OREANDA-NEWS. March 02, 2010. Helicopters of Russia published operating results for FY 2009, which we view as positive. However, different helicopter plants have shown mixed production dynamics. Output from KVZ increased by about 55% y-o-y, while Rostvertol saw helicopter production drop 66%. U-UAZ production has remained flat at 2008 levels. We presently view U-UAZ shares as the cheapest.

On March 1, Helicopters of Russia disclosed manufacturing results for FY 2009. The report says Russian helicopter production picked up 8.3% y-o-y to 183 helicopters. Ulan-Ude Aviation Plant (U-UAZ) specifically made 60 helicopters, Kazan Helicopter Plant (KVZ) another 85 and Rostvertol 15 more.

We are upbeat on the steady growth of helicopter sales reported by the company. However, production dynamics for various helicopter producers differ significantly. As our estimates show, among the three helicopter plants listed on Russian trading floors, the best results are those of KVZ. Output from this plant has increased by about 55% y-o-y. We view the results from U-UAZ as flat, as compared with 2008, while Rostvertol saw helicopter production drop 66%.

We single out U-UAZ shares, with a P/E 2010 ratio of 3.1, as presently the most attractive buy among the helicopter company shares listed on Russian stock exchanges. Our target price for U-UAZ is USD 2.12 per common share, with a 93% upside.