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FINANCIAL CHRONICLE™ » CORPORATE CHRONICLE™ » KAPI correct price to enter

KAPI correct price to enter

5 posters

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1KAPI correct price to enter Empty KAPI correct price to enter Sat Mar 05, 2011 7:27 pm

mjrocker


Senior Equity Analytic
Senior Equity Analytic

I think KAPI will be a gem in coming q and years.I think KAPI was overvalued now,can some one can give the correct price to enter.

2KAPI correct price to enter Empty Re: KAPI correct price to enter Sat Mar 05, 2011 8:02 pm

soileconomy

soileconomy
Vice President - Equity Analytics
Vice President - Equity Analytics

If you look at their financials (Last quarter) this price is justifiable.Considering the potential growth and contracts they are presently engaging and future possibilities I think It has got a bright future.
Rights issue funds will change the finance cost and workin capital in a positive way.

Do your own analys and tel ur gues also.I personaly beleive this price is ok.
People who got lot of additional shares are selling.That may it came down to this price level.

3KAPI correct price to enter Empty Re: KAPI correct price to enter Sun Mar 06, 2011 2:23 am

Slstock

Slstock
Director - Equity Analytics
Director - Equity Analytics

soileconomy wrote:If you look at their financials (Last quarter) this price is justifiable.Considering the potential growth and contracts they are presently engaging and future possibilities I think It has got a bright future.
Rights issue funds will change the finance cost and workin capital in a positive way.

Do your own analys and tel ur gues also.I personaly beleive this price is ok.
People who got lot of additional shares are selling.That may it came down to this price level.




I agree with "Considering the potential growth and contracts they are presently engaging and future possibilities I think It has got a bright future.Rights issue funds will change the finance cost and workin capital in a positive way."

But I do not agree that "If you look at their financials (Last quarter) this price is justifiable" as EPS will get diluted very much after the massive right issue. Looking at growth is a good company for the future. But Am kust syaing this price , even to me is a bit on the higher side for now. I would closely watch the market to find out where it is coming down little by little before commiting to buy.

4KAPI correct price to enter Empty KAPI-MTD WALKERS Sun Mar 06, 2011 6:09 am

soileconomy

soileconomy
Vice President - Equity Analytics
Vice President - Equity Analytics


Just to add something .

For last quarter alone they have done Rs 126 Mn (PAT)
After rights issue -No of Shares -114 Mn.
EPS on last quarter -Rs 1.09.(For the last 3 quaters-EPS Rs 0.96)
Since last quarter growth is extreamly gud , if we take future EPS it will show more than last qurter with improvements .
I think Seyon did a gud calculation on this share.

It is gud to analyse and buy rather than internet gossiping.

Gud luck

5KAPI correct price to enter Empty Re: KAPI correct price to enter Sun Mar 06, 2011 10:41 am

BenZ

BenZ
Manager - Equity Analytics
Manager - Equity Analytics

Link to the Seyon's analysis ...

http://forum.srilankaequity.com/t1076-sfin-and-kapi

I did some study on this as well. The current value of the share is supporting with the latest results and main attractive point of this share is its on the right track after making losses 2 - 3 quarters back.

Now it showing a very attractive growth and making reasonable profit Very Happy

I like to categorize this as a long term investment opportunity ....

Do further analysis before buy or sell. This is my view on it. That's all.

6KAPI correct price to enter Empty Re: KAPI correct price to enter Sun Mar 06, 2011 9:58 pm

seyon


Assistant Vice President - Equity Analytics
Assistant Vice President - Equity Analytics

BenZ wrote:Link to the Seyon's analysis ...

http://forum.srilankaequity.com/t1076-sfin-and-kapi

I did some study on this as well. The current value of the share is supporting with the latest results and main attractive point of this share is its on the right track after making losses 2 - 3 quarters back.

Now it showing a very attractive growth and making reasonable profit Very Happy

I like to categorize this as a long term investment opportunity ....

Do further analysis before buy or sell. This is my view on it. That's all.


Hi Guys

I just re-post my analysis I am looking the coming quarter results, which will be very attractive, since the after rights issue the balance sheet will be restructured and give a sound status of the company, further reduction of the financial cost would give amazing bootom line, based on the current earnings and scenario the price is bit overvalue.... PE reporting more than 50 times.... However i am looking about companies growth like future projects, that would give massive growth in coming quarters...... I can tell one thing the price will not drop drastically from the current level.....................

After the rights issue, as I predicted the 4th quarter and coming quarters results will be remarkable in terms of profit and its value… This 3rd quarter performance is the first step to entering into KAPI's new milestone....

