May
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NefAZ: Good daughter - May 13, 2008
Filed Under Bullet-moments |
Neftekamskiy Avtozavod (NefAZ – Neftekamsk Automobile Plant) is a subsidiary to KAMAZ and currently one of the top producers of trailers based on KAMAZ’ chassis. NefAZ manufactures dump trucks, buses, tank trucks, trailers and semitrailer tanks, as well as general transport trailers and agricultural (farming) vehicles.
The active development of industry, construction, development of road network, mining, all this provokes high and stable demand for production of NefAZ. However, this also holds some negative issues for company’s business. Primary risk is related to the fact that company does not hold required production capacities, hence, those holes in demand now attract foreign competitors, that now try to conquer them. However, NefAZ is an active partner to western companies, purchasing new and high output equipment, may still ensure some competitive benefits, hence, ensuring client base and stable flow of orders.
The equity structure of NefAZ is rather simple. Control of company is held by KAMAZ (50.02%), 28.5% of company’ stocks are held by the government of Bashkortostan in person of Bashkortostan’s ministry of property. Another 7.5% are held by Cyprus’ Roscoe Holding Ltd.
Forecast of NefAZ financials is based on company’s plan to increase production capacities and forecast of industrial production’s growth rate. Besides of that, the strategic program by NefAZ to 2010 includes 39 mn USD of cash, which is set to develop primary and profitable segments: dump trucks, trailers and tank trucks.
Our analysis of NefAZ with DCF method showed: fair price of company’s stock is 49.15 USD apiece. Currently, the stocks of NefAZ are traded at 37.18 USD a piece. DCF analysis was also confirmed by multipliers method, proving that company’s stock is relatively cheap if compared to foreign counterparts. Growth potential for year 2008 is 32.21%. We now recommend “BUY” for stocks of NefAZ.
Neftekamskiy Avtozavod (NefAZ – Neftekamsk Automobile Plant) is a subsidiary to KAMAZ and currently one of the top producers of trailers based on KAMAZ’ chassis. NefAZ manufactures dump trucks, buses, tank trucks, trailers and semitrailer tanks, as well as general transport trailers and agricultural (farming) vehicles
NefAZ: Good daughter - May 13, 2008 (PDF)