Kharkiv Tractor’s Output up 15% yoy in 2007

According to Ukrainian News, Kharkiv Tractor (HTZD: N/R) increased production 15% yoy to 2,300 tractors in 2007. In 2008 the company plans to increase output by 78% yoy to 4,100 tractors. Inna Perepelytsya: We relate the company’s impressive production plans for 2008 to the arrival of a new owner. According to Ukrainian mass media, Ukrsib Group had sold their 62% stake to Russian automotive group GAZ. An official statement regarding a change in ownership has not been made. The agenda for tomorrow’s AGM includes an approval of a 46-fold charter fund increase, which could be connected to the new owner wanting to increase their stake in the company. The market appears to have already reacted to information that GAZ has stepped in, the stock has made 160% since September. We expect that GAZ could be waiting until after the charter fund increase to make an official announcement and provide their vision for improving the company’s financials (has posted losses since 2002), which could be a catalyst for the stock.