Expensive shares of Transneft may become more accessible. Is it time to buy them

Transneft has the most expensive shares in RUSSIA. However, the company plans to make them more accessible to private investors. We figure out how the likely split will affect quotes and what else an investor needs to know when considering investing in Transneft

How the company earns

Industry : oil and gas
Ticker
: TRNFP _
_ _

Transneft is engaged in the transportation of oil and oil products through the main pipeline system - this brings it most of the revenue. The company belongs to the state and is actually a monopolist: it transports 82% of oil produced in Russia and 28% of oil products produced in the country. Transneft's largest clients are the Russian companies Rosneft, Gazprom Neft, LUKOIL and Surgutneftegaz, as well as the Chinese CHINA National Petroleum Corporation.

Another source of the company's income is stevedoring and additional port services: the company owns 60.6% in the NCSP group (Novorossiysk Commercial Sea Port).

100% of ordinary shares of Transneft are owned by the state represented by the Federal Property Management Agency. Preferred shares are in free float, amounting to 21.45% of the authorized capital. Because of this, the assessment of Transneft by multipliers may be incorrect.

Preferred shares of Transneft are by far the most expensive securities in Russia. As of September 8, one share of the company costs more than 167 thousand rubles, so not every private investor can afford to invest in Transneft.

Largely because of this, the papers of the monopolist are not highly liquid compared to many other companies in the oil industry. However, Transneft wants to split them up, which will make them potentially more interesting for private investors. Let's figure out how significant the impact of the split on quotes can be and what else Transneft can offer investors.