AEL Sudden interest

CSE1 · 1 AEL Sudden interest Wed May 08, 2013 12:50 pm

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why AEL Sudden interest ?

sandunj · 2 Re: AEL Sudden interest Wed May 08, 2013 12:52 pm

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Yes Im also noted it and open the order book and looking at it. May be tomorrow or friday it can be shine... any guesses?

Takecharge · 3 Re: AEL Sudden interest Wed May 08, 2013 12:54 pm

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I had the option of buying either AEL or VONE, went with VONE as it has a promising future, but my broker also recommended AEL.
I heard of political connections which could help them get big contracts in the future. great buy at this price

CSE1 · 4 Re: AEL Sudden interest Wed May 08, 2013 12:58 pm

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@Takecharge wrote:I had the option of buying either AEL or VONE, went with VONE as it has a promising future, but my broker also recommended AEL.
I heard of political connections which could help them get big contracts in the future. great buy at this price

mmm is that so ??

Takecharge · 5 Re: AEL Sudden interest Wed May 08, 2013 1:07 pm

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@CSE1 wrote:

@Takecharge wrote:I had the option of buying either AEL or VONE, went with VONE as it has a promising future, but my broker also recommended AEL.
I heard of political connections which could help them get big contracts in the future. great buy at this price

mmm is that so ??

exactly. well worth considering.

micky · 6 Re: AEL Sudden interest Wed May 08, 2013 2:23 pm

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@CSE1 wrote:why AEL Sudden interest ?

good observation. from VONE and AEL , i selected AEL.

KAPI under loss, but put some time on it.

seek · 7 Re: AEL Sudden interest Wed May 08, 2013 2:26 pm

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Last hour rush is being created for AEL

micky · 8 Re: AEL Sudden interest Wed May 08, 2013 2:28 pm

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@seek wrote:Last hour rush is being created for AEL

not last hour friend. check last 3 days.

K&M · 9 Re: AEL Sudden interest Wed May 08, 2013 3:00 pm

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AEL is a great company, im pretty sure they will surprise the markets. There balance sheet is good, cash position is healthy and with the government support they has the potential to become a one of the largest construction companies in south Asia.

If you look at the business from the local context Access is currently second to DOCK but in the medium term im virtually certain they have the capacity to become the highest cap construction company. Im sure most of you guys have noticed the amount work in progress AEL has under them. Therefore its a great opportunity to buy AEL at this price. As a shareholder i would be more satisfied if they can reduce the amount of shares issued maybe through a share buyback.

Takecharge · 10 Re: AEL Sudden interest Wed May 08, 2013 3:20 pm

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well made up my mind, will buy some. Smile

sahan8896 · 11 Re: AEL Sudden interest Wed May 08, 2013 3:26 pm

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Interest was there for sometime.Is this overbought at this level?

seek · 12 Re: AEL Sudden interest Wed May 08, 2013 3:37 pm

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IPO price is 25. Market hasn’t seen any significant appreciation for this after the IPO. Will this bull trend lift AEL price above its IPO price?

Bond · 13 Re: AEL Sudden interest Wed May 08, 2013 4:22 pm

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how much of AEL assets are working capital?

Nearly all the projects expire this year:

Unity Container Terminal
Veyangoda Railway Crossing Flyover
ADB Funded Eastern and North Central Provincial Bridge
Outer Circular Highway Northern Section 1–Piling Works
Proposed G +11 Housing Blocks(4 Nos)With Total Of 546 Dwelling Units Mattala Airport Building Project/ Dialog Aerial Optical Fiber Network Project Dialog Aerial Optical Fiber Network Project
Construction and commissioning of Gated Salinity Barrier across Walawe River at Ambalantota etc etc
Relocation of distribution main along A6 main road from chain age 157+000km to 167+280km
Supply and laying of 400mm Dia.DI transmission main from Kantale to Ganthalawa
Hambantota Port - Harbour Water Tower Project

This is the biggest project on the books - due on 2014 and is worth 2.6b/=
Construction of 1137 housing units at Henamulla

After those projects are finished how much working capital will be written off the B/S? Check for yourself on their website. Wink

suja · 14 Re: AEL Sudden interest Wed May 08, 2013 4:40 pm

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Bond, Can you explain why W/C should be written off? Did not get the picture can you enlighten please?

Bond · 15 Re: AEL Sudden interest Wed May 08, 2013 4:49 pm

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@suja wrote:Bond, Can you explain why W/C should be written off? Did not get the picture can you enlighten please?

I don't know what their accounting rules are and I haven't studied this firm. But some assets are brick and tile. From my limited understanding they have to put a lot of capital to start work on these projects. Final payment should be after the project completion with interim payments made in stages. Some of those hard assets (ie machinery, pilings, temporary material used for structures) would have to be written off.

