Steppe Cement Share Discussion Threads

[mattjos] 24/12/2010 11:55

no probs .. i picked some up here yesterday. that volume day recently was a little suspicious to me & the chart is showing some more promising signs of late. Also came across an article lately suggesting cement capacity in the Kaz industry as a whole was falling which suggests Steppe might be fuirther gaining market share. Probably off most folks radar this one but happy to see where we go over the next quarter



One of the things i'm watching here is the KZT:USD exchange rate.
Steppe share price collapsed when the Tenge was devalued at the depths of the credit crunch, from 120:1 to 150:1

Recently the Kazakh govt has indicated it will remove the strict controls on the Tenge and let it move within a broader corridor ... a 6-8% revaluation has been indicated as they move to limit inflationary pressures in their economy.

The Chart link for the KZT:USD is shown here & already shows the rate has moved from 151 to 146:




Later this year Steppe will also decide if they will bring on-line their Dry Line 5

We will have to wait and see what the pre-lims have to say and the all important outlook statement, presumably at some point next month.

[arej] 24/12/2010 11:51

too much eggnog this morning - of course 2011, mattjos. thanks for pointing that out.

[mattjos] 24/12/2010 11:50

2012 or 2011?

[arej] 24/12/2010 11:32

one of three small caps picks for 2012 in shares magazine. the article acknowledges the problems with debt and the kazakh economy that have held the share price back but suggests 2012 could be a good year.

[thebull3] 20/12/2010 08:53

small tick up, but the spread is shocking @8p or 20% of mcap

[arej] 30/11/2010 13:06

quietly, quietly...

[arej] 23/11/2010 12:38

something stirring

[thebull3] 19/11/2010 16:30

is it finally going to breakout of downward trend? some decent buys might do the job

[scburbs] 08/11/2010 19:18

Market share seems to be going well at the moment. However, it is clear that becoming cash flow positive and profitable will be the key drivers of any share price re-rating. Still very highly geared even after the placings. Hopefully the Chinese will try and corner the world's cement market and send the cement price up as they could do with a higher price!

"For the first 9 months of 2010, the cement market in Kazakhstan increased by 8% compared to the corresponding period in 2009. Steppe Cement estimates the cement market for 2010 to be 5.4 million tonnes. Imports into Kazakhstan declined to 20% of the total market from 23% in the corresponding 9-month period in 2009 while Steppe Cement's market share increased to 21.5% from 19% in the corresponding 9-month period in 2009."

[arej] 08/11/2010 16:49

bookiebuster, you are right that the debt is a problem and has been the reason for the placings, which have been imposed on the company. but to say that placings through two of the most difficult years for many decades are the norm seems a bit unfair. construction crashed in kazakhstan but is on its way up and if cement demand increases and cement prices increase, which seems reasonable to expect, then stcm is in a good position to claim a sizeable chunk of the market. my understanding is that to build the cement facilities that stcm has would cost upwards of £500m so a market cap of £80m with some £50m of debt still leaves some room for growth. of course it all depends on how quickly demand for cement picks up in kaz. a lot of ifs and whens, of course, but that is why they call kaz a frontier market and why the share price is where it is.

[thebull3] 08/11/2010 16:37

Thanks for all the info chaps!

[bookiebuster] 08/11/2010 16:00

The issue is the high level of debt, $81m in Jan 2010 from $92m in Jan 2009

The business is not cash flow positive ($4m loss in H1 2010) so the debt is being paid down through placements which is never good. The share capital has doubled since 2009. With 80m shares by Q2 2009, 40m shares were issued at 25p and 34m at 40p last month.

This dilution is the main reason for the share price slump and a big placement each year seems to be the norm. The refinancing has deferred loan repayments but pushed up the interest rate on the debt from 4.5% to 6.25%

In terms of market share of the Kazakh cement sector, Steppe had 32% in 2000, this was down to 18% in 2009 so they also appear to be getting squeezed by local competition.

[thebull3] 08/11/2010 15:07

thank you for your comments Arej! I going to buy a few and see if theres any further price weekness!I dont think theres to many shares around from what my broker informed me!

[arej] 08/11/2010 15:03

thebull, i agree that this company only has one way to go. small kazakh companies still tend to be seen as extra high risk at the moment - see bbs for sunkar and hambledon, eg, for frustrated shareholders, though each has its own particular story and both seem now to be on the rise. steppe is closely connected to the kazakh economy. in the crash construction dropped massively but it is beginning to pick up again. if the world economy stays ok, commodity prices stay high, then cement will be back in demand in kazakhstan. there is a new silk road being built, more railways, and my information is that real estate construction will really pick up next year. this is still a bit of a long hold, probably won't start making good money until next year, but it hasn't diluted that much and there is no reason why the share price shouldn't return to pre crash levels, at some point. it was at 80p only a few months ago but has fallen right back and i think is a great buy if you are prepared to salt it away for a year or two. i'd be buying more but i started buying in the 30s and already have a large chunk of my investments here. the placing seems to have been well taken up. imho and dyor of course

[thebull3] 08/11/2010 14:46

This looks like a good solid sound company to me. Doesnt seem to be much interest in the shares though, were once at £3 placing recently at 40p, surely these rate a good buy reading through the news etc.. Anyone shed any light on the companys poor share performance?
Directors seem confident!

[darcon] 13/8/2010 07:57

In the Key Date section on my internet broker account it says the next interim announcement for STCM is going to be on 3 September 2010.

[arej] 26/7/2010 20:31

travis, now's your chance again. i started buying at around 34p last year, saw it hit 80p and come back into the 40s now, but not too bothered as in this for the long haul. am i right or wrong? only time will tell. not quite sure why i'm writing this as no-one else seems to be out there but at least it entertains me.

[jonno1] 24/7/2010 15:09

TravisRiley - 24 Nov'05 - 09:06 - 3 of 127

it's amazing and I seriously considered buying some at 50p, but after reading the admission document I decided it was too risky as the plant was very old and health and safety regulations in Kazakhstan are non existent. How I regret that now.

[marvin9] 19/7/2010 18:34

iTS PROBABLY MAKING MILLIONS PROFIT, ONLY PROBLEM IS ITS CORRUPT