NLMK initiated at BUY, TP RUB 35.5 - Strike while the iron is hot
- NLMK is a top Russian steel producer with 100% integration in iron ore and a wide geographical diversification of assets- The company should fully enjoy current favorable steel price environment thanks to one of the lowest unit cash costs in the global steel industry
- Export-oriented structure of NLMKs steel sales should protect the companys financials from harsh antitrust fines of FAS
- The stock provides attractive double-digit dividend yields of 17% for 2022e and 14% for 2023e
- NLMK also trades with discounts on 2022e EV/EBITDA to both its historic average level and Severstal
Novolipetsk Steel is a vertically integrated steel manufacturing and production group based in Russia. Co. specializes in the manufacturing of high-quality hot and cold rolled steel in a variety of grades and sizes. Co. is also engaged in production and sales of flat steel products including slabs, hot rolled and cold rolled sheet, electrical steel, galvanized steel, cold rolled sheet with polymeric coatings. In addition, Co.'s areas of manufacturing include sintering, coke production, blast furnace production, steel-making, hot and cold-rolled flat steel production, galvanized and prepainted steel production. Co. exports its products to 70 countries around the world.
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The Institutional Equity Research team consists of roughly 15 analysts, both in Vienna and the CEE countries. Our analysts provide long-standing sector expertise in tandem with profound local market know how and a sectoral approach across the entire region.
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