Nov. 29, 2010 - Kaolin is the regional leader in the production of industrial minerals. The company is the number one producer in Eastern Europe of silica sands and kaolin and the second largest producer of shamotte. The company exploits 34 deposits and 10 plants for processing of industrial materials. The deposits and facilities are situated in Bulgaria, Serbia, Romania and Ukraine. Most of the company's activities, however, are concentrated in Bulgaria.
Kaolin give HOLD recommendation due to the prospects for growth on foreign markets. Moreover, the price per share fell significantly during the last year and the negative news could already be in consideration by investors.
The company still need to see the initial reaction of a possible financial loss for 2010 but it should be limited. Domestic macro risks are sizable but are lower than year ago as many industries are recovering. Our one-year price target is BGN 6.58. This is the average from the two valuation methods and is a realistic approach to the fair value of the stock as the price remains under pressure and under the risks of additional decline.
Kaolin give HOLD recommendation due to the prospects for growth on foreign markets. Moreover, the price per share fell significantly during the last year and the negative news could already be in consideration by investors.
The company still need to see the initial reaction of a possible financial loss for 2010 but it should be limited. Domestic macro risks are sizable but are lower than year ago as many industries are recovering. Our one-year price target is BGN 6.58. This is the average from the two valuation methods and is a realistic approach to the fair value of the stock as the price remains under pressure and under the risks of additional decline.
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