Agriculture Rusgrain: Coming together nicely Ivan Nikolaev Senior Analyst +7495 777 66 77 (ext.2646) [email protected] ATONLINE LIMITED does business and seeks to do business with companies covered in its research reports. Investors should consider this report as only one factor in their investment decision. Please see the Disclosures Appendix for all important disclosures.
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AgricultureRusgrain: Coming together nicely
Ivan Nikolaev Senior Analyst
+7495 777 66 77 (ext.2646)[email protected]
ATONLINE LIMITED does business and seeks to do business with companies covered in its research reports. Investors should consider this report as only one factor in their investment decision. Please see the Disclosures Appendix for all important disclosures.
RUSGRAIN: OVERVIEW
ATON July 2010
2
Vertical integration: The company produces, processes and trades grain. It also stores it at its own elevatorsRusgrain is buying out profitable poultry and eggs producer Agrosoyuz. The deal started in mid 2009, is financed through additional share issue of Rusgrain, and is expected to be finalized in early 3Q 2010Optimal harvest yield/costs per ha ratio: The company’s grain production cost per tonne of RUB3,400 is below the current grain price (RUB3,500-5,000 depending on the grain grade mix)The stock is trading with huge discounts to EM peers and sharply underperformed its Russian peersThe Russian government’s initiatives to substitute food imports with local production drive domestic agricultural output and pricesWe forecast earnings to turn positive in 2010 and grow by 60% in 2011 on the back of merger with AgrosoyuzThe stock is trading 80% below its historic high, when the company was half the size it is now
High debt: We estimate the 2010E gross debt/EBITDA ratio at 3.6x, however, high leverage is usual for agricultural companies Low stock liquidity
2011E P/E ratios
5.46.1
7.48.38.48.79.09.3
9.910.4
11.812.512.7
13.313.8
16.021.6
0 5 10 15 20 25
Rusgrain post mergerMHP
CherkizovoBungeGFPT
GrainCorpRainbow Chicken
Archer-Daniels-MidlandPoultry peers average
AndersonsUniversal Robina Corp
Grain peers averageCharoen Pokphand Foods
KWSKFC Holdings Malaysia
BEFRazgulay
Bull points
Bear points
VALUATION
ATON July 2010
3
Current MktCap: $107mnFair equity value after M&A: $200mn 2011E
Our fair value is based on a six-year DCF model with a 3% terminal growth rate and a 14.5% WACC
Rusgrain’s land bank alone is worth $30mn on our estimates (not included in our valuation)
Company is trading on just 5.4x 2011E P/E multiple on consolidated basis
