Steppe Cement Share Discussion Threads

[wilo101] 08/8/2016 13:10

In reality it is a very thin and small market, if anyone ever tries to seriously buy, will immediately increase by 10-50%

[azalea] 08/8/2016 08:48

Firebird Funds mops up 2,664,199 of the 6,100,386 shares recently sold by Genesis Asset Man, taking its stake to 11,768162 5.37%

[wilo101] 07/8/2016 05:30

and Bill helped Frank Giustra lobby for and acquire uranium mines in Kz, which made a huge fortune and became Uranium 1, now owned by EossAtom!!

[azalea] 06/8/2016 12:56

Just been watching a very recent interview by 'Going Underground' British journalist Afshan Rattansi with Julian Assange, covering the 20,000 leaked emails leaked which have come into the hands of Wikileak. One of the issues that came up was Hilary's involvement with Lafarge(at one time on the company's BoD} and Lafarge's connections and dealing with ISIS, in Libya.

[wilo101] 06/8/2016 08:29

Mr Azmi will not sell until there is full value realised, which is at least US$2.50c per share, he last sold half of his holding at GBP3.26p,and has been buying back ever since the price went to GBP0.25p, thus he now has more than his original holdings.

Buy whatever stock comes into the market, as this is more than a 10-bagger.

[azalea] 05/8/2016 18:15

Some large trades today, possibly broker to broker. Interesting as to what might be behind them.

[azalea] 04/8/2016 10:43

wilo101 latest post takes a comprehensive look at the big picture regarding finances and values of cement companies in the region and Europe. Against this backdrop there are two other factors that one has to consider.

1. What is Mr Hamzi Wan Hamzah going to do with his 28.71% stake? The most logical answer is that he is going to sit on it until a bid arises and in the meantime begin to enjoy the dividends that will inevitably arise as the company begins a journey of producing rising profits and positive earnings in the years ahead.

The other factor,which I have already covered in previous posts, is the political and strategic battle arising out of China's claim to a group of islands in the South China Sea. Long term sanctions imposed by the U.S. against those insuring oil tankers and their cargoes, would bring into much sharper focus China's existing plans to build an overland rail route from Iran across central Asia to China at its border with Kazakhstan. The construction of such a route would not only require huge amounts of cement but also make STCM an increasingly attractive bid target.

2015 results which highlight a number of areas in which STCM is making notable progress, are well worth a read and can be summed up by the reduction in Eps losses from -3.6p to -1.5p. These losses will continue to be reduced, following the continued exclusive and increasing rates of production from dry lines 5 & 6.

