Mencast
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Cornerstone investor GAY CHEE YONG in mencast
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now with Mencast being spotlighted in TheEdge mag.. more investors will jump on the bandwagon..
good to spot and vest b4 the herd comes in..
gd luck!
Top Great buy propels Mencast into spotlight
Shares of Catalist-traded Mencast Holdings
have seen heavy trading volume after it announced on May 18 it had
acquired engineering systems installer Top Great Engineering &
Marine.
Mencast -- which makes, supplies and repairs
propellers and stern gear for seafaring vessels -- is purchasing Top
Great for $24 million. Mencast will pay $9.6 million in cash and satisfy
the remaining $14.4 million through an allotment of new Mencast shares
via three separate tranches -- “a small price to pay for an accretive
deal”, according to Gary Ng of CIMB.
That’s because the acquisition comes with a
guarantee that Top Great will achieve net profits of not less than $8
million between May 1, 2011 and April 31, 2013. It Top Great fails to
meet the target, it'll have to make good the shortfall in cash to
Mencast within six months after the agreed period.
For the year ended Dec 31, 2010, income earned
by Top Great before deducting taxes was $4.7 million. In comparison,
Mencast achieved a net profit of $8.5 million over the same period, a
20.8% y-o-y rise, on the back of $32 million in revenues, up 21.9%
y-o-y.
Analysts say the addition of Top Great will
give Mencast the opportunity to tap a larger pool of clients in the
region and add margin value with a fuller range of maintenance, repair
and overhaul (MRO) services to the booming offshore and marine industry.
“This [acquisition] would allow Mencast to
create positive synergies, economies of scale and strengthen its value
proposition to attract and retain new clientele,” Ng of CIMB points out.
“We think that with Top Great being integrated into Mencast, the group
would eventually make its foray into overseas markets, which would mean
higher margins due to the higher premium the group charges for projects
outside Singapore.”
Mencast started out three decades ago as
provider of repairs and maintenance services of marine propellers for
fishing and bumboats in Singapore. It eventually expanded its client
base to include owners and operators of tugboats and ferries in 1993 and
extended its capabilities to provide a full range of sterngear
equipment and services for local and regional shipyards and ship owners
in 2001. In 2008, Mencast, which operates a yard in Tuas, sought a
listing on the Catalist.
Last year, in a bid to increase growth,
Mencast announced that it would lease 16,200 sq m of land at the
waterfront on Penjuru Road to build a manufacturing plant for stern gear
equipment and centralise its manufacturing activities for better
efficiencies. Mencast expects to complete construction of the plant --
which will be 3.5 times larger than all its existing plants combined --
by year-end. Despite slowing demand for commercial ships given an
existing oversupply in the market, Mencast is confident of booking
revenues from repeat MRO (Maintenance, repair and operations) contracts
from ship owners and expects to see growth coming from the booming
offshore sector. The company currently has an order book of about $8
million.
Since the start of the year, shares of
Mencast are up by about 10%, closing on May 20 at an all-time high of 45
cents each. But there’s more good news. Ng of CIMB has upgraded his
12-month target price on the stock by 6% to 70 cents apiece despite
dilution from the new shares, as the stock is still trading at a 15%
discount to its larger peers. At current levels, it has a market
capitalisation of just $76.6 million and trades at 8 times earnings.
“This stock is only at the growth stage and
has not scaled the high wall of valuation,” Ng writes in a recent
report. “[The shares] will climb, and a further re-rating will propel
the stock with an upgrade to the Mainboard from its current board
Good Luck
Mencast Holdings to acquire Top Great unit for $24m
Mencast Holdings, the sterngear equipment manufacturer and sterngear services provider in Singapore, has agreed to acquire the entire issued and paid-up share capital of Top Great Engineering & Marine for $24 million from Wong Boon Huat, Wong Boon Hwee and Wong Boon Kok.
The acquisition will be satisfied by $9.6 million in cash and $14.4 million in Mencast shares.
