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i bought esceram, not because glove business. i bought esceram because its cement mixer business. its cement segment is proven profitable. look at another cement mixer company, their profit reach 20% of total revenue.
if esceram total revenue 110m per quarter, in the future their profit could reach 15m.
my target price for esceram is rm1.00 at least. if this counter transfer to main market, probably could reach rm2.00
corporate actions done. accumulation started. looking forward to q2'25 with the expectation of higher contribution from manufacturing segment; assumption of demand for glove formers to increase in tandem with higher new lines setup / utilization by the top 4 glove manufacturers.
Cheng whats your view on the latest qr ? The report mention that the profit decline due to disposal of land on prev financial year? What does it mean lol .. hope u can share some thoughts
hello pp wong. The plus side: manufacturing segment revenue - glove formers which is a high margin segment continued to pick up sequentially month over month in FY24 and going into FY25. The minus side in this quarter performance is building materials - ready-mixed concrete. Evermix is a high revenue low margins segment for Esceram and the normal profit margins is between 1% to 2%. Last quarter was low which is below 1% despite higher revenue from Johor region. As for the profit decline, it is comparing to last year (Q2FY24). There are two entries in the cash flow statement (1) non-cash 3.8M at cash flow from operating activities (2) proceed from disposal of 8.1M at cash flow from investing activities. These should be related to the disposal of land; hence, higher profit in Q2FY24 compared to Q2FY25. Looking forward - its a question of whether margins compression for building materials will persist (quarterly profit less than 1M) or back to normal (above 1M). Can also monitor the results from the more established players for ready mix concrete - humeind or mcement for signs of industry margins. Just my opinions, could be wrong. Hope it helps.
You are welcome, pp. Will be doing the same too, to determine whether its a temporary margins compression situation or becoming normalized margins; to consider revenue growth at the back of margins instability risk if you will.
Cheng, besides the revenue and profit, the cash in hand is reducing while the trade receiveable increase that may bring high amortisation in future. They should improve of debt collection. Furthermore, minimum wages kick start next month that can increase the costing, seem likes they are hardly to push the cost to their customers. The bright sight is there is recovery of glove segment.
indeed, sws. they will have to push the cost to customers at some point of time. as for minimum wage, evermix has about 290 employees including management; 150 ee are foreign workers. Looking at high side impact of 60k; 300*200 and did not exclude those higher than 1700 salaries. Should be manageable.
Wah... andy going all out on construction counters? gadang, trc and now esceram. Penang LRT, KL-SG HSR, MRT3 and other infra projects are indeed a booster to the industry. Hopefully no delay for these projects.
I have reduced my positions in QES and Cnergen, Andy. Cnergen end of last year and recently for QES. Will probably take another 3 months before looking into tech sector again. External factor: That's based on the assumption that tech sector correction is done deal by then and trump's policies are in place. Internal factor: The construction and fit out of the new integrated facility is targeted to complete by this year and seems a bit slow judging by the capex for ppe. Demand for its proprietary smart factory solutions is also taking a bit of time to pick up. Total order book (smart factory soutions + SMT eq) on hands ~40M; will be nice if it goes higher :) On the other hand, boss's bro (ex head of investment bank) seems to be buying recently. Keeping an eye on that :)
