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Haycarb PLC

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1Haycarb PLC Empty Haycarb PLC Fri Jul 01, 2011 2:33 am

Monster

Monster
Senior Vice President - Equity Analytics
Senior Vice President - Equity Analytics

HAYCARB PLC
Hayley Building,400,Deans Road,Colombo10.
Telephone : 0112677364, 0112691369 | Fax : 011-2699299,011-2699630
Email : general@haycarb.com | Web Site : www.haycarb.com

Haycarb PLC is a subsidy of Hayleys and one of the least discussed share in this forum. HAYC was the first company listed in Colombo Stock Exchange in Hayleys group. The largest manufacturer of coconut shell based activated carbon with annual manufacturing capacity of 25,000 MT. Haycarb group has manufacturing plants in Sri Lanka, Thailand and Indonesia with marketing offices in the UK, Australia and USA. For over 35 years Haycarb has been manufacturing and distributing high quality, high purity activated carbon to the global market.

During last financial year company saw 26% growth in the revenue, whilst sustaining it's profitability despite very challenging cost of key raw material. However, profit before tax for the period increased marginally by 7%, when one-off capital gain in the previous year is excluded. Profit after tax increased by 6%. Group Balance Sheet remains strong with 16% increase in it's net assets per share. Large capital investment were made during the year in expanding capacity in both Indonesia and Thailand.

Key Financials (in millions)

Revenue --> 6,400.23
Gross Profit --> 1,610.83
Profit Before Tax --> 724.19
Profit After Tax --> 574.34
Equity holders of the company --> 505.08

Ratios & Statistics

Number of shares - 29,712,375
EPS - 17.00
Market Price - Rs.138.50
PE ratio - 8.15
Net Asset per share - 98.14
ROE - 19
Dividend Per Share - Rs5/-

Market Value
31-03-2010 - Rs 160.00
12-31-2010 - Rs 168.50
31-03-2010 - Rs 155.50
Current - Rs 138.50

15-09-2010 - Rs 219.50 (52wk Highest)
27-06-2011 - Rs 137.60 (52wk Lowest)

Top share holders list
Hayleys PLC - 67%
Employees' Provident Fund - 3.16%
National Savings Bank - 1.69%
Mouldex Ltd - 1.29%
Employees' Trust Fund Board - 1.18%
Public holdings - 32.10%

SRL 1,000 invested in Haycarb shares in 1975 is worth SRL 5,100,000 in 2011
(Extracted from annual report 2010/2011)



Last edited by Monster on Fri Jul 01, 2011 12:56 pm; edited 3 times in total

2Haycarb PLC Empty Re: Haycarb PLC Fri Jul 01, 2011 3:05 am

Slstock

Slstock
Director - Equity Analytics
Director - Equity Analytics


Yes, this is good company under Hayleys ( as you showed).

I held HAYC one time and disposed and recently also under my Watch List as the current prices are attractive.
But the concern was the varying earnings due to Cost of Sales which was on the decrease every quarter
since June 30 2010. Am also waiting for June quarter earnings to see the direction.

However the share is currently undervalued and your good post highlights it value.

3Haycarb PLC Empty Re: Haycarb PLC Fri Jul 01, 2011 3:33 am

Monster

Monster
Senior Vice President - Equity Analytics
Senior Vice President - Equity Analytics

Correct. The concern was cost of raw material. Company has forced to import nearly 50% of raw material from India and Indonesia. Shortage of raw material in 3rd quarter and 4th quarter in was mainly due to poor harvest, which has caused due to bad weather in the island during the period. If you look at 3Q and 4Q income statement, there is a improvement in revenue and gross profit.

-------------> 3Q --> 4Q
Revenue -----> 1,619 million--> 1,668 million
Cost of Sales-> 1,296 million--> 1,186 million
EPS ----------> Rs 3.00------> Rs 3.74

Besides revenue is growing, company was able to reduce the cost of sales. It will be interesting see how can they retain this in 1QFY11.

Further, company is planning to expand coconut plantations to ensure raw material availability.
http://www.lbo.lk/fullstory.php?nid=1496076816

4Haycarb PLC Empty Re: Haycarb PLC Fri Jul 01, 2011 12:24 pm

glwking

glwking
Manager - Equity Analytics
Manager - Equity Analytics

Good post. Presently it's trading in attractive PER. I should add to my watch list. But day by day it's going down. What would be the supportive level?

5Haycarb PLC Empty Re: Haycarb PLC Fri Jul 01, 2011 12:25 pm

Rajitha

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

Monster wrote:

SRL 1,000 invested in Haycarb shares in 1975 is worth SRL 5,100,000 in 2011

you forgot to mention how they keep getting lower EPS compared with last years due to huge amount of raw material cost which keep getting worse!

Also that last sentence is quite misleading for the people who are not that familiar with the Sri Lankan situation! For example my parents bought a perch of land they we live
in 1980 at rs 1050 Now the value is over Rs 1,000,000. So i'm sure the value of money before 1977 was even cheaper! so buying any good Colombo land back in 1975 for Rs 1000 now would earn mroe than Rs 510000!!
Not to forget even if you put that cash in a fixed deposit back then with over 25% interest rates back then people could have gained over 100 times of what they had!



Last edited by Rajitha on Fri Jul 01, 2011 4:59 pm; edited 1 time in total

6Haycarb PLC Empty Re: Haycarb PLC Fri Jul 01, 2011 12:54 pm

StocksWatch


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

Monster wrote:Correct. The concern was cost of raw material. Company has forced to import nearly 50% of raw material from India and Indonesia. Shortage of raw material in 3rd quarter and 4th quarter in was mainly due to poor harvest, which has caused due to bad weather in the island during the period. If you look at 3Q and 4Q income statement, there is a improvement in revenue and gross profit.

-------------> 3Q --> 4Q
Revenue -----> 1,619 million--> 1,668 million
Cost of Sales-> 1,296 million--> 1,186 million
EPS ----------> Rs 3.00------> Rs 3.74

Besides revenue is growing, company was able to reduce the cost of sales. It will be interesting see how can they retain this in 1QFY11.

Further, company is planning to expand coconut plantations to ensure raw material availability.
http://www.lbo.lk/fullstory.php?nid=1496076816

Thanks for highlighting this Monster, yes there seems to be some improvement in the form of increased revenue and reduced COS. As slstock also mentioned above, would like to see the results of the next quater to confirm this trend.

The price of coconut nuts has been falling lately in Sri Lanka, but the price fluctuates a lot depending on the production, demand, weather conditions and insect issues etc. See this article as well.

http://lakbimanews.lk/index.php?option=com_content&view=article&id=1723%3Acolombo-coconut-prices-drop-to-rs25-rs35&Itemid=56

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