Yuzhno-Ural nickel plant OJSC : Nothing new to offer? Neutral outlook

Yuzhno-Ural nickel plant OJSC relative valuation is now NEUTRAL. It was previously rated UNDERVALUED, and has a fundamental analysis score of 25.

Our analysis is based on comparing Yuzhno-Ural nickel plant OJSC with the following peers – Electrozink OJSC, Public Joint Stock Company Mining & Metallurgical Company Norilsk Nickel, VSMPO-AVISMA Corp. and Gai Mining and processing plant PJSC (ELTZ-RU, GMKN-RU, VSMO-RU and GGOK-RU).

Relative Valuation

Yuzhno-Ural nickel plant OJSC is currently neutrally valued, as its previous close of RUB 4480 lies within the CapitalCube estimate range of RUB 4,422.33 to RUB 7,491.46. Over the last 52 week period, Yuzhno-Ural nickel plant OJSC has fluctuated between RUB 1530 and RUB 7555.

Relative Valuation

Company Overview

  • With respect to peers, relative outperformance over the last year is in contrast to the more recent underperformance.
  • It trades at a lower Price/Book multiple (0.27) than its peer median (0.75).
  • We classify UNKL-RU as Challenged because of its below median returns and the market’s relatively low growth expectations.
  • UNKL-RU‘s relatively low net margins and poor asset turns suggest a problematic operating strategy.
  • Compared with its chosen peers, the company’s annual revenues and earnings change at a slower rate, implying a lack of strategic focus and/or lack of execution success.
  • UNKL-RU‘s return on assets currently and over the past five years has trailed the peer median and suggests the company might be operationally challenged relative to its peers.
  • The company’s relatively high pre-tax margin suggests tight control on operating costs versus peers.
  • UNKL-RU‘s revenues have grown more slowly than the peer median over the last few years, which combined with the stock price’s relatively low P/E ratio suggests substandard growth expectations relative to peers.
  • The company’s capital investment program suggests it is under-investing in a business that is producing peer median returns.
  • UNKL-RU currently does not have any debt.

Investment Outlook

Yuzhno-Ural nickel plant OJSC has a fundamental score of 25 and has a relative valuation of NEUTRAL.

Yuzhno-Ural nickel plant OJSC lies at the bottom left quadrant of CapitalCube’s Value – Price Matrix. We call this space a Value Trap. At this level, Yuzhno-Ural nickel plant OJSC is potentially undervalued, since it trades lower than its CapitalCube Implied price of 5,956.89. However, its fundamental analysis score is also on the lower side at 25, begging the question whether the low price is on account of the weaker fundamentals.

Fundamentals Vs Relative Valuation

Quadrant label definitions. Hover to know more

Safety, Value Play, Value Trap, Speculative

Drivers of Valuation

UNKL-RU has a Challenged profile relative to peers.

We classify UNKL-RU as Challenged because of its below peer median returns (ROE of -0.64% compared to the peer median ROE of 21.32%) and the market’s low expectations of its growth (P/E of 2.73 compared to peer median of 8.12).

The company trades at a lower Price/Book multiple of 0.27 compared to its peer median of 0.75.

Valuation Drivers

Quadrant label definitions. Hover to know more

Outperforming, Harvesting, Challenged, Turnaround

Peer Analysis

A complete list of valuation metrics is available on the company page.

Company Profile

Yuzhno-Ural nickel plant OJSC engages in the production and sales of nickel-cobalt products. The company was founded on April 29, 1935 and is headquartered in Orsk, Russia.

Disclaimer

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