ACCESS ENGINEERING PLC (AEL.N0000)

smallville wrote:

greedy wrote:

(This one of gain has been ignored by the research person)

Was it accounted in for most of the IPO research docs from broker up to now?

'tis purposely done to bring a valuation attractive IMO...

Finally this is also a mess..

I don't read much IPO research documents from broker firms but glanced through this one. The best practice is to take off one off gains and "Normalise" earnings in calculating P/E ratios. As per the research document, P/E ratio is 20.37 based on 2011 earnings. However, if we eliminate this irregular gain, P/E ratio would be 29 times.

refer page number 109 in the prospectus (4th line item in the income statement).

How the new rule on IPO is going to affect Access....?

Refer this post...http://forum.srilankaequity.com/t16562-amendments-to-listing-requirements#108425

1) Shares held by promoters and all other shareholders prior to an offering to the public shall be locked-in for a period of 09 monthsths from the date of listing of shares on the CSE

2) A public company which has allotted shares within a period of one year prior to the date of the initial application, all such shares shall be locked-in for a period of 12 months from the date of listing on the CSE.


It is good to see that existing share holders also have a lock-in period as opposed to previous rule which applies to shares allotted on Private Placement.

Is this new rule applicable after 1 April 2012? If that is the case and Access get a listing date before this date, the new rule will not be applicable to Acccess.

Any views on this?

http://forum.srilankaequity.com/t16598-gossip9-about-access#108648

Most market analysts tip the Rs. 500 million Initial Public Offering (IPO) of Access Engineering Ltd., which officially opens on Tuesday 6 March, to be comfortably fully oversubscribed, whilst several brokers too have recommended it.

Lanka Securities, which recommended the Access Engineering IPO as Subscribe, said the forecasted EPS for FY12E is Rs. 1.7 and BVPS stood at Rs. 11.7. Accordingly, the forward PER and PBV for FY12E are 15.0x and 2.1x respectively (at IPO price of Rs. 25.0).

Heavy construction sector is currently trading at a PER of 10.2x, while close peers such as Colombo Dockyard and MTD Walkers are trading at PERs of 9.3x and 14.3x respectively.

Lanka Securities also said based on a complete valuation carried out using discounted free cash flow, the calculated total equity value for the group is Rs. 27.7 billion at the end of FY12E.

Accordingly, the derived value per share of AEL is Rs. 27.70, an upside capital gain of 11.0% over the issue price of Rs. 25.00. “Hence, for a rational investor with a long-term perspective, AEL’s IPO price is justifiable and we recommend Subscribe,” Lanka Securities said.

It is forecasting a net profit of Rs. 1.7 billion (+43.0%) and Rs. 2.1 billion (+25.2%) for FY12E and FY13E respectively. The increase in net profit is mainly driven by the accelerated infrastructure development activities in the country.

The revenue is anticipated to grow at a rate of 76.9% and 37.3% in the next two years supported by the booming construction industry. The construction industry which saw a sluggish activity in recent years is now facing a 9.3% (in 2010) upturn with the mega infrastructure projects undertaken by both government and private sector.

LSL said key risk factors would be possible inflationary economic conditions (e.g. rupee devaluation, increasing interest rates, increasing inflation, etc.) and it may affect the construction cost to increase over the period.

Given AEL’s sound business relationships and impressive track record, Arrenga Capital expects the Group to thrive on future prospects in the construction industry in line with infrastructure development in the country.

“Hence, we expect AEL to record net earnings of Rs. 1.8 billion for FY13E and Rs. 2.6 billion for FY14 featuring a PER of 14.0X and 9.7X respectively,” it said.

The counter, which is in a high growth industry, is offered above market valuations at a price of Rs. 25 per share on FY13E earnings (4Q Trailing Market PER of 11.0X), Arrenga added.

Asia Wealth Management forecast AEL earnings to be Rs. 1.58 billion for FY12E whilst FY13E earnings would remain at Rs. 1.99 billion.

“We expect the company to perform much better with the upcoming construction projects in the pipeline coupled with significant potential in the high-geared construction industry in the country,” Asia Wealth said.
AEL on a forecasted net profit of Rs. 1.58 billion for FY12E, accounts to a PE multiple of 15.8X. Furthermore Asia expects 12.5X and 9.7X on its FY13E and FY14 earnings respectively.