MktCap EVCompany name Ticker $mn $mn 2010E 2011E 2012E 2010E 2011E 2012E 2010E 2011E 2012ERusgrain post merger RUGR RU 107 191 9.2 5.4 3.9 7.2 4.8 4.1 0.9 0.6 0.6Rusgrain (pro-forma) RUGR RU 107 191 6.7 5.4 3.9 5.5 4.8 4.1 0.7 0.5 0.6Grain peersBEF BEFSDB SS 402 394 neg 16.0 11.9 neg 8.6 7.4 3.3 2.6 2.2Razgulay GRAZ RU 206 1,024 neg 21.6 6.5 7.4 6.7 6.2 0.9 0.9 0.9Andersons ANDE US 608 758 11.2 10.4 na 5.6 5.8 na 0.2 0.2 naArcher-Daniels-Midland ADM US 17,124 20,923 9.2 9.3 8.0 6.3 6.1 6.6 0.3 0.3 0.3Bunge BG US 7,733 9,357 9.3 8.3 na 5.4 5.2 na 0.2 0.2 naGrainCorp GNC AU 978 1,164 12.5 8.7 8.2 6.5 5.0 4.8 0.7 0.6 0.5KWS KWS GR 1,009 921 15.5 13.3 12.0 7.0 6.2 6.0 1.0 0.9 0.9SLC Agricola SLCE3 BZ 782 993 nm nm 16.7 16.5 9.0 7.2 2.9 2.2 1.9Grain peers average 11.6 12.5 10.5 7.8 6.6 6.4 1.2 1.0 1.1Poultry peersMHP MHPC LI 1,503 1,819 7.0 6.1 5.8 5.6 5.1 4.7 2.0 1.8 1.7Cherkizovo CHE LI 1,197 1,628 8.7 7.4 6.5 8.0 7.1 6.3 1.3 1.1 1.0Charoen Pokphand Foods CPF TB 4,992 5,960 13.1 12.7 11.9 9.6 9.1 8.8 1.1 1.0 0.9GFPT GFPT TB 375 450 10.0 8.4 7.9 7.1 6.3 5.9 1.1 1.0 1.0KFC Holdings Malaysia KFC MK 689 659 15.1 13.8 11.9 7.4 6.9 6.0 0.9 0.8 0.8Rainbow Chicken RBW SJ 727 na 10.0 9.0 na na na na na na naUniversal Robina Corp URC PM 1,430 1,480 12.1 11.8 10.9 6.7 6.2 6.1 1.2 1.2 1.1Poultry peers average 10.9 9.9 9.1 7.4 6.8 6.3 1.3 1.1 1.1
EV/SalesP/E EV/EBITDA
Note: Rusgrain post merger consolidates AGS financials starting from 2H 2010
COMPANY SNAPSHOT
ATON July 2010
4
Six agricultural companies
acquired. Total land bank
reached 50,000 ha
2003 2004 2005 2006 2007 2008 2009
Cereals processing plant with36,000 tonnes capacity, twoelevators and an agricultural
company with 5,000 ha offertile land acquired
Flour production plant acquired
Fodderproduction plant
acquired
Grain company (elevator,fodder production and
mill)acquired
Merger with poultry and eggs
producer Agrosoyuz
Shareholder structure Business structure
Crop production
OJSC Rusgrain
Processing and storage
Rusgrain Ltd.
Milk production
Seeds productionTradingFounders
73%
Free float27%
Rusgrain’s acquisition history
FORECASTS: RUSGRAIN STAND-ALONE
ATON July 2010
5
Rusgrain revenue breakdown ($mn)
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
2007
2008
2009
2010E
2011E
2012E
2013E
2014E
2015E
Winter wheat
Summer wheat
Sunflower
020406080
100120140160180200
2007 2008 2009E 2010E 2011E 2012E 2013E 2014E
Elevators
Trading
Processing
Crops prodution
Prices assumptions (RUB/tonne) Rusgrain gross profitability outlook
Rusgrain drivers Increasing domestic meat and milk production drive grain consumptionWide-reaching government support for domestic agricultureMoves to substitute food imports with domestic production drive Russian output and prices
Rusgrain risks Grain price volatility means margins volatility Fertiliser price volatility may negatively affect company’s marginsRussian economy growth is a mixed blessing. Growing purchasing power of the population means higher salaries
22% 21%17%
25% 26% 25% 24% 23% 22%
0%
5%
10%
15%
20%
25%
30%
2007
2008
2009E
2010E
2011E
2012E
2013E
2014E
2015E
FORECASTS: AGROSOYUZ (AGS)
ATON July 2010
6
AGS revenue breakdown ($mn)
0
50
100
150
200
250
2008 2009 2010E 2011E 2012E 2013E 2014E 2015E
Other Chicken eggs Processed poultry Poultry
0
20
40
60
80
100
120
140
2008 2009 2010E 2011E 2012E 2013E 2014E 2015E
Raw materials Fodder costs Utilities Gas Heat
AGS costs breakdown ($mn)
