Electricity Generation and Distribution
October 21, 2011
CentrEnergo’s financial results for 3Q11 are expected to be released next week. We forecast that the company will report a seasonally-unadjusted 8% QoQ rise in its top line to UAH 1.8bn, EBITDA of UAH 210mn, and net profit of UAH 144mn for the period. Although expectations for FY11 net profit remain modest, we believe that the CEEN stock is currently heavily oversold, in light of the electricity industry’s positive long-term profitability prospects as well as the government’s promise to privatize CentrEnergo by 2014. We leave our target price for CEEN unchanged at UAH 20.8 (USD 2.6) per share, implying an upside of 205% to the current price of UAH 6.8 (USD 0.85) per share.
