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IFC Seimer published its operating report for 3Q24. The volume of issuance amounted to 13.4 billion rubles. (-3% QoQ, -2% YoY). In the PDL sector, issuance to new clients decreased by 15% from the previous quarter, and issuance to existing clients also decreased by 14% from the previous quarter. As MPL rules have been tightened, the company has reduced its approval rates for new clients and existing borrowers who are at higher risk of default. Disbursement of medium-term loans (IL) increased by 17% (+77% YoY) QoQ and is gradually replacing PDL loans due to deregulation of the IL sector (the share of IL in total disbursement in Q3 2024 was 41%). IL loans are available only to regular clients.
The company plans to announce the IFRS results for the third quarter on October 24. According to our estimates, the profit will be 1.07 billion rubles. (-11% QoQ, return on equity 34%). Provisions are expected to increase in 3Q24 compared to the previous quarter, as legal fees have increased several times since September (there will probably be a temporary halt in the transfer market activity in 3Q24). We expect that based on the results of Q3'24, the company will distribute 50% of profits to shareholders (this is the minimum amount provided for by the dividend policy), and according to our estimates, the amount of the quarterly payment will be 5.33 rubles. per share (estimated dividend yield - 3.3%). We believe that the company may need liquidity due to the busy season.
At current prices, Seimer IFC shares trade with an expected return on equity of over 30% and a forward P/E multiple of 4.3x. In our view, the main risks associated with the microfinance industry are already built into its share price. It should be noted that the company adheres to a long-term strategy and is free from unfair practices. Seimer’s investment case assumes a generous current dividend payout (17% annual yield), which would immediately offset slowing growth and deteriorating business performance. In the long term, IFC Seimer shares can be considered an option for market consolidation, new product development, and the company’s potential involvement in M&A transactions.