Sector: Distribution Grids
The formation of MRSK – one of Russia’s largest regional grid distribution companies - is to be wrapped up by April 1, 2008. We view this company as very attractive as a long-term investment vehicle. According to our estimates, the capitalization of MRSK Center after 11 grid distribution companies are folded into it, will be at least $2.3 bln.
Eleven regional grid companies are to be folded into MRSK Center no later than April 1, 2008, as reported by Interfax on Wednesday. Registration of the additional issue of MRSK Center, which is to be used in order to convert the shares of regional grid companies during the merger process, should take place before March 20.
The following utility concerns are slated to be merged with MRSK Center: Belgorodenergo, Bryanskenergo, Voronezhenergo, Kostromaenergo, Kurskenergo, Lipetskenergo, Orelenergo, Tambovenergo, Smolenskenergo, Tverenergo, and Yarenergo. After consolidation with MRSK and registration of the report on the results of the additional offering, the merged company will have its shares listed on the stock market. The listing is expected to take place by July 17, 2008.
According to our estimates, the capitalization of MRSK Center after consolidation is completed will be at least $2.38 bln. This company will become one of the largest regional grid distribution companies. The best vehicles for entering the equity capital of MRSK Center is now Lipetskenergo, Bryanskenergo (prefs), Tverenergo (prefs) and Kostromaenergo (prefs).
| Company | Ticker | Target price, $ | Current price, $ | Downside/upside, % | Recommendation |
| Lipetskenergo |
LIEN |
1.907 |
1.035 |
84% |
Buy |
| Bryanskenergo (prefs) |
BRENP |
11.901 |
7.357 |
62% |
Buy |
| Tverenergo (prefs) |
TVREP |
0.435 |
0.279 |
56% |
Buy |
| Kostromaenergo (prefs) |
KOSGP |
0.227 |
0.146 |
56% |
Buy |
| Smolenskenergo (prefs) |
SMOEP |
0.739 |
0.483 |
53% |
Buy |
| Voronezhenergo |
VZEN |
3.931 |
2.732 |
44% |
Buy |
| Voronezhenergo (prefs) |
VZEN |
3.538 |
2.467 |
43% |
Buy |
| Kurskenergo (prefs) |
KUENP |
0.151 |
0.107 |
42% |
Buy |
| Bryanskenergo |
BREN |
13.223 |
9.452 |
40% |
Buy |
| Smolenskenergo |
SMOE |
0.821 |
0.595 |
38% |
Buy |
| Kostromaenergo |
KOSG |
0.253 |
0.183 |
38% |
Buy |
| Tverenergo |
TVRE |
0.483 |
0.353 |
37% |
Buy |
| Yarenergo |
YARE |
10.267 |
7.580 |
35% |
Buy |
| Orelenergo (prefs) |
ORENP |
0.437 |
0.326 |
34% |
Buy |
| Kurskenergo |
KUEN |
0.168 |
0.126 |
33% |
Buy |
| Tambovenergo (prefs) |
TAENP |
0.080 |
0.061 |
32% |
Buy |
| Yarenergo (prefs) |
YAREP |
9.241 |
7.116 |
30% |
Buy |
| Tambovenergo |
TAEN |
0.089 |
0.068 |
30% |
Buy |
| Belgorodenergo (prefs) |
BLRSP |
306.39 |
288.84 |
6% |
Hold |
| Belgorodenergo |
BLRS |
340.44 |
356.42 |
-4% |
Sell |
| Orelenergo |
OREN |
0.486 |
0.654 |
-26% |
Sell |
Yushkova Elena
Other comments of the day
|
Belgorodenergo
Capitalization: $612 621 842,50
Common shares:
Price: $545,00
Delta week: 0,00%
Delta month: 0,00%
Delta year: 10,1%
Preferred shares:
Price: $492,50
Delta week: 0,00%
Delta month: 0,00%
Delta year: 11,8%
Bryanskenergo
Capitalization: $155 157 772,00
Common shares:
Price: $12,53
Delta week: 0,00%
Delta month: 0,00%
Delta year: 5,7%
Preferred shares:
Price: $11,45
Delta week: 0,00%
Delta month: 0,00%
Delta year: 1,7%
Kostromaenergo
Capitalization: $114 519 686,40
Common shares:
Price: $0,21
Delta week: 0,00%
Delta month: 0,00%
Delta year: 4,2%
Preferred shares:
Price: $0,21
Delta week: 0,00%
Delta month: 0,00%
Delta year: 11,7%
Lipetskenergo
Capitalization: $191 291 998,50
Common shares:
Price: $1,23
Delta week: 0,00%
Delta month: 0,00%
Delta year: 6,5%
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0.244
0.616
