BRC Asia

[nitenite]

Hi everyone, just checking anyone is looking at or vested with BRC Asia and would like to know what's your view on this turnaround counter as an investment with potential growth and quite ok div (~5%)? Thanks in advance

[NTL]

Am watching this company for the past 3mths.

Seems like they are doing well in current situation where there is limited labour supply for the construction industry. Companies are using prefab technologies to increase their productivity.

From their Q3 annoucement today, their gross margin improve from 10% to 15%, their net margin improve from 5% to 8%. EPS year to date increase from 1.09c to 3.01c. Extrapolating the result will give a PE of only 5. Dividend would at least be 5% for the whole year.

Who else is watching this company, please give your comments?

Thanks.

[NTL]

Something is brewing here. Never seen this company traded at such a high volume today. Anyone know of any news that can trigger such a high volume?

Thanks.

[orangetea]

Am watching this company for the past 3mths. Seems like they are doing well in current situation where there is limited labour supply for the construction industry. Companies are using prefab technologies to increase their productivity. From their Q3 annoucement today, their gross margin improve from 10% to 15%, their net margin improve from 5% to 8%. EPS year to date increase from 1.09c to 3.01c. Extrapolating the result will give a PE of only 5. Dividend would at least be 5% for the whole year. Who else is watching this company, please give your comments? Thanks.

Koh brothers is involved in prefab across the causeway.

http://forums.condosingapore.com/showthread.php?t=19029

Looking at COE and foreign worker clamp down, chances are they can do well there without these restrictions as prefab can be brought in sg and i have seen JB registered trailers ferrying prefab products on sg roads.

Looks like they will be the one to beat with lower overhead.

[NTL]

The sharp rise in steel price and shipping cost may hurt the margin. May expect a weak quarter reporting this round.

[NTL]

BRC had announced their full year result. Revenue for year hit $425M, Net profit of $35.6M, or 4.06c per share.

They also announced a final + special dividend total of 1.2c, bringing the total dividend for the year to 1.7, which is around 8% based on today closing price.

Their outlook seems bright too.
"The outlook for local construction demand, and hence for local reinforcing steel, remains solid. This can be clearly seen from the following 2 charts3, which show that the number of both residential and non-residential units due for completion in the next 2 years exceed by far the average over the preceding 4 years."

http://infopub.sgx.com/FileOpen/BRC_Asia...eID=265072

http://infopub.sgx.com/FileOpen/BRC_Asia...eID=265073

[valuebuddies]

Steel producers feeling effects of China slowdown

Positive to BRC?

[NTL]

Steel producers feeling effects of China slowdown

Positive to BRC?

Based on the latest statement, the company is already delivering higher volume of sales. However, lower revenue is observed, along with lower cost of sales. They are currently experiencing margin squeezed.

"in the local reinforcing industry, the influx of new players coupled with the expansion of production capacity by the existing players over the last two years have lead to a steady erosion of profit margins amid fierce and relentless competition."

This will be the first time that the company has put such a negative statement in their announcement. Going forward, I believe that things is going to get tougher.

Shall see.

[Greenrookie]

Steel producers feeling effects of China slowdown

Positive to BRC?

Based on the latest statement, the company is already delivering higher volume of sales. However, lower revenue is observed, along with lower cost of sales. They are currently experiencing margin squeezed.

"in the local reinforcing industry, the influx of new players coupled with the expansion of production capacity by the existing players over the last two years have lead to a steady erosion of profit margins amid fierce and relentless competition."

This will be the first time that the company has put such a negative statement in their announcement. Going forward, I believe that things is going to get tougher.

Shall see.

Hi NTL, it is the same thing at Lee metal, higher volume of sales but lower revenue due to margin squeeze.

I think the next 2 -3 quarters will be very good to see who are the leaders of this industry. There are 2 ways to overcome this:

1) substantial higher volume to offset margin squeeze

2) proper inventories and cost management. So that certain contracts are in case of buy lower sell low and maintain margin. I curious among BRC, lee metal, Asia enterprise while not direct comparable, but well managed anyway, which will emerge strongest?

[valuebuddies]

I don't see any margin squeeze, the gross margin was 10.5% for FY2011, 9.7% for FY2012, 15.2% for FY2013 and 15% for 1H2014 respectively. And in fact the revenue was decreased yoy whether comparing the 1H or 2Q. (are we talking about different company )

What are bothering me is the cheaper steel prices and also the recently announced 5% convertible bonds. Firstly cheaper steel prices mean cheaper cost of sales; or lower revenue? Secondly, what is the real motive of issuing the conv bonds where the existing rates of borrowing are so much lesser.

What is your thought?