Takecharge · 16 Re: AEL Sudden interest Wed May 08, 2013 5:29 pm

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Despite the negative comments,as They have pledged to sustain the growth into the future as well. So, I believe, this is a mid to long term, and would be a great investment.

K&M · 17 Re: AEL Sudden interest Wed May 08, 2013 5:49 pm

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@Bond wrote:

@suja wrote:Bond, Can you explain why W/C should be written off? Did not get the picture can you enlighten please?

I don't know what their accounting rules are and I haven't studied this firm. But some assets are brick and tile. From my limited understanding they have to put a lot of capital to start work on these projects. Final payment should be after the project completion with interim payments made in stages. Some of those hard assets (ie machinery, pilings, temporary material used for structures) would have to be written off.

Bond, construction contracts are accounts that are created in a four step basis,

1.Before any contract work is started it has to calculate the the total revenue (fix price) ,total cost involved in the contract and its overall profitability.

2. Once the above is determined the firm has to choose a basis to calculate the stage of completion. stage completion can be calculated on a cost basis (cost incurred up to date divided by total cost * 100) or value of work certified basis (work completed divided by revenue). Stage of completion helps company to determine the work done for a specified period.

3. Base on the percentage determined companies recognize the revenue and cost for the period. This profit is generally carried forward to the companies accounts. If the construction is having only a year to complete the contract , it has to create a provision for the next years revenue and cost as well.

4. In the 4th step companies create an extract of its balance sheet. in here it recognized the gross amount due from parties and due to be paid. This calculated by cost inured up to date plus profit recognized in the current year - progress payment received by parties and this is the amount which AEL has stated in there balance sheet under Current assets as 74 Million. that suggest that majority of the payment were received in the current year if not the number would have been much more higher.

There trade receivables must probably come from there renting activities, as far as i know they have the modern machinery and equipments which they lend to other construction work around sri lanka and there getting a considerable return from it.

Hence there is no way that the materials and equipment they used need to be written of after each project, for every single material they use they get paid, otherwise they wont have revenue more than billion.

Bond · 18 Re: AEL Sudden interest Wed May 08, 2013 6:01 pm

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Thanks that was the sort of info I wanted.
What do you think of the fact that most of the work ends this year?

K&M · 19 Re: AEL Sudden interest Wed May 08, 2013 6:22 pm

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@Bond wrote:Thanks that was the sort of info I wanted.
What do you think of the fact that most of the work ends this year?

Well they will take a little break after all the hard work done... after all this construction work people can be very tired Very Happy

Machan if you look at the projections Sri Lanka will require 54 Billion USD to complete its infrastructure projects and lets allocate 0.05 for AEL (im pretty sure they will get much more due to the close relationship with the current) still they will go home with 2.7 Billion at current Exchange rate it would be 340 Billion. This just and example how AEL can turn into a south asian power house.

K&M · 20 Re: AEL Sudden interest Wed May 08, 2013 6:25 pm

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http://www.lankabusinessonline.com/news/Sri_Lanka_near_term_infrastructure_needs_of_US$53bn:_expert/1212520723

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AEL Sudden interest

1 AEL Sudden interest Wed May 08, 2013 12:50 pm

CSE1

2 Re: AEL Sudden interest Wed May 08, 2013 12:52 pm

sandunj

3 Re: AEL Sudden interest Wed May 08, 2013 12:54 pm

Takecharge

4 Re: AEL Sudden interest Wed May 08, 2013 12:58 pm

CSE1

5 Re: AEL Sudden interest Wed May 08, 2013 1:07 pm

Takecharge

6 Re: AEL Sudden interest Wed May 08, 2013 2:23 pm

micky

7 Re: AEL Sudden interest Wed May 08, 2013 2:26 pm

seek

8 Re: AEL Sudden interest Wed May 08, 2013 2:28 pm

micky

9 Re: AEL Sudden interest Wed May 08, 2013 3:00 pm

K&M

10 Re: AEL Sudden interest Wed May 08, 2013 3:20 pm

Takecharge

11 Re: AEL Sudden interest Wed May 08, 2013 3:26 pm

sahan8896

12 Re: AEL Sudden interest Wed May 08, 2013 3:37 pm

seek

13 Re: AEL Sudden interest Wed May 08, 2013 4:22 pm

Bond

14 Re: AEL Sudden interest Wed May 08, 2013 4:40 pm

suja

15 Re: AEL Sudden interest Wed May 08, 2013 4:49 pm

Bond

16 Re: AEL Sudden interest Wed May 08, 2013 5:29 pm

Takecharge

17 Re: AEL Sudden interest Wed May 08, 2013 5:49 pm

K&M

18 Re: AEL Sudden interest Wed May 08, 2013 6:01 pm

Bond

19 Re: AEL Sudden interest Wed May 08, 2013 6:22 pm

K&M

20 Re: AEL Sudden interest Wed May 08, 2013 6:25 pm

K&M

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