RE: Wood & Co14 Feb 2025 18:01
How is Solidcore doing? (ex-Polymetal)
The history of Polymetal has been one of the most dramatic in the period after 2022 due to the fact that the company was subject to both Russian and anti-Russian sanctions. Selling promising assets in the Russian Federation, changing key shareholders, cancelling dividends, delisting receipts from the Moscow Exchange, and moving to Kazakhstan with transformation into a purely Kazakh company.
Solidcore is currently a fast-growing company in the active phase of the investment cycle, which now has no sanctions risks, with high financial stability, which demonstrates double-digit growth rates of financial indicators (EBITDA +73% y/y in 1H24, we expect +56% to $685 million by the end of 2024 and, at current gold prices, +11% to $760 million in 2025) and has every chance of returning to dividend payments.
What about quotes in Kazakhstan?
After the company closed the deal to sell its Russian assets in February 2024, its shares on the Kazakhstan AIX were under severe pressure, with the rate of decline significantly exceeding the rate of decline of receipts on the Moscow Exchange, which was probably due to large holders exiting Solidcore shares. The sell-off continued for 4 months at record volumes, after which quotes reached a bottom at $2.5.
Since July 2024, quotes have been in an upward trend, reaching $3.7 by now. Recovery has also begun at record volumes. We see the main growth drivers as rising gold prices, the elimination of sanctions risks, and the completion of share sales by large holders.
How is Solidcore doing? (ex-Polymetal)
Fair price
We believe that Solidcore stock is on a recovery path after a series of shocks. The stock has become detached from fundamentals and is lagging gold prices. We believe that once the sanctions risk is resolved and the sellers leave the AIX, the stock will return to fundamentally sound levels.
Our fair price estimate for Solidcore stock is $6.
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