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Sri Lanka Equity Forum » Stock Market Talk » Swisstek (Ceylon) PLC - A Growth Stock

Swisstek (Ceylon) PLC - A Growth Stock

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1 Swisstek (Ceylon) PLC - A Growth Stock on Fri Feb 12, 2016 7:51 am

EquityChamp

avatar
Moderator
First topic message reminder :

Background
The company is specialised in manufacture and sale of Tile Mortar, Tile Grout, Skim Coat, Decorative Pebbles and Aluminium. With the change in management style and dynamics after the Lanka Walltile group is acquired by Vallible One the company has embarked on an aggressive expansion plan with the hope of gaining market share rapidly year by year.
Opportunities and Challenges
 The company see endless possibilities in the market for its growing product portfolio where the business volumes are expected to rise rapidly with the boom in construction sector.Further,  the re-introduction of solid wood flooring under the SWISSPARKETT brand name is expected to show future growth in this area of business as well.
Main threat will come through cheap imports after the proposed reduction of import taxes on imported tiles. However, though it is yet to quantify the impact on the sales of domestic tiles, the impact on the sales volumes of Swisstek product portfolio will be lesser as the direct impact is on tiles.
Performances
Revenue grew by 25% to reach Rs1, 857mn in FY2014/15 and PAT grew by 114% to reach Rs252 mn. Company recorded revenue of Rs1, 885mn for 9months ended 31st December 2015 with a PAT of Rs232mn for the same period. Company has generated a ROE of an impressive 23% for 9months ending 31st December 2015. Given the projected sales growth and profit margins it is expected that the company will achieve a revenue figure of Rs2, 585mn and a PAT of Rs310mn for FY2015/16(E) and consolidated revenue of Rs3, 408mn and a PAT of Rs409mn for FY2016/17(E).
The company is a fairly geared company with a total gearing ratio of 46% as at 31st December 2015 with most of the operating cash flows are using for future expansion drives. Hence the company has not declared any dividend for the past few years and will not be declaring any dividend for the next couple of years as well.
Valuation
Given the projected revenues and profits and with the current market price of Rs57.9, the share is trading at a forward PE of 5.1x (based on 2015/16 earnings) and a forward PE of 3.9x (based on 2016/17 earnings). If valued at a 50% discount the sector PE the stock could be valued at over Rs140/- by year 2017.
Recommendation
This is a growth stock and is a strong BUY at the current market price hence investors are advised to start collecting from the current depressed market and hold.
Thanks


26 Re: Swisstek (Ceylon) PLC - A Growth Stock on Sat May 28, 2016 3:06 am

Yahapalanaya


Vice President - Equity Analytics
Vice President - Equity Analytics
PARQ is unique and leader in sector.It performed well even other competitors making loss.No need to worry about short term price fluctuations.This is still undervalued share.This cannot be compared with some artificialy promoted shares.Good shares will survive when price correction comes.

27 Re: Swisstek (Ceylon) PLC - A Growth Stock on Thu Jul 28, 2016 11:47 pm

EquityChamp


Moderator
Here comes the 1st quarter of 16/17. A profit of 79mn with a YoY growth of 173%. Phew...

28 Re: Swisstek (Ceylon) PLC - A Growth Stock on Thu Jul 28, 2016 11:53 pm

hiransilva23


Vice President - Equity Analytics
Vice President - Equity Analytics
Meket run ekak tiyei wage.EC meke kochchara witara reatil market eke tiyanawada??

29 Re: Swisstek (Ceylon) PLC - A Growth Stock on Thu Jul 28, 2016 11:57 pm

EquityChamp


Moderator
About 4mn shares . Anyway its a liquid counter.

30 Re: Swisstek (Ceylon) PLC - A Growth Stock on Fri Jul 29, 2016 7:07 am

EquityChamp


Moderator
I can see the signs for another up move in coming days.

31 Re: Swisstek (Ceylon) PLC - A Growth Stock on Fri Sep 16, 2016 5:55 pm

EquityChamp

avatar
Moderator
From 60+ levels now 70+. If a stock moves like this pace and strong specially in a bearish market sentiment then that means there is really something special behind that stock. Keep your hopes. The shares I analysed never failed to yield results.

Good luck.

32 Re: Swisstek (Ceylon) PLC - A Growth Stock on Fri Sep 16, 2016 8:37 pm

trader7


Manager - Equity Analytics
Manager - Equity Analytics
great potential, possible rs. 140+ next year.

33 Re: Swisstek (Ceylon) PLC - A Growth Stock on Mon Nov 07, 2016 1:42 pm

EquityChamp

avatar
Moderator
Revenue
Q1 16/17 - 634Mn
Q2 16/17 - 823Mn

PAT
Q1 16/17 - 79Mn
Q2 16/17 - 100Mn

These figures indicates that the business volumes are growing. The share price continue to be trading above Rs70 even in the subdued market conditions. It has always been an investment grade company since last year. people who wish to buy should buy now. I told about this share when it was trading on 50s and still I am positive about this stock.

Thanks

34 Re: Swisstek (Ceylon) PLC - A Growth Stock on Mon Nov 07, 2016 6:15 pm

Yahapalanaya

avatar
Vice President - Equity Analytics
Vice President - Equity Analytics
@EquityChamp wrote:Revenue
Q1 16/17 - 634Mn
Q2 16/17 - 823Mn

PAT
Q1 16/17 - 79Mn
Q2 16/17 - 100Mn

These figures indicates that the business volumes are growing. The share price continue to be trading above Rs70 even in the subdued market conditions. It has always been an investment grade company since last year. people who wish to buy should buy now. I told about this share when it was trading on 50s and still I am positive about this stock.