[wilo101] 04/8/2016 02:36

STCM is the holding company of Steppe Cement (Malaysia) Sdn. Bhd, which, in turn owns Steppe Cement Holdings B.V., which in turn own the two operating companies, Karcement J.S.C.(“Karcement”, the owner and operator of 2 dry-lines, with a production capacity of 2.4mtpa), and JSC Central Asia Cement (“CAC”, the owner and operator of the 4 wet-lines, mines, equipment and other infrastructure, with a production capacity of 900,000mtpa), which form the cement manufacturing and mining complex at Karaganda in Central Kazakhstan, close to Astana.
STCM is the closest plant in Kazakhstan to Astana (1.5 hours by car), enjoys free-of-charge slag from the blast-furnaces at Arcelor-Mittal and cheap coal, and thus energy from Karaganda and Ekibastuz. It has its own lime-stone and clay mines, with reserves for 150 and 1,000 years, respectively.
STCM was listed on the AIM in London in September 2005. More than 60% of the shares are indirectly ultimately owned and controlled by the four founders, and has been since July 2004. Those founders are buyers, not sellers, and previously sold 50% of their shares for £3.20p per share in April 2007, when there were 115m shares in issue, thus valuing STCM at £368m.
Currently STCM has 219m shares in issue and very few shares are traded because it is tightly held. The current screen price is £0.25p per share, giving an apparent market capitalisation of £54.25m, but this bears no resemblance to the real value of STCM, and can be ignored for all practical purposes.
CRH Plc (hxxp://www.crh.com/) recently purchased US$6bn of assets from Holcim (hxxp://www.holcim.com/) and Lafarge (hxxp://www.lafarge.com/en) upon their merger and paid 8.5times EBITDA. The merged entity is now called Lafarge Holcim.
Heidelberg (hxxp://www.heidelbergcement.com/en) paid US$1.45bn on acquiring 45% of Italcementi (hxxp://www.italcementigroup.com) and Ciments Francais (hxxp://www.cimfra.fr), which valued the company at US$3.7bn, and which transaction was recently completed.
This included the cement plant at Shymkent. As a result, Heidelberg now owns three plants, Bukhtarma, Shetpe and Shymkent in Kazakhstan, which will enable it to increase prices and margins, and which will indirectly benefit STCM.
Vicat of France (hxxp://www.vicat.com/), financed by itself, IFC and Calyon built and completed a 1.1mtpa dry-line plant in Kazakhstan at Lake Balkhash, called Jambyl Cement for €400m (excluding land acquisition costs).
Heidelberg of Germany (hxxp://www.heidelbergcement.com/en), financed by itself, IFC and EBRD also spent €350m on a 800,000tpa dry-line plant at Shetpe in Kazakhstan, called Caspi-Cement (again, excluding land acquisition costs).
The only logical way of valuing STCM would be on a replacement cost basis.

It would not be possible to replace STCM’s plant, represented by 2,400,000tpa modern dry-line capacity (2 dry lines side by side, recently commissioned), and the original 900,000tpa wet-lines (4 wet lines side by side) annual capacity, for less than US$150 per ton (with Chinese equipment), and perhaps US$200 per ton using western design, plant and equipment.

For STCM, with the completion of the 2 new dry lines in 2013-15, the construction and financing risk is now over. No other plant in Kazakhstan has 2 dry lines side by side. The plants at Kant in Kyrgyzstan, Novotroitsk in Russia, Semipalatinsk in Kazakhstan all of which still have the old wet-line capacity will have to modernise or face closure. The recent recession in construction since 2007 and the KZT devaluation seems to have put a stop on the other planned plants.

If in valuing STCM we discount the value of the 4 wet lines, by half (given their age and the old wet technology), we think that STCM would be more correctly valued as follows:

4 Wet Lines, capacity 900,000 t/p a @ US$150 x 50% US$75m

2 Dry Lines, capacity 2,400,000 t/pa @US$175 US$420m

Limestone and Clay Mines, Infrastructure, Wagons and Equipment US$45m
Less: debt US$5.5 m to VTB, to be fully repaid by 31.12.16
US$10m to VTB for wagons, due in 2021.
US$4.5m Bond issue in KZT due 11.17
US$4m subsidised DAMU loan at 6% in KZT for 10 years, due 2026
Total Debt = US$24 m (by 31.12.16 it will only be US$18m, and it will be fully repaid by 31.12.17, if not before)

Enterprise Value at 31.12.15 US$516m
Value per share: 219m shares in issue US$2.356c per share


Whilst this might seem considerably more than what the AIM market currently values STCM at, any of the world’s cement manufacturing majors who do not have any assets in Kazakhstan, such as CRH Plc, Holcim-Lafarge, Cemex all of whom are keen to enter the Kazakh cement market and regard STCM as the best company and plant will be willing to pay such a price for the following reasons:

1. it is no more, possibly quite a bit less, than what they would have to spend to build a new plant, as proven by Vicat at Balkhash and Heidelberg at Shetpe, adopting their cost the true value of STCM would be more than €800m;
2. it would save them at least 2 to 3 years of site identification, planning and execution before the first kilo of cement is produced;
3. if they did not buy STCM they would be competing against STCM, which is Kazakhstan's most centrally located, lowest cost and most efficient and competitive cement producer;
4. STCM already owns its own fleet of new railway wagons and storage terminals, all of which were bought recently;
5. the accounting profits STCM suffered badly from the devaluation of the KZT in 2015, however, its EBITDA of US$22 m in 2015 (2014: US$17m) should see all of STCM’s borrowings eliminated by the end of 2017, if not before, allowing for the payment of generous dividends, possibly even commencing in 2016; and
6. this value is modest compared to the purchase prices paid in the recent transactions referred to above.