AGS drivers Russian poultry prices likely to rise as a result of the government’s intention to up domestic output to 90-95% of food consumed from 60-70% currentlyMeat imports as % of meat consumption in Russia have fallen over the last seven years from 38% to 30%. 0% tax rate on agricultural production due to be in force until2013 Availability of subsidised loans (eight years, low interest) Low capex needs
AGS risksGrain price volatility may negatively affect AGS marginsCurrency risk. Rouble fluctuations may seriously affect local grain pricesRussian economy growth is a mixed blessing. Growing purchasing power of the population means higher salaries
AGS gross profitability
25%18%
22%27%
31% 33% 37%
0%
5%
10%
15%
20%
25%
30%
35%
40%
2009E 2010E 2011E 2012E 2013E 2014E 2015E
FORECASTS: COMBINED COMPANY
ATON July 2010
7
Consolidated revenue breakdown ($mn)
050
100150200250300350400450
2007
2008
2009
E
2010
E
2011
E
2012
E
2013
E
2014
E
2015
E
Agrosoyuz
Trading and storage
Processing
Crops prodution
-2.0%
4.1%6.5%
8.4% 9.5% 10.9%12.4%
6.8%4.5% 3.4%
11.1% 12.3%13.7% 15.2% 16.9% 18.1%
-10.9%-8.8%
-15%
-10%
-5%
0%
5%
10%
15%
20%
2005 2006 2007 2008 2009E 2010E 2011E 2012E 2013E
Net EBITDA
7.0
11.2
29.3
3.4 2.1 1.3 0.8 0.40
5
10
15
20
25
30
35
2007 2008 2009E 2010E 2011E 2012E 2013E 2014E
Rusgrain’s gross profitability by division
Rusgrain consolidated profitabilityDebt/EBITDA ratio (x)
22% 21%
17%
0% 0% 0% 0% 0% 0%0% 0% 0%
23%24% 26% 27% 28% 30%
0%
5%
10%
15%
20%
25%
30%
35%
2007 2008 2009E 2010E 2011E 2012E 2013E 2014E 2015E
RUGR stand-alone AGS stand-alone Consolidated companyNote: Rusgrain assumed to consolidate AGS financials starting from 2H 2010
COSTS
ATON July 2010
8
Grain production costs structure (2010E)
Seeds11%
Chemicals9%
Fertilizers14%
Salaries21%
Fuel10%
Maintenance6%
Equipment rent12%
Elevator services16%
Utilities1%
0
2,000
4,000
6,000
8,000
10,000
12,000
2008 2009E 2010E 2011E 2012E 2013E 2014E 2015E
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
Costs/ha, RUB (LHS) Costs/tonne, RUB, (LHS) Harvest yiled, t/ha (RHS)
0
20
40
60
80
100
120
2008 2009 2010E 2011E 2012E 2013E 2014E 2015E
Costs per 1 kilo of poultry Price per 1 kilo of poultry
Grain production costs vs harvest yield
Poultry production costs and prices, RUB/kilo
Raw materi als89%
Uti l i ties6%
Gas3%
Heat2%
AGS costs structure (2010E)
AGRICULTURAL MARKET: DRIVERS AND RISKS
ATON July 2010
9
Drivers Expanding meat consumption in Russia Increasing import duties and reduced quotas should drive domestic meat and grain production Government plans to boost domestic milk production should support grain consumption and in turn grain prices
Risks Currency risk. Rouble fluctuations may seriously affect local grain prices. Uncertainty regarding global grain supply. Current global grain price is below cropping costs in developed countries. On one hand this may put pressure on global grain production driving grain prices. On the other hand, this may push governments to implement more protectionists and stimulating measures for farmers.
