Jul
18
With this research we continue the analysis of territorial generating companies of Russia, reviewing financial models of TGC-1, TGC-2 and TGC-5, launching analysis of TGC-6 and TGC-8. We have estimated them, using the method of discounted cash flows, adding several corrections into our forecasts.
We have corrected our forecasts for late 2008, considering the fact that some serious global changes over the capital markets have occurred, influencing the discount rate.
Where we had the chance – we renewed financial and production results of the companies. We have published regulated tariffs for electric power and output of 2008, also putting the new approach to forecasting of regulated and free tariffs to use. Also, we have attempted to consider the capital expenses of companies, using the latest available data on investment programs, which were also changed since the publication of our previous report on given companies, adding known and expected additional offerings (aimed at investment raising) and corresponding changes in equity.
Thus, we recommend “BUY” on common stocks of TGC-1 – due to a high potential in long-term. Similar recommendation is also issued to stocks of TGC-5, as stock have lost a considerable deal of value, because many speculative investors of UES were too eager to sell the stocks, after the company was divided from the holding. We recommend “BUY” on common and preferred stock of TGC-2. At the same time we recommend “REDUCE” stocks of TGC-6 and “SELL” stocks of TGC-8 – due to their overrating by the market.
TGC: Good changes are still ahead - July 18, 2008 (PDF)
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