In a report issued today, Uralsib Capital estimated that Mail.ru Group, an LSE-listed Russian Internet group, is overvalued.
“For minorities, Mail.ru is more of a holding company than an operating one, as a significant part of its value is derived not from the Russian Internet market, but rather from its portfolio of non-public assets, namely its 2.38% stake in Facebook.
“Moreover, we believe these factors, which are behind the success of Mail.ru’s IPO, will subside in the long term, due to expected placements by Facebook and Yandex, which will draw attention away from the company,” say Uralsib analysts.
According to Uralsib, Mail.ru Group is one of only a few Russian IPOs to succeed of late. Since the company’s IPO in November 2010, its shares have risen 36% largely because the company has provided its investors with access to Facebook, considered by many an opportunity not to be missed, as well as to a range of fast-growing Russian Internet projects.
Source: Uralsib Capital