Accordingly, it is clear that the only correct way to value STCM is on a replacement cost basis and that US$516m is a reasonable current enterprise value.

[wilo101] 27/7/2016 04:29

Word on the street is that there might, yet, be a dividend this year. Especially as second half sales and prices may be much improved.

[wilo101] 24/7/2016 04:14

Total debt now down to US$24m (from a peak once of US$95m), with another US$6.5m to be repaid by year end, soon the company will be entirely debt-free and paying very, very healthy dividends, especially as and when unit prices improve.

[azalea] 22/7/2016 12:10

Bid =24.25p for a dummy sale of 40k

[azalea] 20/7/2016 07:24

3% relates to an initial holding.It can be less for existing holders.

[wilo101] 20/7/2016 03:23

Genesis sold 2.42% so there does not have to be disclosure, as such is below the 5% threshold.

[azalea] 19/7/2016 10:15

Given the current confrontation between China and the USA, and others protesting over the islands in the S.C.Sea,news that Genesis Asset Man has reduced its 16,079,909[7.34%] stake to 10,779,532 [4.92%], could be interesting. The question being , who bought them?

[wilo101] 19/7/2016 03:42

The stock will be upwards and onwards from here, ludicrously low price, must quickly get to GBP1 per share, and then who knows, even the UBO founders, owners and controllers are buying.hxxp://www.nytimes.com/2016/07/02/sports/soccer/russia-world-cup-stadium-rises-matryoshka-style.html?_r=0 and hxxp://www.sunherald.com/sports/article90244967.html and yesterday's FT piece at together with their friendly fund managers and supporters

[azalea] 18/7/2016 11:04

23.9p for a dummy 10k bid, suggests MM/buyer looking looking for stock.

EDIT: 1549hrs. Dummy 20k sell, gets a bid of 24.45P. Holding tight.

[azalea] 16/7/2016 10:44

Volume traded yesterday over five times 90 day average.

[wilo101] 16/7/2016 03:53

STCM must and will be completely re-rated, it is merely a question of time, not if. With the 4 key founders and controllers and then also the funds, Genesis, Neon, Firebird and Consilium, almost no stock is available, in reality less than 10% free-floats!

On a good day, and in a good market STCM could be worth almost US$1bn. Russia is normalising and so will Kz and the rating of stocks with assets and businesses here.

[azalea] 15/7/2016 09:55

A buy of 100k @ 24.5p, is interesting. As far as I can remember I have not seen that size of buy other than by a new/old major holder.

[wilo101] 15/7/2016 01:48

No bid has been made because the controllers and their UBO's will not entertain any bid or approach at anywhere remotely near these levels, Mr Asmi last sold half of his shares at GBP3.20p per share, and has since bought back them all, and even more,that was when the company was valued at GBP375m, but when it only had wet-lines, not the 2 new dry lines, side-by-side and other improvements, today.

[azalea] 14/7/2016 16:32

Lovelyjubly1
Who knows what might be going on behind the scenes. What I am sure of is that Mr Amzi Wan Hamzah, is not going to sit on his 28.66%, for ever. In F.Y. 2017 I am expecting to see the company in profit from its sales of cement. In FY 2018, the 300 rail wagons it bought for $15m, should also be making a net profit.

[lovelyjubly1] 14/7/2016 16:18

so why has this company not attracted a bid?
A £50m market cap company seems quite low if your going by those numbers.

[azalea] 14/7/2016 11:50

11/7
LafargeHolcim Ltd, said Monday, it had agreed to sell its interest in Lafarge India to local conglomerate Nima Ltd for an enterprise value of $1.4Bn.