Luhanskteplovoz delivers 40 diesel locomotive sections to Mongolia

Luhanskteplovoz (UX: LTPL UK) completed the delivery of 40 out of 60 diesel locomotive sections to Ulan-Bator Railway, the company reported in a press release yesterday, with the remaining share to be delivered within the next  several months. Vitaly Gorovoy: This order accounts for 60% of Luhanskteplovoz’ diesel locomotive production plans for 2011 and is valued at USD 113 mln (of which USD 98 mln should go to the 2011 top line). We note the high production pace by the company: achieving a third of our estimate of its annual production plan within the first quarter. We will continue to monitor Luhanskteplovoz’ output; the 1Q pace could imply that the manufacturer could beat our full year production forecast of 100 diesel locomotives in 2011. We project Luhanskteplovoz’ top line in 2011 at USD 190 mln, up 76% y-o-y.  As this order was announced in November 2010, we believe it is already priced in by the market.