distribute 50% of its profits to shareholders based on its third-quarter 24 results (the minimum amount stipulated by the dividend policy), and we estimate the quarterly payment to be RUB 5.33 per share (estimated dividend yield of 3.3%). We believe the company may need liquidity due to the peak season.
At current prices, Seimer IFC shares trade at an expected return on equity of over 30% and a forward P/E of 4.3x. In our view, the key risks associated with the microfinance industry are already priced into the stock. At the same time, it should be noted that the company has a long-term strategy and is free from unfair practices. Seimer’s investment case assumes a generous current dividend payout (annual yield of 17%), which will immediately offset slower growth and deterioration in business performance. In the long term, IFC Seimer shares can be viewed as an option for market consolidation, new product development and potential M&A.