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The company's 4M 2008 operating results underscore that KAMAZ has retained the robust production growth of 2007. This is in line with market expectations and should not have the slightest impact on the company's stock valuations. However, the company's production growth is weaker than that of the truck market as a whole, which has gradually decreased KAMAZ's market share.
On May 13 KAMAZ released 4M 2008 operating results. Automobile output rose 20.5% y-o-y to reach 18,700 units. Engine production increased 22.4% y-o-y. The truck maker's revenue under RAS climbed 28.5% to RUB 23.15 bn.
Sales growth of 22.4% in January-April is a fairly good result for KAMAZ and slightly higher than the 20.2% increase in truck sales in the same period 2007. In addition, we would like to draw attention to fiercer competition with imported products: the truck market soared 42% in 2007. The absence of customs barriers has capped the growth of the company's financial results, and its share on the domestic market has been heading south. By and large, a 28.5% rise in 1Q 2008 revenue matches market expectations. However, it fell short of our estimate of 30%. Meanwhile, it's noteworthy that this reading is not reflective of the Group's consolidated performance and only includes the company's manufacturing business.
According to our estimates, the fair price of KAMAZ is USD 7.46 per common share, which implies a 22.3% upside potential and has a BUY recommendation. Konstantin Romanov
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KAMAZ
Capitalization: $730 745 243,82
Common shares:
Price: $0,93
Delta week: -7,0%
Delta month: -44,1%
Delta year: -79,3%
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0.553
1.6
