Westa downgrades 2011 sales outlook

Westa ISIC (WES PW), CIS leading battery producer, reported a 18% y-o-y increase in battery sales (to 3.9 mln conventional units) and 23% y-o-y increase in battery output (to 4.15 mln conventional units) in 10M11. In October alone, the company saw a m-o-m and y-o-y decline in both sales and output. In a separate release, Westa downgraded its sales outlook for 2011. The company now expects to sell 5.19 mln conventional batteries (+20% y-o-y) and raise its revenue 28% y-o-y to USD 197 mln. This implies a 20% cut to its previous plan for supplies and 26% decrease in battery sales target for 2011. Alexander Paraschiy: The reduced targets seem to already be priced in by the market: the stock has lost 46% since its IPO in May 2011. Accounting for its revised top-line, we estimate the company’s EV/EBITDA for 2011 at 6.8x, which is in line with its key peer: Turkish Mutlu (MUTLU TI).