During a telephone conference on Wednesday, the Nutritek group voiced plans to improve its financial indicators in the 2009-2011 financial years. According to Nutrinvestholding general director Oleg Ochinsky, the Nutritek group looks set to increase its revenue in the 2009 financial year to RUB 13.6 billion, of which 41% should be gained on sales in China and Asia. The target for EBITDA is around RUB 3.2 billion, which corresponds to an EBITDA margin of 23.4%. By focusing attention on baby food sales, the most profitable segment of the consumer sector, Nutritek aims to bring its EBITDA margin to 25.6% by FY 2011. In 2011, the company expects revenues of RUB 17.6 billion, of which 35% is to be earned in Asia. The company targets EBITDA in 2011 of RUB 4.5 billion.
We are moderately upbeat on the management's plans to improve company finances, including raising the EBITDA margin from 19.1% in the 2007 financial year to 25.6% by 2011. As part of its strategy to expand into Asian markets, the company is to launch baby food sales in Malaysia in late July 2008.
We estimate the fair price of Nutrinvestholding shares at USD 38.6 per share, which implies an upside potential of 33% to the current stock valuations.
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