2.2 2.4 2.6 2.7 2.7 2.8 2.9 3.0 3.1 3.2
2.5 2.6 2.7 2.7 2.8 2.8 2.9 2.9 3.0
2.4 2.3 2.4 2.5 2.6 2.8
2.7
2.9
2.42.42.5
0
2
4
6
8
10
2005
2006
2007
2008
2009
E
2010
E
2011
E
2012
E
2013
E
2014
E
0
10
20
30
40
50
Poultry PorkBeef Value (RHS)
$bnmn tonnes
4
53 55 61 6574
86
666356
73
0
10
20
30
40
50
60
70
80
90
Indi
a
UK
Fran
ce
Russ
ia 2
008
Ger
man
y
Russ
ia 2
013E
BRC
aver
age
Chin
a
Braz
il
USA
Biological norm for Russian climate = 200 g per day
75
5545 50 52 54 56
66
0
10
20
30
40
50
60
70
80
1990
1995
2000
2005
2006
2007
2008
2014
E
Meat imports as % of consumption
Russian meat market breakdown (mn tonnes) Meat consumption per capita (kg pa) Meat consumption per capita (kg pa)
42% 41% 40% 41% 40%36%
31%27% 25%
0%
10%
20%
30%
40%
50%
2005
2006
2007
2008
2009
E
2010
E
2011
E
2012
E
2013
E
INDUSTRY SNAPSHOT
ATON July 2010
10
Russian agricultural land (mn ha)
Tractors per 1000 cropped hectares
Russian grain harvest (mn tonnes)
0
20
40
60
80
100
120
140
1992
1995
2000
2003
2004
2005
2006
2007
2008
2009
E
2010
E
2011
E
2012
E
2013
E
2014
E
Cultivated land land, mn ha Idle land, mn ha
0
20
40
60
80
100
120
140
1992
1995
2000
2003
2004
2005
2006
2007
2008
2009
E
2010
E
2011
E
2012
E
2013
E
2014
E
0
100
200
300
400
500
600
2005
2006
2007
2008
2009
E
2010
E
2011
E
2012
E
2013
E
2014
E
2015
E
NPK* domestic price outlook ($/t)
Russian grain harvest yield (mn tonnes)
0.0
0.5
1.0
1.5
2.0
2.5
3.0
1992
1995
2000
2003
2004
2005
2006
2007
2008
2009
E
2010
E
2011
E
2012
E
2013
E
2014
E
0
2
4
6
8
10
1219
9019
9119
9219
9319
9419
9519
9619
9819
9920
0020
0120
0220
0320
0420
0520
0620
0720
08
0
2
4
6
8
10
12
1990
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
Mineral fertilisers usage (mn tonnes)
*NPK = Nitrogen, Phosphor, Potash
GOVERNMENT SUPPORT
ATON July 2010
11
The government subsidises domestic agricultural companies interest payments on non-public debt. The government compensates interest payments up to the current refinancing rate (8.50% currently), e.g. if company borrows $100mn at a 10% interest rate, its annual interest payments will amount to $1.5mn 0% income tax rate planned to be in effect until 2013 Import duties and quotas on meat, milk and sugar support local prices and stimulate investment activity in the domestic agricultural sector The government has intervened to prop up grain prices at various points since 2003 Leasing programme aimed to facilitate replacement of outmoded agricultural machinery. Rosagroleasing (government institution which provides equipment to agricultural producers) has introduced 7 to 15 year leasing programmes for livestock and agricultural equipment at a 2% lease rate with 7% upfront payment, i.e. spreading investments into grain, meat and milk production over 7 to 15 years
Russian meat imports quotas and duties
000 tonnes In-quota tariff Above quota tariffBeef 560 15% 50%, min EUR 0.1/kgPork 472 25% 75%, min EUR 1.5/kgPoultry 780 20% 80%, min EUR0.7/kg
FORECASTS: INCOME STATEMENT, $mn
ATON July 2010
12
