Initiating with a BUY recommendation – 72% upside potential
We initiate coverage of Alrosa, the world’s second largest diamond producer, with a Buy recommendation. Our fair value of USD 16,345 per share implies 72% upside for 2011 year-end. Even when applying fairly conservative price assumptions for raw diamonds – a 3% CAGR in 2010-2016 – the stock is undervalued in our view. Due to low liquidity and transparency, Alrosa trades at a more than 40% discount on P/E and EV/EBITDA multiples to small diamond producers, as well as to diversified mining companies.
We reduce our end-2010 FV for OGK-2 to RUB 1.96 and raise OGK-6’s to RUB 1.39, while maintaining Buy recommendations on both
We have revised our model following the release of 1H 10 IFRS results by OGK-2 and OGK-6 and Gazprom Power’s investor day. As a result, we have reduced our estimated fair value for OGK-2 by 23% from RUB 2.53 to RUB 1.96/share and increased our fair value for OGK-6 by 5% from RUB 1.33 to RUB 1.39/share for end-2010.
Мы понижаем справедливую стоимость акций ОГК-2 на конец 2010 г. до 1,96 руб. за акцию и повышаем справедливую стоимость акций ОГК-6 до 1,39 руб. за акцию на конец 2010 г. Рекомендация «Покупать» акции обеих компаний сохранена.
Мы пересмотрели наши модели по компаниям ОГК-2 и ОГК-6 после публикации их отчетности по МСФО за 1П 2010 г., а также после дня инвестора, проведенного Газпромом. В результате, мы понижаем нашу справедливую стоимость акций ОГК-2 на 23% с 2,53 руб. за акцию до 1,96 руб. и повышаем справедливую стоимость акций ОГК-6 на 5% с 1,33 руб. за акцию до 1,39 руб. за акцию на конец 2010 г.
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