20-04-2011, 10:17 AM
(This post was last modified: 23-10-2013, 03:10 PM by CityFarmer.)
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.
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.