2005 2006 2007 2008 2009E 2010E 2011E 2012E 2013E 2014E 2015ERevenue 46.0 54.7 88.0 99.8 101.5 210.7 303.8 321.5 339.4 358.7 377.8CoGS -36 -42 -70 -85 -91 -161 -229 -237 -245 -255 -263Gain (loss) from change in value of bio assets 0 0 1 6 4 -1 -1 -1 -1 -1 -1Gross profit 10 13 19 21 15 48 74 84 94 103 114SG&A -8 -10 -15 -20 -14 -30 -43 -45 -48 -50 -53Invemtiry losses -1 0 0 0 0 0 0 0 0 0 0Negative goodwil l 0 0 0 0 0 0 0 0 0 0 0Impairment of PPE 0 0 0 0 0 0 0 0 0 0 0Bad debt expense and change in provisions 0 -1 0 0 0 0 0 0 0 0 0Other expense, net 0 -1 -1 -2 0 0 0 0 0 0 0EBIT 1 0 4 -1 1 19 32 39 46 53 61EBITDA 2 2 6 4 3 23 39 47 54 63 71Financial income 0 1 1 1 0 0 0 0 0 0 0Financial expense -2 -3 -6 -10 -10 -9 -9 -7 -5 -3 0PBT -1 -2 -1 -9 -9 10 23 32 41 50 61Income tax 0 0 -1 0 -0.4 -1 -3 -5 -8 -10 -12PAT -1 -2 -2 -9 -10 8 20 27 33 40 49Minority interest 0 0 0 0 0 0 0 0 0 0 0Net income -2 -2 -2 -9 -9.4 8 20 27 33 40 49MarginsGross 21.1% 23.2% 21.7% 21.1% 14.3% 22.9% 24.5% 26.0% 27.6% 28.8% 30.2%EBIT 1.5% 0.6% 4.0% -0.7% 0.5% 8.9% 10.5% 12.0% 13.6% 14.8% 16.2%EBITDA 3.3% 3.1% 6.8% 4.5% 2.9% 10.7% 13.0% 14.5% 16.0% 17.5% 18.8%Net neg neg -2.0% -8.8% -9.2% 3.8% 6.5% 8.4% 9.7% 11.1% 12.9%Growth ratesRevenue 18.8% 61.0% 13.4% 1.6% 107.7% 44.1% 5.8% 5.6% 5.7% 5.3%EBITDA 10.3% 257.3% -25.4% -34.9% 676% 75.1% 18.1% 16.7% 15.9% 12.8%Net income nm nm nm nm nm 142.3% 37.7% 21.7% 21.5% 22.3%Other ratiosEffective tax rate nm nm nm nm nm 15% 15% 15% 20% 20% 20%Effective interest rate 10.8% 7.6% 14.4% 19.4% 13.0% 10.0% 10.0% 10.0% 10.0% 10.0% 10.0%SG&A as % of revenue 17.9% 18.6% 17.0% 17.0% 17.0% 14.0% 14.0% 14.0% 14.0% 14.0% 14.0%
FORECASTS: BALANCE SHEET, $mn
ATON July 2010
13
2005 2006 2007 2008 2009E 2010E 2011E 2012E 2013E 2014E 2015EPPE 13 20 22 32 37 76 80 82 84 84 84Goodwil l 1 1 1 2 2 2 2 2 2 2 2Advances for land acquisition 0 0 0 7 0 0 0 0 0 0 0Other investments 0 0 6 9 9 9 9 9 9 9 9Deferred tax assets 0 0 0 0 0 0 0 0 0 0 0Total LT assets 14 21 28 50 48 87 91 93 95 95 95Cash and equivalents 1 0 0 1 16 5 17 22 36 58 78Receivables 2 3 7 12 13 23 29 31 33 34 36Other receivables 5 4 2 3 3 2 2 1 1 1 1Inventories 6 15 8 12 15 19 23 24 25 26 27Biological assets 0 2 3 4 4 4 4 4 4 4 4Other investments 2 4 4 2 2 2 2 2 2 2 2Prepayments for current assets 0 0 3 2 0 0 0 0 0 0 0Total current assets 16 29 27 36 51 54 77 84 100 124 147Total assets 30 50 55 86 99 141 168 177 195 219 242Share capital 1 1 1 1 1 1 1 1 1 1 1Additional paid-in capital 1 2 2 21 21 21 21 21 21 21 21Revaluation 0 0 0 0 0 0 0 0 0 1 2Retained earnings 6 3 2 -6 -15 -7 12 39 72 112 161Total equity attributable to shareholders 8 5 4 16 7 15 35 62 95 135 185Minority interest 1 1 1 4 0 0 0 0 0 0 0Total equity 9 6 5 20 7 15 35 62 95 135 185LT debt 4 1 4 3 18 28 28 18 0 0 0Finance lease l iabil ities 0 0 1 2 2 2 2 2 2 2 2Net assets attributable to minority participants in LLC subsidiaries0 1 0 0 0 0 0 0 0 1 2Deferred tax l iabil ities 1 1 1 2 2 3 5 5 5 6 6Total LT liabilities 5 4 6 6 21 33 34 25 8 9 10ST debt 14 38 38 47 57 65 60 50 50 30 0Finance lease l iabil ities 0 0 1 2 2 2 2 2 2 2 2Payables 4 2 4 10 11 24 34 36 38 40 43Tax provision 0 0 1 1 1 1 2 2 2 2 3Total