KAPI 3rd quarter results @ Glance - ( Income Statement & Balance Sheet – Group)

Revenue For the quarter - Rs.653,195,579 – 129% increased

Revenue For 9 months - Rs.1,553,568,289 – 45% increased

Operational Profit For the quarter - Rs.179,910,318 – 520% increased

Operational Profit For 9 months - Rs.242,379,741 – 89% increased

Net Profit For the quarter - Rs.126,059,112 – 768% increased

Net Profit For 9 months - Rs.110,218,497 – 641% increased

EPS For the quarter (Before the Right issue) - Rs.22.05 whereas 2009- Rs.2.54

EPS For 9months (Before the Right issue) - Rs.19.28 whereas 2009 – Rs.2.60

Net assets Per Share (Before the Right issue) – Rs.47.18 ---- 2009 Rs. 43.35

The Financial highlights after the rights issue based on 3rd Quarter Results…


The Right Issue

Right issue 19:1 @ 33

Total Share issued on Rights ----------------- 108,639,283

Total Proceeds From Rights ----------------- Rs. 3,585,096,339.00

NAV/ Share After Rights

Equity ----------------------------------------------- Rs.479,584,783

Total Proceeds From Rights ----------------- Rs. 3,585,096,339

Total -----------------------------------------------Rs. 4,064,681,122

Total No of Shares After Rights-------------- 114,357,140

NAV Per Share ---------- Rs.35.54 ( Business Value Per Share)

Total Attributable Value to Equity Shareholder ------------ Rs. 269,778,996

Total Proceeds From Rights ----------------- --------------------Rs. 3,585,096,339

Total ----------------------------------------------- -------------------- Rs. 3,854,875,335

Total No of Shares After Rights----------------------------------- 114,357,140

NAV Per Share ---------- Rs. 33.70 ( Value /Share to Equity Shareholder)

EPS / Share After Rights

Total Group Earnings --------- ---------------------------------- Rs.110,218,497

Total No of Shares After Rights----------------------------------- 114,357,140

EPS/ Share ------------- Rs. .96

Total borrowing of Group ( As per Dec 2010)


Interest Bearing loans---------------------------------- Rs. 849,770,754

Non Interest Bearing loans--------------------------- Rs. 3,597,928,709 ( this may be received from related company to acquire the

company , stated in the propose of right issue)

Overdraft ------------------------------------------------ Rs. 311,689,918

Total Borrowings --------------------------------------- Rs. 4,759,389,381

Total Interest Expenses.-----------------------------------Rs 112,228,527

The Purpose of right Issue

The purpose for which the proceeds of the issue are to be utilized
1. To capitalize loans received for the acquisition of companies previously
2. To acquire Northern Power Company (Pvt) Ltd
3. To Finance Working Capital of the company

http://www.cse.lk/cmt/uploadAnnounceFiles/9961288151500_444.pdf

The proceeds of this Rights Issue will be used for the 100% purchase of Northern Power Company Private Limited, a 30MW HFO power plant located in Chunnakam, Jaffna, as the largest provider of electricity to the Jaffna Peninsula. The balance of the Rights Issue proceeds will be used for capital expenditure and working capital requirements of the MTD Group of Companies.

http://srilankastockpicks.blogspot.com/2010/12/mtd-walkers-plc-announce-rights-issue.html

We do not know about the numbers of the loans received for the acquisition of companies previously and the amount required to acquire Northern Power Company (Pvt) Ltd. However I would say major part of the loan will be settled from the right issue. Hence Finance cost amounts Rs.67Mn will be reduced and this would strengthen the bottom line. This scenario will highlight only on 4th quarter results.

Let us workout the utilization of right issue

Total Proceeds From Rights ----------------- ----------Rs. 3,585,096,339

Interest Bearing loans---------------------------------- Rs. 849,770,754

Non Interest Bearing loans--------------------------- Rs. 3,597,928,709 ( this may be received from related company to acquire the company , stated in the propose of right issue)

Overdraft ------------------------------------------------ Rs. 311,689,918

Total Borrowings --------------------------------------- Rs. 4,759,389,381

We do not the company preference to settle the loan facility. As stated in the purposes of right issue announcement, part of non interest bearing loan will be settled from the right issue proceeds and part of interest bearing loan also will be settled…

We can see only the restructured and sound balance sheet from the 4th quarter by reflecting above numbers. Further income generate from new projects (mentioned in previous) also will contribute to strengthen the company performance and value…


Keep on Investing in growth sectors……
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