Machinery
November 17, 2011
Motor Sich recently signed five-year contracts confirming orders from Russia’s state-owned “Russian Helicopters” for 1,300 helicopter engines, as well as for 250 engines for China’s defense ministry. However, we believe that the business stipulated by the new Russian agreement would have been done even without the contract, although probably under shorter term arrangements. We therefore leave our financial forecasts for Motor Sich unchanged, while lowering our target price for the MSICH stock to USD 616 per share (from USD 775) as a reflection of the deterioration in the market environment. Our new TP implies an upside of 104% and a BUY rating.
