MMK confirmed at BUY, TP USD 16.3 - Low resource base allows gain from falling iron ore prices
- MMK should be least affected by new taxes amid lower self-sufficiency in raw materials vs peers- The company should also be the main beneficiary of the observed drop in iron ore prices
- MMK is estimated to bring a DY of 20% per year on average for 2021-23e
- The stock is trading with an unjustifiably high discount to Russian peers on 2022e EV/EBITDA (37%)
Magnitogorskiy Metallurgicheskiy Kombinat PAO, formerly Magnitogorskiy metallurgicheskiy kombinat OAO, is a Russia-based company, active in the steel industry. Its main products are sinter, coke, iron, crude steel, rolled products and ore materials. The Company offers a wide range of products such as wire rod, rebars, square bars, strips, round bars, among others. It is also involved in the coal ore mining, processing of ore materials, sale of ferrous metal products and others. Magnitogorskiy metallurgicheskiy kombinat OAO operates as a supplier for such industries as: pipelines, vehicles, railway, construction and shipbuilding, among others. Its subsidiaries include Lys'venskaya Metallurgicheskaya Kompaniya OOO, among others. The Company operates domestically, as well as exports its products to the Commonwealth of Independent States (CIS) countries, Asia, the Middle East and Europe.
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