Top Great Group is in the business of engineering design, procurement, fabrication and installation of structural and precision engineering systems and plants. Its business operations include the provision of skilled professionals and manpower as well as full turnkey project management of engineering projects.
Top Great Engineering & Marine’s unaudited profit before income tax was $4.7 million for the financial year ended 31 December 2010 (FY2010). Unaudited net asset value of the Top Great Group as at 31 December 2010 was $10.64 million.
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It is just about 30 lots of Mencast Hldgs for 1 unit of land.
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========================================================================
mencast XD n still up ..now 45c..
44c moving up slow and steady..
Ozone2002,
Thanks for info.
Gay was also an investor in ACCS.
From Kim Eng
Up-to-date in 60 seconds
Background: Mencast Holdings is a Singaporebased
marine services provider and a leading
sterngear manufacturer and repair company for
a wide range of commercial applications. It
caters mainly to customers in the marine and
offshore oil and gas industries in the Asia Pacific.
Recent development: Mencast’s net profit grew
by 20.8% YoY to $8.5m in FY10, from $7.0m a
year ago. The growth was due to the full-year
contribution from its subsidiary, Recon Propeller
& Engineering, as well as higher demand for
sterngear services (+60.8% YoY in revenue to
$19.3m). However, this increase was partly
offset by a 10.8% decrease in sales of the
sterngear manufacturing segment due to the
slowdown in shipbuilding activities in the region.
Key ratios…
Price-to-earnings: 6.7x
Price-to-NTA: 1.5x
Dividend per share / yield: $0.011 / 3.1%
Net cash/(debt) per share: $0.005
Net cash as % of market cap: 1.4%
Source: Bloomberg, based on historical data
Everything else…
Share price S$0.360
Issued shares (m) 170.573
Market cap (S$m) 61.41
Free float (%) 31.2%
Recent fundraising
activities
Nov 2010: Private placement of
15.5m shares at S$0.35 a share
Financial YE 31 December
Major
shareholders
Sim Family (57.5%),
Gay Chee Cheong (5.23%)
YTD change -12.2%
52-wk price range S$0.29-0.425
Source: Company
Our view
Clear expansion plans in place. As part of its
ongoing business expansion, Mencast is looking
to raise its production capacity with the building
of a new manufacturing plant in Penjuru Road.
When completed in 4Q11, the waterfront facility
will enable the company to expand its product
range to include high-end sterngear equipments
that generally command better margins.
Strategic alliance brings new opportunities.
Since 2008, Mencast has been working closely
with Becker Marine Systems, a leading rudder
and manoeuvring solutions provider in Europe.
The tie-up has allowed Mencast to leverage on
Becker’s technologies and acquire new
customers, particularly from South Korea, Japan
and China. Management believes the company
is one of the preferred manufacturers of heavy
rudder assemblies and high-end sterngear
equipment in Asia.
Robust orderbook. As at end-December
2010, Mencast’s sterngear manufacturing
business segment has an outstanding orderbook
of $8.0m, most of which is expected to be
recognised in the first half of FY11.
Undemanding valuation with decent yield.
The company has declared a final cash dividend
of 1.1 cent per share for FY10, representing a
payout ratio of about 20.4%. The stock currently
trades at 6.7x FY10 PER.
Who is Gay Chee Yong?
true blue singapore warren buffet.
ozone2002 ( Date: 13-Apr-2011 10:27) Posted:
the secret to stocks..
buy when majority isn't buying..
sell when everybody wants to buy it.. |
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the secret to stocks..
buy when majority isn't buying..
sell when everybody wants to buy it..
Tks for the good news
Vested
7 traders, you one of them......hahaha!
ozone2002 ( Date: 13-Apr-2011 09:47) Posted:
Mencast up 2.5c ...now $0.43
gd luck |
|
Mencast up 2.5c ...now $0.43
gd luck
activity detected today...
vested
