Daily analyst comments
MRSK Center unveils optimistic plans
07.04.10 10:44
If MRSK Center management succeeds in meeting the targets that have been set, the company should see its financial efficiency grow dramatically. We link the company’s optimistic plans primarily to the conversion of a large part of its branches to a RAB tariff system.
At a meeting on April 2, the MRSK Center BoD gave a nod of approval to the company’s business plan for 2010. The plan calls for the company to boost the return on equity from 3.14% to 8.78% and cut losses 1% to 9.2%. Revenue is targeted at RUB 58.4 billion, up 19 % year-on-year. Net income is projected at RUB 3.6 billion, a 173 % boost over 2009.
We are upbeat on the targets set. If management delivers on its targets, the company may see its financial efficiency grow substantially and its net income is to reach tangible dimensions. Net margin is forecast to widen from 2.6% to 6.2%. We link the company’s optimistic plans first and foremost to the conversion of a significant part (about 40%) of its branches to RAB tariffs, as the new tariff system is conducive for business effectiveness growth. We believe that the targets announced by management will push up investor demand for MRSK Center shares.