ST liabilities 18 41 44 60 71 93 99 91 93 75 47Total liabilities 22 44 50 66 92 126 133 116 100 84 57Total equity and liabilities 31 51 55 86 99 141 168 177 195 219 242Gross debt 17.2 39.1 41.7 49.9 74.9 92.9 87.9 67.9 50.4 30.4 0.0Net debt 16.3 38.8 41.2 48.7 59.2 87.7 70.6 45.4 14.3 -27.6 -78.5Debt/Equity 1.9 6.1 7.8 2.5 10.7 6.1 2.5 1.1 0.53 0.22 0.00Debt/EBITDA 11.4 23.4 7.0 11.2 25.8 4.1 2.2 1.5 0.93 0.48 0.00RoE 11.9% 7.0% 75.9% -3.6% 12.5% 133.9% 101.7% 70.2% 57.4% 46.5% 39.5%RoCE 4.1% 1.0% 8.6% -1.0% 1.1% 18.7% 28.8% 33.4% 37.5% 37.9% 39.5%
FORECASTS: CASH FLOW, $mn
ATON July 2010
14
2005 2006 2007 2008 2009E 2010E 2011E 2012E 2013E 2014E 2015ENet income -1.6 -2.1 -1.8 -8.8 -9.4 8.1 19.6 27.0 32.8 39.9 48.8Depreciation & Amortization 0.8 1.4 2.4 5.1 3.9 3.7 7.6 8.0 8.2 10.0 10.0Other Items 10.4 11.9 1.1 1.7 6.6 -24.6 3.3 0.6 0.5 2.4 2.4(Increase)/Decrease In Net Working Capital -10.9 -22.3 4.6 -12.8 -2.5 -0.7 -1.3 -0.5 -0.4 -0.4 -0.4Cash Flow From Operations -1.3 -11.2 6.4 -14.8 -1.4 -13.5 29.2 35.1 41.2 51.9 60.8Capital Expenditures -0.5 -7.3 -8.1 -16.6 -8.5 -15.0 -12.0 -10.0 -10.0 -10.0 -10.0Free Cash Flow -3.4 -19.3 -1.7 -31.4 -9.9 -28.5 17.2 25.1 31.2 41.9 50.8Financing Cash Flow 3.0 18.8 0.5 32.8 25.0 18.0 -5.0 -20.0 -17.5 -20.0 -30.4Net Change In Cash -0.4 -0.5 -1.2 1.5 15.1 -10.5 12.2 5.1 13.7 21.9 20.4Cash, period beginning 1.3 1.0 0.3 -0.8 0.6 15.7 5.2 17.4 22.5 36.1 58.1Cash, period end 1.0 0.5 -0.8 0.6 15.7 5.2 17.4 22.5 36.1 58.1 78.5
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It is not intended to be a comprehensive summary of newsworthy financial or business events and it may not be relied upon as such. The information and views given herein are subject to change without notice to the recipients. ATON LLC and ATONLINE LIMITED may have a position and/or trade for their own accounts as odd-lot dealer, market maker, block positioner, specialist, liquidity maker and/or arbitrageur in any securities of issuers mentioned herein or in related investments and also may from time to time perform investment services or other services for, or solicit investment services or other business from, any entity mentioned herein.This material is not intended for access by retail investors outside of the Russian Federation. Any investment or investment activity to which this material relates is not available to retail clients and will be engaged in only with persons other than retail clients. The publication and distribution of this marketing material and other information about securities in some jurisdictions may be restricted by law. Unless otherwise stated, this material is intended only for persons who are eligible recipients of the material in the jurisdiction, in which the recipient of the material is located or belongs to. Disregarding these restrictions may be regarded as a law violation within corresponding jurisdictions of securities. This material is not intended for access in the United States of America (including dependentterritories and the District of Columbia), Australia, Canada and Japan.
