Engro Corporation

[mrEngineer]

After glancing thorough their annual reports for 15mins, I am compelled to make some coments. Engro previously known as SsangYong cement is one of the big players in ready mix in Singapore. However if u observe their segment results the segment that is positive is specialty cement and seems like most coming from it's china associates. So buying into a construction company with the backdrop of marina bay infrastructures are not performing as what analyst may acclaim on macroeconomic level.

Secondly, their investment in China may be a good one with plants located at metro cities like Beijing and Shanghai. Although I am unsure of the competitive landscape, all I can comment is that producing PCC cement does not mean it's plants would not be shut down by government. If u read the latest china 5 year plans, it has specifically outlined that plants that are environmentally friendly and energy efficient would be shut down (about 80% will be shut down and consolidated). This means that plants would require to use alternative fuels and invest heavily in filters to reduce emissions. I am not sure about their plants but I would assume they are not that advanced based on the amount of capex. Winning green awards in Singapore does not mean much if you do not understand what are they winning and what are the other competitors or industry doing.

Thus, I would categorize the company as risky and investors should look into the chinese plant technology to ensure the survival in the coming years.

[freedom]

recently looked into this company.

what interests me is that its associates in China is not bad a business and contribute most of its profit.

til FY2011, its installed capacity in China was around 4.8 million tons of GGBS(a green cement based on slag from steel making)

1. Tangshan Tanglong Materials Co Ltd 1.2 million metric tons(between Tang Steel（part of Hebei Iron and Stell Group) and Engro)
2. Tangshan Tang-Ang Materials Co Ltd 0.6 million metric tons(between Tang Steel（part of Hebei Iron and Stell Group) and Engro)
3. Jinan Luxin Materials Co. Ltd 1.8 million metric tons(between Jinan Iron and Steel and Engro)
4. Jiangsu Huailong Materials Co. Ltd 1.2 million metric tons (between Sha Gang Group and Engro)

Til today, 1.8 million more metric tons added in Jinan Luxin(another 0.6 million metric tons) and Wuhan Wuxin(1.2 million metric ton, between Wuhan Iron and Steel and Engro) and another 1.8 million planned for Wuxin.


in FY2011, the above associates with 4.8 million metric tons' installed capacity contributed more than 8 million profit(segment profit in AR2001). these associates(including associates for property investment) are relatively well funded with total liabities/total assets = 50%. total liabilities/net profit = 8.

With more capacity of GGBS in 2012, half year, profit from associates was already 25% more than last year. so expecting a better profit in FY2012 from associates alone.

the company has a relative small share base, with only less than 120 million shares in total.

the rest of its business is at best mediocre. its special polymer has been making big loss.

[chialc]

vested due mainly to their green theme.

[Vseeker]

Recently HoBee reported that HBS Investments Sold its 9% stake in Chongbang Development Ltd for $48.08m, Bv=$1.35m, Gains=$46.7m,
Total divestment proceeds = $79.2m (incl repayment of shrhldrs loans)

HoBee had 700.846m issued shares and had a 70% in HBS Investments.
so HoBee's gains=$32.69m (4.7c pershr) & share of Total divestment proceeds = $55.4m (7.9c pershr)

EnGro had 117.985m issued shares and own the balance 30% of HBS Investments.
=> EnGro's Gains=$14.01m (11.9c pershr) and share of Total divestment proceeds = $23.76m (20.1c pershr)
==> so we might see EnGro reporting its all time record earnings this year.

....I believe this year also happen to be EnGro's 40th Anniversary...
assuming divestment completed within Q1, then EnGro's 2013-Q1 results should show a EPS jump coz of above gains,
and its already high NAV, should rose further from current $1.58 to around $1.70 per share.

separately for its speciality cement business, the new Quanzhou Luxin plant will commence operation in Q4 this year,
this will raise the Company’s total GGBS production capacity in China to 9 million tons per annum.

[chialc]

3 cents dividend and company buying back share too.

[cyclone]

The company is diversifying to restaurant business in the territoy of North China. Hope this is not a diworsification.

INTRODUCTION
The Board of Directors of EnGro Corporation Limited (the “Company” and together with its subsidiaries, the “Group”) is pleased to announce that its wholly-owned subsidiary, EnGro Global Resources Pte Ltd (“EGR”), has on 26 June 2014 entered into an Area Development Agreement (the“Agreement”) with Brotzeit International Pte Ltd (“Brotzeit”).
Brotzeit is the proprietor of the “Brotzeit” trademark associated with the franchise business focusing on German concept of casual dining which offers authentic German cuisine accompanied by German beers in chic and contemporary settings (the “Business”).

