Jun
16
Belogorodasbestocement (BELACI) was established some 50 years ago and ever since produces asbestos-cement slate (asbestos sheeting). Though company constantly expands its product range, integrating more and more various construction materials. Company’s products are then sold mostly over RF.
The primary consumer of these products by company is individual and low-rise construction. Therefore the growth of townhouses (dachas) construction, on par with cottages and such would stimulate the consumption of asbestos-cement goods. According to Gosstroi’s forecasts, to year 2010 the volumes of individual housings construction should hike up several times. Therefore, despite of all collisions, regarding rumors about asbestos being hazardous (though it has not been confirmed scientifically) and appearance of alternative construction materials (but, more expensive ones), on par with that – demand in company’s products is likely to expands.
According to results of 2007 company had demonstrated a growth of financials and an insignificant improvement of economic effectiveness. But, 1Q of this year brought some losses. Given negative change, was caused by the season nature of company’s activity – in our opinion. First quarter is traditionally the “dead season” for the company. Whilst primary sales are spread around second and third quarters. Thus – we assume that financial results of 1H and 9 months should make the picture brighter.
After conducting company’s business valuation, we have calculated the fair price for stock of Belgorodasbestocement at 588.58 USD. The securities are lightly liquid and RTS currently offers to buy them only). Nevertheless, company’s growth potential is almost 100%. Therefore we recommend “SPECULATIVE BUY” on stocks of Belgorodasbestocement.
Belgorodasbestocement (BELACI): Snapping the slate: - June 16, 2008 (PDF)
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