if the war comes to an end that will also help STCM in a way. Its been savage for AIM equities the last 3 years. |
 The new road runs past Astana. The new rail line is in the south but could still stimulate demand, sucking supply from central areas that Steppe can then infill.
Cement tends to follow the economic cycle, anyway, and that has been looking very strong. Car sales have been booming (up over 10% on last Dec, itself up almost 20%) , retail sales very strong (+16%) and the stockmarket rose about 26% last year. Things have actually started looking a little bit frothy for a couple of months and the central bank lifted rates 1% to 15.25% at the end of November. We saw record cement sales nationally in Q4. (Don't know If STCM's were.) Weather will determine Q1 but Jan and Feb are always so low that they don't matter much. March weather will start to matter (hoping for early Spring) and the recent strong trend suggests record cement output is possible. The economy seems awash with cash. Bank balance sheets were up 19.8% in December and M3 +19.3% as a strong lending run continues. Like I said, getting a bit frothy - but conditions likely to produce further improvement for STCM after finishing with an apparently strong Q4 which I hope to see confirmed in results. |
Not the same part of the country though. |
that will require plenty of cement ha |
Kazakhstan, Uzbekistan to build a highway for $172 million
The construction of the Kyzylorda-Uchkuduk highway is planned to begin in 2025. |
Kazakhstan to build 4,700 km of new national highways |
The government of Kazakhstan has announced ambitious plans for the development of its rail network over the next several years as part of the plan «For the development of railway industry in Kazakhstan until 2029». The initiative involves repair of about 11,000 kilometres of tracks and building about 5,000 kilometres of new tracks.
[...] |
A couple of largish buy trades late on. |
Spring is on the way and is starting to show, even Astana has been very mild this year so far |
the free float is very, very small, limited and tight as the proverbial DA |
In the Idle time one can contemplate the clinker stock reduction programme giving improved margins and improved cash position, and capital returns in excess of 1.5p
Wonder if the family of the Company's Chief Executive Officer, Javier del Ser Pérez has orders in at 14p ?
Or Perhaps the turn again for David Crichton-Watt ?
Either way the free-float looks tight. |
Nothing exciting or interesting now until May through September with the peak in August/early September when surge pricing kicks-in. |
It seems all of the IMF, EBRD, IFC, World Bank and ADB etc are all positive on the Kz macro-economic outlook for 2025: hxxps://www.worldbank.org/en/country/kazakhstan/publication/economic-update-winter-2023-24 |
Kazakh national cement production finished the year strongly. Dec was 9% higher than last year and beat the previous highest December by 2%. Q4 was a new record for the final quarter but we've already seen STCM Q4 volume was up 28% so that's no surprise. I suppose STCM's Q4 volume might have been a record but somebody else can check. I've broken out enough numbers and am more than happy with +28% even if the market just doesn't seem to care.
Now we know the whole cement market strengthened as the year progressed, in line with general economic activity. Dec GDP growth rose again to 6.2% and was the second highest month in 13 years. (Average since 2008 is 3.2%) Retail sales rose again to +15.7% in December. (14-year average 7.0%.) The stockmarket jumped around 4% in January to another new record. Car sales rose 3.5% to a new record, with the trend strengthening in the final months. This should all bode well for cement demand and pricing in 2025.
I continue to hope the next payout will be increased. |
I agree, it’s a good business, but it faces this headwind - particularly at the moment which no doubt is why the company drew attention to it. |
With a higher CPI target (4-6%), Kazakhstan has always depreciated against £ and $ and likely always will. Currency depreciation did not stop STCM making profit and distributing well over the current market cap as hard currency payouts (LOL) to shareholders in the last decade . |
On balance and despite a weak market, STCM is profitable and unlike so many companies that aspire to return monies is currently providing a 10% yield. On this basis, there is plenty of attraction. |
A structural problem with STCM is that its revenues are in a long-term depreciating currency against both the $ and even against £. Whilst that also applies to its costs too, margins expressed in $ will be continually squeezed by this currency effect. Much better to invest in a Kazakh-based business whose cost base is essentially in KZT but its revenues priced in $. As KS says, revenue growth over time is mostly due to high inflation, which itself is partly due to sustained currency depreciation. The latest update draws attention to a 13% depreciation against the $ from the 2024 average rate to the current KZT rate. |
They said costs had stabilised in Q3, after a problematic period of rising costs interacted badly with weak demand and prices. It seems all the problems affecting margin may have reversed to some degree. Revenue is +30% in USD in Q4 and more in KZT. I think it is reasonable to speculate on a significantly increased margin in Q4. |
The pertinent graph is shareprice against profits. Shareprice against revenue is meaningless without also including costs? It is bottom line that matters.
Revenue growth can be entirely inflationary.
Since production is broadly flat over the last 10 years you need increasing margin to be better value - that comes from efficiency - ensuring cost growth < revenue growth. |
You should draw the share price graph next to that
you will see an inverse type graph
so where is the correlation between revenues growth v share price?
Honestly the performance here has been shocking over the last decade plus, that's if you did not use stop losses to buy low sell high
just an unloved sector and region? |
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