Gearbox development firm Antonov bucked the downward trend on the stock market with a 20% rise to 113.5p on Friday. Heavy buying of Antonov shares followed an upbeat report from new house broker Credit Lyonnais Securities.
The broker said the company was valued at only a fifth of its nearest competitor, adding that there was no justification for this with good news in the pipeline.
The company’s automatic transmission system is still under development but Antonov expects to agree production licences with Chrysler and a number of Japanese car makers.
It has a prototype development agreement with Opel for the Corsa model, news of which prompted a 13p rise in the shares to 95p.
According to analyst David Buxton, Antonov is better placed than ex-BTG business Torotrak, which demerged last month with a market capitalisation of about 4.8 times the value of Antonov.
‘Our research shows that Antonov has an inherently more valuable earnings stream and should, therefore, stand at a premium to Torotrak, not an 80% discount,’ said Buxton.
In The Engineer earlier this year, managing director Mike Emmerson said the company’s focus on small car programmes in Asia will bear fruit this year because small automatic cars, which would use Antonov’s innovative gearbox, are more popular in Asian markets.
Buxton believes a market capitalisation of £230m is justifiable for Antonov.