RUSAL - Pure and Competitive
Investors have recently been befuddled by an unexpected rise in aluminum stocks on the Shanghai Futures Exchange and have started to doubt the efficiency of capacity cuts in China, but we believe the resulting price weakness will prove temporary. China's commitment to curtail excess capacity to curb pollution, coupled with high cost inflation (stemming from rising carbon-based raw materials and alumina prices), should eventually provide the market with a fundamental floor above $2,100/tonne LME, in our view. RUSAL should face lower cost inflation than Chinese peers thanks to the availability of relatively cheap electricity in Russia and its high self-sufficiency in raw materials, which we expect to translate into margin expansion. We set a target price of HKD6.72 and BUY recommendation.United Company Rusal is a producer of aluminium and alloys. Co.'s production chain include bauxite and nepheline ore mines, alumina refineries, aluminium smelters and casting houses, foil mills and packaging production centres. Co. operates in four reportable segments: Aluminium, which is involved in the production and sale of primary aluminium; Alumina, which involved in the mining and refining of bauxite into alumina and the sale of alumina; Energy, which include the mining and sale of coal and the generation and transmission of electricity; Mining and Metals, which includes the equity investment in Co.'s joint venture, PJSC MMC Norilsk Nickel.
Sberbank CIB Investment Research is a research firm offering equity, fixed income, economics, and strategy research. It covers analysis on all aspects of Russia’s capital markets, issues and industries. The firm analyzes trends in Russia and combines local knowledge with a global perspective. It processes macroeconomic data, market and company-specific news, stock quotes and other information for providing research reports. The firm provides details and latest prices on the most traded names and most traded paper on all segments Russian market. In strategy research, it provides thematic research, tips and descriptions of the methodology used to evaluate companies.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.