Analyst certificationThis marketing material (“the material”) has been prepared by the analyst(s) of ATON LLC, whose name(s) appear(s) on the front page of the material. Each analyst certifies that with respect to the company and such securities and markets, all the views expressed in the material accurately reflect his or her personal views about the company and any and all of such securities and markets. Each analyst and/or persons connected with any analyst may have interacted with sales and trading personnel, or similar, for the purpose of gathering, synthesising and interpreting market information.Any ratings, forecasts, estimates, opinions or views in the material constitute a judgment as at the date of the material. If the date of the material is not current, the views and contents may not reflect the analysts’ current thinking. The material has been produced independently of the company and any ratings, forecasts, estimates and opinions reflect only the analyst’s personal view. While all reasonable care has been taken to ensure that the facts stated therein are accurate and that the forecasts, estimates, opinions and views contained therein are fair and reasonable, neither the analysts, the company, nor any of its directors, officers or employees, have verified the contents thereof unless disclosed otherwise below. Accordingly, neither the analysts, the company, nor any of its directors, officers or employees, shall be in any way responsible for the contents thereof, and no reliance should be placed on the accuracy, fairness or completeness of the information contained in the material.Neither the analysts, the company, nor any of its directors, officers or employees, accept any liability whatsoever for any loss howsoever arising from any use of the material or its contents or otherwise arising in connection therewith. Each analyst and/or persons connected with any of them may have acted upon or used the information herein contained, or the data or analysis on which it is based, before its publication. This material may not be relied upon by any of its recipients or any other person in making investment decisions with respect to the company’s securities. The material does not constitute a valuation of the company’s business, assets or securities for the purposes of the legislation on valuation activities for the company’s country.No part of his or her compensation was, or will be, directly or indirectly related to the specific ratings, forecasts, estimates, opinions or views in the material. Analysts’ compensation is determined based upon activities and services intended to benefit investor clients. Like all of ATON LLC employees, analysts receive compensation that is impacted by overall ATON LLC profitability, which includes revenues from other business units within ATON LLC.Each analyst or his or her affiliated company or other persons is or may be a member of underwriting group in a respect of proposed offering of the securities of the company. Each analyst may in the future participate in an offering of the company’s securities.
Investment ratings Investment ratings are a function of ATONLINE LIMITED expectation of total return on equity (forecast price appreciation and dividend yield within the next 12 months, unless stated otherwise in the material). The investment ratings may be determined by the following standard ranges: Buy (expected total return of 15% or more); Hold (expected total return of 0-15%); Sell (expected negative total return). Standard ranges do not always apply to emerging markets securities and ratings may be assigned on the basis of the analyst’s knowledge of the securities. Investment ratings are determined at the time of initiation of coverage of a company of equity securities, or a change in target price of any of the company’s equity securities. At other times, the expected total returns may fall outside of the range used at the time of setting a rating because of price movement and/or volatility. Such interim deviations will be permitted but will be subject to review by Research Department Management. It may be necessary to temporarily place the investment rating “Under Review” during which period the previously stated investment rating may no longer reflect the analysts’ current thinking. For companies where ATONLINE LIMITED has not expressed a commitment to provide continuous coverage, to keep you informed, analysts may prepare material covering significant events or background information without an investment rating. Your decision to buy or sell a security should be based upon your personal investment objectives and should be made only after evaluating the security’s expected performance and risk.
