OREANDA-NEWS. August 6, 2010. The city of Kyiv plans to buy 50 subway cars, Interfax reported yesterday, citing a press release from the Kyiv City Administration. The cars will be purchased from both Ukrainian and Russian manufacturers.

Concorde Capital: Kryukiv Wagon (UX: KVBZ UK), the only producer of subway cars in Ukraine, started production only year ago, thus it is logical that the city will not give the entire order to the Ukrainian manufacturer. We assume the order will be distributed 50/50 between Kryukiv and Russian producers, implying ~USD 25 mln to Kryukiv Wagon in revenue over 2010-11. Though we see this segment as capable of taking up to 20% of Kryukiv Wagon’s capacity in the long-term, this order is only about 5% of 2010E sales. We see the news as neutral for the stock.