Aug
5
In the research we continue to analyze WGCs and also reviewing their fundamental prices, on the basis of the financial and production results of 2007.
We have analyzed all WGCs, through discounting cash flows method and put some corrections in our previous forecasts. The changes in our forecasts of fuel and energy prices. We tried to take into account all the data, concerning their investment programs, while making forecasts of CapEx value. We also made our forecasts on the basis of information about all additional emissions, which were conducted by WGCs and aimed at decrease of companies’ CapEx.
WGCs have kept sound trends and we hope that during energy and power market liberalization, the fundamental results will be increased, which will have a positive effect on their capitalization. It should be mentioned that now, when the companies’ shares price decreased, it is not a good moment for investments. It better to buy shares of WGCs after full reorganization of UES. The deal is that after UES’ liquidation, its minority shareholders will get the shares of its subsidiaries and a lot of shareholders will try to sell them. This will occur thanks to speculative opportunity to get a profit, because the total subsidiaries’ value is higher than UES’. It will cause a fall of share prices of many energy companies. The only exception is WGC-5 shares, which already had been separated from UES.
According to all said above, we have increased our estimations. We changed our recommendation, concerning WGC-1, WGC-2 from “ACCUMULATE” to “BUY”, for WGC-3: from “SELL” to “ACCUMULATE”, for WGC-4: from “HOLD” to “BUY”, for WGC-6: from “REDUCE” to “BUY”. The “BUY” recommendation for WGC-5 was not changed.
WGC: Beginning of free floating - August 5, 2008 (PDF)