The Seventh Continent retail network released Monday its operating results for May 2008. The company's total sales revenue grew by 37% y-o-y in US dollar terms to USD 156 mn. The company has also shown a considerable upturn in regional sales (up 67%) and strong results in the hypermarket format: Seventh Continent's revenue in this segment rose by over 71% in May.
Table. Seventh Continent: Key Indicators May 2008, USD mn
| Indicator | May 2007 | May 2008 | Change May 2008 / May 2007 |
|---|
| Sales revenue incl. VAT, USD mn | 114 | 156 | 37% |
| Moscow region | 94 | 123 | 31% |
| Other regions | 20 | 33 | 65% |
| Total number of stores | 123 | 135 | |
| Selling space, thousand sq.m | 141 | 167 | 18% |
Source: company data, Finam estimates
We are upbeat on the company's operating results; however, they are not likely to produce any significant impact on the company's stock valuations. Despite the small quantity of new store openings, Seventh Continent continues to increase the total number of its retail outlets: following 1Q 2008, the company opened 2 more stores, and thus brought the total number of its outlets to 135 as of May 2008.
In line with our estimates, the fair value of Seventh Continent shares is USD 33.2 per share, a 20% upside on the current market valuation.
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