We update our OGK
models to reflect electricity price trends and results in 1H 2012.
Investors are able to effectively buy into InterRAO shares via OGK-1 and OGK-3 (by holding the OGKs' shares through conversion) at 6-9% discounts to InterRAO's current market price.
InterRAO is going to float new equity for up to 9.6% of its current charter capital in order to facilitate the conversion of the OGKs' minorities and Bashkirenergo's generation assets into InterRAO.
InterRAO and the respective OGKs will hold EGMs to approve the merger.
Mosenergo is the best and most liquid asset among TGKs and outclasses most OGKs by installed capacity and fuel efficiency.
Current discounts of 62% by EV/EBITDA and 37% by EV/Capacity compared with the OGK average are unjustified, in our view, despite heavy involvement in regulated heat business.
Net cash position lowers multiples, but DCF valuation shows growth potential comparable with other OGKs. We recommend shares of OGK-3 as a BUY with target price of $0.068.
Shares of OGK-3 are traded with very low multiples (EV/Capacity'11 is just $17/kW against about $200/kW for other OGKs), as an effect of large net cash position, but DCF valuation shows growth potential comparable with other OGKs.
OGK-1 is one of the most efficient OGKs
in terms of fuel efficiency.
Enel OGK-5 has only a 5% free float, which is the lowest among OGKs
. This poses a liquidity concern for some investors.
OGK-6's TPPs operate at 365goe/kWh, which is inefficient, being 9% above the average for OGKs
. This should limit any benefits from market liberalization.
The disclosed figures confirm the general trend that the most fuel-efficient generation companies (OGK-6 is generally considered the most inefficient among OGKs
) will benefit the