SALIENT TERMS
Pursuant to the Agreement, Brotzeit has granted to EGR the right to develop the Business in the territory of North China, with each restaurant to be established and operated through a separate franchise agreement, the final terms of which shall be agreed between the parties taking into account the circumstances and conditions then of specific markets.
In consideration of the grant of the development rights under the Agreement, the Company shall pay the following development fee:
a) US$240,000 upon signing of the Agreement;
b) an additional development fee of US$240,000 provided EGR proceeds with the establishment of more than five restaurants; and
c) a final development fee of US$210,000 provided EGR proceeds with the establishment of more than ten restaurants.
The development fees were negotiated amongst EGR and Brotzeit on a commercial basis taking into account, inter alia, normal business and operational considerations. The Company intends to fund the payment of development fees through internal cash resources.

RATIONALE
The Agreement is the result of active and constant exploration of business expansion initiatives aimed at enabling the Group to better position itself to achieve long-term value for its shareholders and providing additional earning streams for the Group.
Leveraging on the Group’s business growth track record in China, the Agreement provides an opportunity for the Company to develop, own and manage food and beverage (“F&B”) businesses in China in order to derive recurrent income while complementing its existing business. The Group will however tread cautiously, the Agreement representing its preliminary foray into the F&B scene.
The core business of the Group remains to be anchored on the manufacture and sale of speciality cement and sustainable construction materials, with continued focus on green label certified green cement and green concrete.

FINANCIAL EFFECTS
The execution of the Agreement is not expected to have any material impact upon the consolidated net tangible assets per share and earnings per share of the Company and the Group for the financial year ending 31 December 2014.

INTERESTS OF DIRECTORS AND CONTROLLING SHAREHOLDERS
None of the Directors and controlling shareholders of the Company has any interest, direct or indirect, in the Agreement.

More on Brotzeit : http://en.wikipedia.org/wiki/Brotzeit_(restaurant)

<vested>

[opmi]

Breadtalk paid tuition fees for >5 years in PRC. GOOD LUCK to Engro.

[sykn]

I've had the good fortune of owning some EnGro shares which have gone up some 30% in the last 7 months, without knowing why. Looking at the 1Q14 results, I don't think they are doing terribly well, and yet the share price jump was unrelenting. I sold off some at a handsome profit, but it went up some more! What's going on? Would some kind soul like to enlighten why this is so? Thanks in advance.

[BlueKelah]

Pump and dump on manufactured news, that's what's going on...

via XperiaZ1 with tapatalk

[SLC81]

I believe Engro is one of last few the deep value company remains to be discovered.
In fact, Engo has many business and it's value if breakdown would be worth much more than its current NAV 1.81 (around 190 Mils for the whole company), few notes.
1) It is in NET CASH with around more than 30 cents/share, zero debt.
2) It has:
2.1) GGBS cements, with substantial exposures to China. GGBS is green environmental friendly cement and it should trend for china tightening carbon emission. However because they depends iron slags from on steel mills so the slowdown on the china construction are taking its toll on Engro. (check profits from associates), this business segment could be worth as much as 180 Mils or entire Engro market cap.
2.2) property development., Engro has made good money joining with minority interest with Ho bee (in Singapore) and Hoo Bee, Yan Lord (in China). They still have money left (units unsold) in a Sentosa Project and equity interest in Tang Shan Nanhu Eco-city development. this could be worth another $50 Mils
2.3) Venture capital (Juniper Ventures Capital)
I estimated that Engro has around 40-50 Mil ($20 mils invested), $30 mils in cash recently injected and to be deployed. Most of capital are invested in US and they should be doing very well. In Singapore they have invested in few companies and i found few here:
2.3.1 QTVascular (Pre-investor , invested $ 1.5 Mil for 9.9 Mil shares, at the current market price, their stakes is worth around $3 mils or 100% profit
2.3.2 GreenKoncept, Not sure how much they invested but i thimk should not be less than $1.5 Mils, this company could be IPO in two years.
http://www.greenkoncepts.com/news-events...owth-plans.

2.3.3 Top-mix concrete : Not much value
2.3.4 Specialty Polymer: losing money business

Sum of all parts, Engro should be worth at $2.5/share at least or 100% more than its current share price.