In addition the counter currently trades on a PBV of 5.5X, which we anticipate would improve to 2.1X by the end of FY12E. As opposed to the Construction sector PE of 10.6X and PBV of 1.6X.

“It is noted that based on the financial analysis and the forecast we have done, AEL is clearly a fundamentally strong counter that we could recommend to “SUBSCRIBE”,” Asia Wealth Management said.

However, the broking firm said if gifted shares to employees are sold in the secondary market subsequent to initial trading there could be downward pressure on the share price.

Access Engineering, which made its foray into the motor business with a Rs. 846 million acquisition of a 60% stake in Sathosa Motors, is offering 20 million voting shares at Rs. 25 each.
http://www.ft.lk/2012/03/05/brokers-recommend-buy/#more-75080

Dear Friends,

I kinda have AEL share with me which I invested at IPO.. jst want to know your expert view and suggestions whether there is any positive signs in the share or should i exit and at what price?

Thank you

AEL good share hold on ! next few quarters should be good .

http://forum.srilankaequity.com/t27657-sri-lanka-access-group-to-build-us12mn-25-floor-office-tower#161241

sabi wrote:Dear Friends,

I kinda have AEL share with me which I invested at IPO.. jst want to know your expert view and suggestions whether there is any positive signs in the share or should i exit and at what price?

Thank you

If you are not on credits don't be panic. This is one of the best value shares. Just keep watching how it grows. If it comes down average it. This won't let you down.

AEL, a gem in the making.

they gave shares for their staff free of charge when they list. may be a reason for this much drop

There are 46 people with more than a million shares. 

There are a 192 people between 100,000 and a million shares

Are the local contracts over?
I dont think there is more work to be done by AEL unless they get other contracts.

Remember GREG. Money can go abroad for expansion and never come back. Overseas Investment in the pipe line.

Rocky wrote:Are the local contracts over?
I dont think there is more work to be done by AEL unless they get other contracts.

Remember GREG. Money can go abroad for expansion and never come back. Overseas Investment in the pipe line.

AEL has a huge order book! Its set to do really well

Too much retailers want to make quick buck,after seeing interest or some making promo.....when ASPI is in RED these retailers selling off, couldnt be that the reason why prices fallen on friday.
just my 2c.
I could be wrong .......
TAH

I analyzed it more...I too think this i a good counter... (Not a buying or selling idea...Do you own analysis), Thanks.

I bought today AEL.N @25 any idia ?I think it will run next week @27  

yes. Good buy. Captain has bought 5 mn AEL shares...
You might have got the info before me   

Yes AEL is in a CLEAR BULLISH pattern.... But a slow mover ne

im collected @ 23.70... Hope this well reach to 30 . End of this year

shadow walker wrote:im collected @ 23.70... Hope this well reach to 30 . End of this year

net asset base over value,....P/E based ok....slow moving counter....at least 26-27....ipo price passed huge selling can come in 26....

it might run to 50-60 levels

anges
50 - 60 it could be.. For that AEL has to go soo far.. But ithink 50 is tooo high..

Set all things aside we all can see that there is a vast development in Road and other construction.Definitely will help AEL.

anges wrote:it might run to 50-60 levels

are u crazy....without any proper analysis...how do u say AEL touch 50.....my prediction 26-27 range some times again down trend bcz crossing is over news over

shadow walker wrote:im collected @ 23.70... Hope this well reach to 30 . End of this year

sure... it will

hey guys what is your valuable idea about this share?
Is it worth to buy more shares in this price?
As my broker this will go to 37..

RAAP pls comment on this

buddhika.naween wrote:hey guys what is your valuable idea about this share?
Is it worth to buy more shares in this price?
As my broker this will go to 37..

RAAP pls comment on this

Now AEL has become a trading stock as it has exceeded it's fundamental value. On current earnings 30/- max. But some talk about some deal @ 40/-. That is speculation as it may happen & may not happen............

What we should do is to trade with it. Buy Monday morning & sell tomorow morning max at a profit or loss to minimize the risk.

Agree with RPPA. Good share for trading with all the govt contracts in their reach. Not a long term prospect because if they don't get paid with all these government borrowings, you will be left in the lurch. Remember what happened at Waters Edge.

thanks both of you RAAP ayya and bandulawee.I'll not keep it long time I hope to sell it within next week