LuhanskTeplovoz Produced 4 Diesel Locomotives in January

February 07, 2012

LuhanskTeplovoz, Ukraine’s largest manufacturer of locomotives, produced 4 diesel locomotives for Russian Railways in January, the company’s press service reported to Interfax yesterday (Feb 6). According to Sergey Mikheev, the company’s CEO, LuhanskTeplovoz is now ﬁ nishing production of two diesel locomotives for UkrZaliznytsa left over from last year’s order. He said the company is also working on its ﬁ rst diesel locomotive equipped by General Electric-built propulsion.

COMMENTARY

LuhanskTeplovoz targets to increase its production by 50% YoY to 152 diesel locomotives in 2012. We believe that the company will reach this production guidance manufacturing around 14 diesel locomotives per month. The output in January was only 4 locomotives, however. But the company explains that it produced large amount of deliverable and spare parts in this month, compensating in its production plan for the low output of locomotives. Our target price of USD 0.64 suggests a potential upside of 121% to the LTPL stock’s current price.

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