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ALUMINIUM SECTOR: DEFINITE CHANCE FOR RETAILERS

+2
A2Z
AAABoy
6 posters

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AAABoy

AAABoy
Moderator
Moderator

I guess there will be a chance of getting a good return from moving money to Aluminium Industry. Please refer the following details which would help you to get a clear idea about.

ALUMINIUM PRODUCTS

Aluminum is widely used in many products. Transportation, beverage cans and other packaging, and building/construction are well known markets for Aluminum. Thus far, the construction industry is considered as the biggest consumer of Aluminum in developing countries owing to the substantial investments in the infrastructure development. Building and Construction:

Aluminum is a widely used product in the residential, industrial, commercial, farm, and highway sectors.

Transportation:

The majority of the aluminum is currently being used in automotive and light truck applications, as vehicle manufacturers continue to opt for lightweight aluminum solutions to improve fuel economy, reduce emissions and enhance vehicle performance Packaging: Aluminum is also used in products such as beverage cans and bottles, food containers, and household and institutional foil.

Furthermore, Aluminum’s low weight gives it a competitive advantage over other materials with regard to shipping costs. Electrical Aluminum has many advantages for electrical applications. It is lightweight, strong, corrosion resistant, and a highly efficient conductor. It is also infinitely recyclable, making it a perfect fit for today’s environment.

ALUMINIUM MARKET

The increase in the world population along with a rapid development and urbanisation of the developing countries has contributed mainly towards the rising global demand for Aluminum. As per the industry research carried out by Infiniti Research Ltd., the global Aluminum market is expected to grow at a Compound Annual Growth Rate (CAGR) of 5.90% over next five years. Moreover, the global Consumption of Aluminum is forecast to reach approximately 58 million tons in 2015 based on a research carried out by RUSAL.

Thus far the construction industry represents as the biggest consumer of Aluminum in developing countries owing to the substantial investments in the infrastructure development. Construction and
Transportation industries are known to be the major consumers of most of the aluminum produced in the above countries.

STOCK   PRICE     PER   2013/14 NET PROFIT DPS BVPS
LALU                    32.90              24.4          32.1MN                           0.50           42.97
ALUF                    18.60              -             (18.4MN)                          -                 7.38
ALUM                   14.00              12.8         306.3MN                          0.50             4.80
PARQ                   26.00                6.5           117MN                           -               27.00  


I completely throw out ALUF, because they are continuously having losses and I don't see any big potential of increase their turnover in future even. Also note Sanken construction have filed a court case against ALUF as well.

LALU has a good management team filled with some big names like H.Amarasuriya, S. Weerakkody Nagendra and J.D Peiris. Also The majoring 50.3 percent of the firm is held by Clovis Company Ltd, which is an investment arm of Comcraft group owned by a family called Chandaria. They are the major shareholder of ACME as well.

ALUM is my favorite as it is the clear leader of Aluminium industry in Sri Lanka with over 25 year experience.  Alumex, 51% owned subsidiary of conglomerate Hayleys (HAYL), is the local market leader of aluminium extrusion manufacturing, with market share exceeding 50%. Alumex is the only local extrusion manufacturer and manufactures extrusion dies (molds). ALUM imports 75% of Aluminium Billets every year and other 25% they fill with recycling.

PARQ is a testing stock for traders, Actually PARQ is tile grout and mortar producer but their subsidiary called Swisstek Aluminium is the main contributor to their revenue. As at 2013/2014 annual report total revenue of PARQ was 1.4Bn out this amount 1.1Bn contribution has come from Swisstek Aluminium. This counter had been making losses continuously and at once they could achieve a profit in this year. So that we have to carefully analyze whether they can keep that momentum in future. Anyway this is good share to trade at this stage even.

Comments are welcome!!!

A2Z

A2Z
Manager - Equity Analytics
Manager - Equity Analytics

Alumex started a run after your post. Is there any news?

AAABoy

AAABoy
Moderator
Moderator

A2Z wrote:Alumex started a run after your post. Is there any news?

Don't buy it for News. Analyze analyze and analyze once you got confidence you Buy.

Lawwa


Senior Equity Analytic
Senior Equity Analytic

Alumex is moving. Your researches awesome. Keep posting.

stevenapple


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

Well detailed article.
Thanks A3Boy.

fireshelter

fireshelter
Associate Director - Equity Analytics
Associate Director - Equity Analytics

Alumex Plc going to acquire Alufab plc That's Why Alumex going up at the same time Alufab Also start run in next Days

k9


Expert
Expert

fireshelter,
Your information is correct.Alumax is going to buy ALUF.
After that,
ALUM -Hayleys 51%
PARQ- Lanka tiles/waltiles 59%
LALU-Mr.DHammika Perera 29%
THEN ALUF..................................


After the ALUF acquisition,
Sri Lankan Aluminum Sector Monopoly goes to MR.Dhammika PERERA

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