Cabinet’s 2011 budget draft envisages UAH 5 bln in support for state coal mines

The 2011 state budget draft, submitted on Friday to parliament, envisages UAH 5 bln (up from UAH 1 bln in 2010) in support for state-owned coal mines. Yegor Samusenko: We view this news as positive for Druzhkivka Machinery (UX: DRMZ UK), the biggest domestic producer of coal machinery. The company boosted its sales by 2.5x y-o-y in 9M10 and should benefit from a further increase in CapEx by state coal mines. The company is debt-free and is trading at 1.4 EV/EBITDA 10E (0.2 EV/S 10E), though the stock is illiquid.