According to Vedomosti, Russian President Dmitry Medvedev on Thursday signed a decree on the state's contribution to Russian Technologies' capital. The details of the decree are not yet known. In all, the state plans to contribute shares in around 420 companies to the state corporation, including a 37.8% share package in KAMAZ. On Friday, Deputy Industry and Trade Minister, Denis Manturov, stated that an IPO for Kamaz would be held no earlier than late 2009 or early 2010.
We believe that change of ownership of the state share package will by no means affect the company's strategy and its operations, given that the state will actually retain its control of the state share package and only its nominal holder will change. The plan to postpone an IPO is bad news for the company, since holding it would arouse interest in the company and have positive effects on stock valuations.
We estimate the fair value of one common share in Kamaz at USD 6.7, which implies an upside potential of 26.2% and corresponds to a BUY recommendation.
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