Monday, March 31, 2014

Kotra (Huge Debts)

It awaits approval for two manufacturing projects to be made EPP3 under the government’s ETP.

In Dec 2013 it secured its first project for the manufacturing of sterile infusion under EPP3 and expects to see revenue come in progressively over the next five years from 2014.

As at Dec 31 2013 the company’s net asset per share was at rm0.82.

It had recently appointed Pharmaniaga Bhd’s former executive director and MD Azhar Hussain as its chairman. He was also Kotra ndustries’ non executive director.

It is currently (27 March 2014) trading at 22 times PER which is even higher than Pharmaniaga’s business which is showing profit …. At 21 times PER.

When compared with other pharmaceutical companies such as YSP, CCM and Hovid whose PER range from 11 to 14 times.

Its performance has been volatile these past few years. It had recently turned around its business, posting a net profit of rm17000 for the second quarter ended Dec 31 2013 against a net loss of rm1.86 million a year ago.

It posted a net profit of rm1.12 million and rm3.69 million in 2012 and 2013 but incurred a net loss of rm2.14 million for 2011 and a net profit of rm11.72 million in 2010.

The company has a total debt of over rm126 million as at Dec 31 2013. In terms of cash, the company has only rm10.1 million as at Dec 31 2013.

Observers opine that the company has difficulty turning a profit as most of the earnings go to pay back its debt. The company needs to restructure its debts.

The company may invite a shareholder to inject some assets or funding to lower gearing level.

Its MD links the volatility of the business to its transformation plan which began five years ago cost about rm350 million.

It is targeting to increase its contribution of export markets from 35% to 80% in three years to five years from 2014.

The EPP contracts could be a catalyst for growth.

Ancom: Datuk Siew Ka Wei, its group MD was seen to be continuous his purchase of Ancom shares. He now holds a 8.79% stake in Ancom with another 9.53% indirect stake in the company making him the largest shareholder in the company.

General Insurance player P&O Bhd is the largest shareholder with a 19.64% stake.

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