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Since the very beginning of equity trading in Ukraine Sokrat has built a strong research team of professional and experienced analysts who provide insightful, objective and action-oriented information for financial professionals and self-directed investors, so that they may make informed investment decisions.
Sokrat Research includes coverage of both equity research on particular companies, as well as on strategic macroeconomic and political issues in Ukraine and the CIS.
Research
Machinery
March 3, 2010Zaporizhtransformator – high voltage upside Zaporizhtransformator is the CIS leader and one of the global leaders in the sphere of transformer manufacturing, supplying its products to 83 countries. Near 80% of all power transformers in operation in the CIS are made by ZATR. Given such a high level of penetration and the CIS countries’ strong need to invest in electricity infrastructure, coupled with the Company’s impressive margins and huge discounts at which ZATR shares are trading, we see its stock as a unique opportunity for investors.
Strategy
March 1, 2010Ukrainian Eurobonds Weekly (February 19 – 25, 2010) Last week, Ukrainian CDS quotations declined by 51.8 b.p. from 980.2 b.p. to 928.4 b.p. The main influence on investors’ attitudes to Ukrainian risks was news from the political arena, including the new President’s inauguration (held February 25) and a decline in investors’ apprehension about further political destabilization in Ukraine.
Machinery
February 26, 2010Turboatom – generating valueTurboatom, one of a few state-owned high-margin enterprises, is the largest CIS producer of turbines for all main types of power plants. The Company’s capacities enable the production of 8 GW of steam power turbines and 2.1 GW of hydro turbines per year. The Company has delivered more than 900 turbines with a total power of nearly 150 GW to more than 35 countries and it occupies the fourth place in the world in terms of turbines installed at nuclear power plants.
Strategy
February 22, 2010Ukrainian Eurobonds Weekly (February 12 – 18) Last week, Ukrainian CDS quotations declined by 1.7 b.p. from 980.8 b.p. to 979.1 b.p. Investors’ apprehension about further political destabilization in Ukraine after the second ballot of the presidential election has begun to decline. In our view, this should result in a lowering of Ukrainian CDS again next week.
Agriculture
February 22, 2010Creativ – on the wings of success The Creativ Group is the most dynamic agricultural holding in Ukraine and a leading manufacturer of oils and fats. The Company’s sales have shown an impressive growth of 63% CAGR for the last three years and are expected to grow 44% in 2010. Such an improvement is due to a three-fold increase in production capacities in 2H2009. The growing sales, increasing margins and Company’s fit financials – all indicate that Creativ is an attractive investment target. We issue a BUY recommendation with a target price of USD 26.2 per DR.
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Daily monitor
Machinery
March 10, 2010Sumy Frunze delivers USD 9.3 order to Surgutneftegaz Sumy Frunze Machine Building [SMASH UZ, U/R], the leading CIS manufacturer of machinery equipment for the oil and gas industry, has successfully delivered three gas turbine blocks to the Russian-based Surgutneftegaz. The equipment is designed for one of the client’s power plants and has an aggregate power of 36 MW. The purpose of the equipment is to utilize the associated gas for producing electricity (earlier, Surgutneftegaz burned associated gas in flares.
Agriculture
March 10, 2010Ukrros to post minor profit for 2009: POSITIVE The Ukrros Sugar Union [UROS UZ, BUY], a major agro-holding with a focus on sugar production, finished 2009 with a net profit of USD 0.02 mln, compared to a net loss of USD 18.6 mln in 2008. In 2009, the assets of the Holding increased by 17.6% to UAH 549.6 mln. The financial results of the Group are to be approved during its AGM on April 23, 2010.
Metals and Mining
March 9, 2010Vale iron ore price to grow 80%:POSITIVE for Ukraine GOKs
The Brazilian iron ore giant Vale may increase its domestic price for iron ore by 80%. This increase may consist of two stages: a 40% hike in March and another 40% in April to soften the impace of the input price for Brazilian steelmakers.
Machinery
March 9, 2010Court blocks Turboatom’s dividends payment The Economic Court of the Kharkiv Region has fully satisfied the claim of one of Turboatom’s minority’s shareholders (Svarog Asset Management), which declared the decision taken by TATM shareholders at its AGM (held on February 4, 2010) to be invalid. In particular, as a result of this decision, the dividends payment that was adopted at the AGM was blocked (the shareholders had decided to pay out UAH 44.1 mln in dividends).
Machinery
March 9, 2010KRAZ output down 99.1%, ZAZ up 194% AvtoKrAZ [KRAZ UZ, N/R], a Ukrainian producer of heavy trucks, has reported a decline in February production by 99.1% MoM (the Company produced only one car). At the same time, ZAZ, a leading Ukrainian auto manufacturer, reported a rise in production by 194% MoM, as the Company produced 770 cars in February vs. 262 in January.
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