Machinery
June 14, 2012
Following the recent steep slide in Ukrainian blue chips, Motor Sich is now trading at multiples of just 1.7x for 2012E EV/EBITDA and 2.2x for 2012E P/E, leaving ample space for medium¬term price appreciation. The company boasts the strongest fundamentals in Ukraine’s equity universe thanks to its established position on the Russian aircraft engine market and a 10¬year exemption from Ukrainian income tax. Motor Sich lists firm orders totaling USD 5.3bn over the next 5 years, and with year¬on¬year revenue and profitability both having risen impressively in 1Q12, we are revising our 2012¬2016 earnings forecasts for the company upward. We reiterate our BUY recommendation for the MSICH stock with a target price of USD 644 per share.
