Vostok Nafta Investment Twelve Months Report 2013 (VNV Global)

Summary

• Net result for the period was USD 364.63 million, compared with 119.74 in 2012.p.3
• Net asset value was USD 633.97 mln on December 31, 2013 (December 31, 2012: 329.58), or USD 7.05 (3.67) per share.p.3
• Net asset value per share in USD increased by 91.96%, or by 110.21% excluding the distribution of holdings in Black Earth Farming and RusForest, while the RTS index decreased by 5.52%.p.3
• On October 25, 2013, Vostok Nafta sold 13,824,381 shares in TCS Group Holding PLC for a total purchase price of USD 232.25 million after applicable fees.p.3
• Avito was revalued at SEK 255 per underlying share, equating to a valuation of approximately USD 1.8 bln for the whole company.p.3
• In the quarter October 1, 2013–December 31, 2013 the net asset value per share in USD increased by 161.34% (RTS index: 1.42%).p.6
• Avito revenues in 9M 2013 were RUB 1.6 bln, up 167% compared with 9M 2012.p.7

Key insights

1. Vostok Nafta will increase its shareholding in Avito from 13.3% to an indicative 13.7% on a fully diluted basis.p.3
2. Smartphone penetration in Russia is only some 25% and growing fast.p.4
3. Applying EUR 10 per internet user to an internet population of 100 million would result in a revenue base of some EUR 1 bln for Avito.p.5
4. Banks covering Avito through other listed shareholders value it at an average of roughly USD 3 bln.p.5
5. Avito had more than USD 100 mln in cash at the end of 3Q13.p.7
6. TCS grew its gross loan portfolio to USD 2.4 bln as of 9M13, up 40.6% YTD, with a market share of 7.5% as the #3 credit card issuer in Russia.p.8
7. Net result for the quarter was USD 390.07 mln (82.47).p.9