Antonov expands An-148 markets

State Antonov plans to sign an agreement to sell 78 of its An-148/158 aircrafts to Iran. The company is also currently working on certifying An-148/158 in the EU. Vitaly Gorovoy: attempts to expand An-148 market to Iran is positive for Motor Sich (UX: MSICH UK) which produces engines for this aircraft. We expect Motor Sich to generate USD 2.4 bln revenue from sales of these engines in 2011-20E with the Iran deal potentially increasing revenues even further. However, Motor Sich’ An-148/158 engines are not certified in the EU, thus Antonov could find new engine producers in case of successfully passing the EU certification which could hurt MSICH share price.