Disclaimer© 2010 ATONLINE LIMITED All rights reserved. Regulated by the Cyprus Securities and Exchange Commission (Licence No: CIF 104/09).
ATON July 2010
Special Situations & Small Caps Group
Iouli Matevossov
+7 (495) 777 6677 (ext. 2658)
Svetlana Kovalskaya
Mikhail Pak
Consumer Goods & Retail
Ivan Nikolaev
Translator
Elena Korzhenevskaya
+7 (495) 777 6677 (ext. 2678)
Head of Research
Phone +7(495) 777 6677
Alexei Yazikov
Tel.: +7 (495) 777 6677 (ext. 2640)
Lauren Mandy
ATON RESEARCH TEAM
Editorial
Head of Editorial and Production
+7 (495) 777 6677 (ext. 2641)
Editor
Anna Bogdanova
+7 (495) 777 6677 (ext. 2657)
Andrew Risk
Editor
+7 (495) 777 6677 (ext. 2648)
CY-1096 Nicosia, Cyprus
www.aton.ru tel.: +357 (22) 680015
Head of Trading
Denis Sarantsev
Aton OOO (LLC) Atonline Limited
Themistokli Dervi, 5, Elenion Building
Address Pokrovka str., 27, Bldg 6 Registered address:
Moscow, 105062, Russia
Phone +7 (495) 777 6677 2nd Floor, P.C. 2066, Nicosia, Cyprus
ATON <GO> (Bloomberg)
tel.: +7 (495) 777 8877 Office: 2 Vasileos Pavlou Street, Egli Building
fax: +7 (495) 777 8876 3rd Floor, Office 302,
www.aton-line.ru fax: +357 (22) 680016
RTS, MICEX, NAUFOR Member Regulated by Cyprus Securities & Exchange Commission
Head of Equity and Fixed Income Group
Phone +7 (495) 510 1653
Head of Sales
llya Veller
Phone +7 (495) 287 9287
Alexey Artemenko
[email protected]@Aton.Ru
Strategy & Economics
Slava Bunkov
Tel.: +7 (495) 777 6677 (ext. 2642)
Peter Westin
Chief Equity Strategist/Economist
+7 (495) 777 6677 (ext. 2656)
Inga Foksha
Utilities
Banks
+7 (495) 777 6677 (ext. 2644)
+7 (495) 777 6677 (ext. 2643)
Alexander Sivolobov
+7 (495) 777 6677 (ext. 2671)
Technical analysis
Vlad Nigmatullin
Ilya Koupreyev
7 (495) 777 6677 (ext. 2655)
Telecoms & Media
[email protected]@aton.ru
Oil & Gas
Elena Savchik
Tel.: +7 (495) 777 6677 (ext. 2673)
Stanislav Yudin
+7 (495) 777 6677
Irina Skvortsova
+7 (495) 777 6677 (ext. 2675)
+7 (495) 777 6677 (ext. 2646)
Nikita Melnikov
+7 (495) 777 6677 (ext. 2659)
+7 (495) 777 6677 (ext. 2647)
+7 (495) 777 6677 (ext. 2672)
Dinnur Galikhanov
+7 (495) 777 6677 (ext. 2677)
Metals & Mining
Pavel Shelekhov
Natalia Vigodina
+7 (495) 777 6677 (ext. 2645) [email protected]
Alexey Evstratenkov
+7 (495) 777 6677 (ext. 2649)
+7 (495) 777 6677 (ext. 2679)
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