Sector: Engineering
Cooperation with the German Daimler AG company in the production of small- and medium-sized buses should enable the Neftekamsk automotive plant (NefAZ) to expand its model range, enter the fastest growing bus segment and raise product quality to European standards. As a result, the plant would be able to attract new clients and scale up its bus sales.
According to RBC Daily, Russian bus and dump truck maker NefAZ is in talks with the German Daimler AG company on setting up production of small- and medium-sized buses. At present, the automotive plant produces only large-capacity city buses.
In our opinion, cooperation with Daimler AG would enable NefAZ to broaden its model range, draw in new customers and scale up its bus sales. Medium-capacity buses are now in strong demand on the market and the respective market segment is growing at the fastest pace. Supply of mid-capacity buses currently falls short of demand in Russia, and only one Russian automaker, the GAZ group, is now present in this market segment. Furthermore, cooperation with Daimler AG would make it possible for NefAZ to raise its product quality to European standards, which would give the company an additional competitive advantage.
We estimate the fair value of one common share in NefAZ at USD 53, which implies an upside potential of 30.9% and corresponds to a BUY recommendation. Konstantin Romanov
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NefAZ
Capitalization: $128 622 336,00
Common shares:
Price: $16,00
Delta week: 0,00%
Delta month: 0,00%
Delta year: 0,00%
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0.569
0.073
