Asset Purchase Agreement entered into between Prestar Industries (Vietnam) Co., Ltd. ("PIVCL") and Thai Binh Shoes Joint Stock Company. Disposal consideration, including 10% Value Added Tax, of Vietnamese Dong118,800,000,000/- (equivalent to approximately RM22,710,763/- at he exchange rate of RM1/- = VND5,231/- as at 27 April 2017).
Expected gain to PRESTAR Group ----------------------------------- The Group is expected to report a net gain of approximately RM8.0 million after deducting the relevant expenses associated with the Disposal i.e. Agent’s commission, legal fees and tax. However, this amount is subject to change due to the fluctuation of foreign currency rates from time to time.
Although bank borrowing could be as high as 226 mil, but for the future expansion is great enough, as we can see the inventories on hand is 180 mils as well. So, let's see the coming performance.
"The Group is expected to report a net gain of approximately RM8.0 million after deducting the relevant expenses associated with the Disposal i.e. Agent’s commission, legal fees and tax. " . RM8 million should be contributed ~ 4.2 EPS.
If we take conservative way to calculate the share value, incoming 2 quarters each EPS hit 4 cent Total EPS 4.8+ 4.31+4+4 + 4.2 cents(from 8 million)= 21.31. PE 8 times , the share value will be RM1.70. PE 10 times , the share value will be RM2.13.
When the market was bad Prestar managed to maintain profitability.. when the market turned well Prestar able to adapt and absorbed the good market condition well... if market remains optimistic this year I believe Prestar hitting 1.50 to 2 ringgit in near future would not be a problem....
KUALA LUMPUR (April 28): Prestar Resources Bhd is disposing of its plant at Song Than 3 Industrial Park in Vietnam for VND118.8 billion (RM22.71 million) as part of plans to shift its manufacturing operation back to Malaysia.
The steel maker is expected to report a net gain of RM8 million from the disposal.
The Edge also cover abit on Prestar recent news too. Shifting plant back to Malaysia will improve the cost effectiveness? If yes, the profit margin will be improve and will be showed in incoming quarter result http://www.klsescreener.com/v2/news/view/226501
Recently Prestar kuat ESOS and make the share price was stagnant at around ~90 cents. High ESOS rate indirectly mean business is growing? Hopefully it can move soon
Annual Report pg 12: With the improvement in the business conditions in steel industry since early part of the year as mentioned above, profit before tax for the year under review was substantially higher at RM39.8 million as compared to RM20.1 million in the same corresponding period of last year. A 98.2% improvement in the profit before tax marked a significant record for the Group. The main reasons of such improvement were due to better sales margin obtained from more reliable overseas material suppliers with better pricing since first quarter of year 2016, after the discontinued operation of a large local mill as well as rebounded steel prices.
i cant recall where i had mentioned that...Prestar has so many manufacturing facility..pls share the statement i had mention earlier for me to recall what i could have meant.
probability looking at gross margin and revenue, Prestar is currently only operating at ~50% of its rated manufacturing capacity. Tubes and Storage system solution are probably the main contributors on throughput currently.
I think the Gross Margin is fairly fixed around current level (RM500/ton). The growth in revenue is where the prospects are...that seems inline with the recent job advertisement and projects surfacing...and the recent local developments (HRC sourcing due to Megasteel closure) enabling it to compete internationally for export market.
The guard rail demand due to local Highway projects are the new contributors ...and we should see that adding to its revenue going forward for the next few years.. 24/03/2017 18:51
only if use ~50% of the total throughput (367 ton/yr) x RM3300/ton (which is the price of steel approximately) divided by 4 qtr per year you get a revenue close to its reported latest qtr revenue of ~ 150 Million.
the price of steel (especially finished products) cannot be cheaper than 3300/ton...and as such if you use a higher value...the estimated throughput would be even lesser.
As such the 50% estimate is probably still on the high side. Significant un-utilized capacity is there.
Posted by probability > Mar 24, 2017 01:40 PM | Report Abuse X
Note: 1 ton = 1000 kg, current price ~ RM 3000. Their combined total capacity: 367,000 ton.
Even if you put just bloody RM 100 profit margin per ton of material processed (that is like 3% margin)...you will generate close to RM 40 Million profit per annum.
Actual current gross margin ~ 15% based on last 2 qtr latest.
I think the Steel Tube segment has like RM500 gross margin per ton based on the reported qtr results of Choo Bee and Mycron.
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Posted by paperplane2016 > 2017-04-28 10:46 | Report Abuse
Look at southern steel. All STEEL play 2nd round coming!