OREANDA-NEWS. On August 12, 2009 AEB released operating statistics for passenger car and LCV sales in Russia for July 2009 and for 7M09. New car sales dropped 58% in July, and were down 50% for 7M09. AVTOVAZ  and Sollers continue to outperform the market, with YoY July declines of -42% and -47%, respectively, reported the press-centre of OTKRITIE FC.

View:  Despite worsening YoY dynamics, the MoM metric remains stable. This leads us to believe that the decline in sales has bottomed out. The market should begin its recovery when the portion of credit sales rises. The results are generally in line with market expectations and should therefore have a neutral effect on stock performance.

Valuation: Sollers’ EV/EBITDA 09E is 6.8x, trading at a 30% discount to peers.

Action: We reiterate our BUY rating for Sollers.