- Yandex (NASDAQ:YNDX) is up 4.9% today after a callout by Morgan Stanley as the best play to capture structural upside from Russian Internet.
- It sees the Russian ecosystem evolving toward the Chinese model of super apps - but with less scope for fintech expansion. The duopoly of Yandex and Mail.ru (OTC:MLRYY) have been expanding outside core businesses, it says, and similar to the environment in China, they've been getting support from limited international competition and supportive regulators.
- But fintech disruption (a "key pillar of super app success in China") may be less significant in Russia, due to a "well established payments infrastructure and digitally savvy banks which are focused on increasing interactions with customers beyond financial services."
- It's forecasting a total addressable market of $134B by 2025 across four key verticals (ride hailing, food delivery, e-commerce and payments), from a current TMA of $51B.
- Yandex already has the most complete ecosystem, it notes, and higher forecasts in ride-hailing and e-commerce drive the price target to $75.
- It's also Overweight on Sberbank (SBRCY +2.1%) - a show-me story considering regulatory risks, but with high potential for success given a strong platform and large customer base.