Could get further idea If you analyse it's Q3 & Q4 results for last 3 years.

35 Re: Swisstek (Ceylon) PLC - A Growth Stock on Tue Nov 08, 2016 7:45 am

EquityChamp

avatar
Moderator
FYI. Please see below the full year estimates for PARQ.
 Q1 16Q2 16Q3 16 FQ4 16 FFY 16/17 FFY 15/16 AYoY
Sales   634    823       933    1,006        3,396         3,041 11.7%
Operating profit   102    128       149       161           540            438 23.3%
PAT     78    100       116       127           421            323 30.3%
PAT for owners     71      91       105       115           383            292 31.2%
EPS    2.6     3.3        3.8        4.2          14.0           10.6  
Share price             71.5           55.0  
PER               5.1             5.2  
According to my estimates, PARQ is currently trading at a forward PE multiple of 5.1x which is at a 44% discount to current sector PE ratios. Therefore given the price appreciation potential this can be rated as AAA+ rated stock for mid term investment.

36 Re: Swisstek (Ceylon) PLC - A Growth Stock on Tue Nov 08, 2016 9:31 am

Yahapalanaya

avatar
Vice President - Equity Analytics
Vice President - Equity Analytics
@EquityChamp wrote:FYI. Please see below the full year estimates for PARQ.
   
 Q1 16Q2 16Q3 16 FQ4 16 FFY 16/17 FFY 15/16 AYoY
Sales   634    823       933    1,006        3,396         3,041 11.7%
Operating profit   102    128       149       161           540            438 23.3%
PAT     78    100       116       127           421            323 30.3%
PAT for owners     71      91       105       115           383            292 31.2%
EPS    2.6     3.3        3.8        4.2          14.0           10.6  
Share price             71.5           55.0  
PER               5.1             5.2  
According to my estimates, PARQ is currently trading at a forward PE multiple of 5.1x which is at a 44% discount to current sector PE ratios. Therefore given the price appreciation potential this can be rated as AAA+ rated stock for mid term investment.
Good work EC.

37 Re: Swisstek (Ceylon) PLC - A Growth Stock on Tue Nov 08, 2016 9:45 am

kassachandimal


Manager - Equity Analytics
Manager - Equity Analytics
u are dead right. PARQ is a solid stock EC. Is TJL also an AAA+ stock for u @ current cmp ?

38 Re: Swisstek (Ceylon) PLC - A Growth Stock on Tue Nov 08, 2016 2:55 pm

EquityChamp

avatar
Moderator
@kassachandimal wrote:u are dead right. PARQ is a solid stock EC. Is TJL also an AAA+ stock for u @ current cmp ?
With regard to TJL, its hard to see a significant 40%-50% discount to sector but surely its an investment grade stock. May be A++. Look at how foreigners accumulate this share over the period of last few months. For more information you can refer my thread on Teejay Lanka.

Thanks

39 Re: Swisstek (Ceylon) PLC - A Growth Stock on Tue Nov 08, 2016 4:57 pm

kassachandimal


Manager - Equity Analytics
Manager - Equity Analytics
Thanks EC. Can you name some of your AAA+ stocks for us?

40 Re: Swisstek (Ceylon) PLC - A Growth Stock on Mon Nov 14, 2016 4:50 am

kassachandi


Assistant Vice President - Equity Analytics
Assistant Vice President - Equity Analytics
EC , is there any impact for PARQ and da tile sector from the budget?

41 Re: Swisstek (Ceylon) PLC - A Growth Stock on Tue Nov 15, 2016 9:30 am

EquityChamp

avatar
Moderator
@kassachandi wrote:EC , is there any impact for PARQ and da tile sector from the budget?

I can see no significant impact. What are the budget proposals you think that have an adverse impact on PARQ. Let me know and I will do a detail study.
Thanks

42 Re: Swisstek (Ceylon) PLC - A Growth Stock on Tue Nov 15, 2016 9:54 am

kassachandimal


Manager - Equity Analytics
Manager - Equity Analytics
sure EC

43 Re: Swisstek (Ceylon) PLC - A Growth Stock on Fri Nov 25, 2016 6:58 am

kassachandimal


Manager - Equity Analytics
Manager - Equity Analytics
PARQ has great potential. Will give extra boost in coming quarters bcoz of this construction boom. Last chance to buy this below 70. My target before year end is 80. Sure 100+ stock next year. Foreign buying was also there yesterday

44 Re: Swisstek (Ceylon) PLC - A Growth Stock on Thu Dec 01, 2016 1:46 pm

kassachandimal


Manager - Equity Analytics
Manager - Equity Analytics
I think you missed this EC, in your trading opportunities thread. For me PARQ is still available below 70 and this has great potential in coming months. One of the value gems that still didn't started its upward move in this bull run

45 Re: Swisstek (Ceylon) PLC - A Growth Stock on Sun May 28, 2017 3:43 pm

EquityChamp

avatar
Moderator
Performance update.
PARQ has achieved all my targets for 2016/17.

Revenue for 2016/17 - Rs3.4Bn
PAT for 2016/17        - Rs428Mn

My estimates for 2017/18 would be,
A revenue of 4.3Bn and a PAT of Rs530Mn with an EPS of Rs17.8

Current price is 73.80 and trading at a PE of 4.1x and it is trading at a 50% discount to the sector.

Thanks

46 Re: Swisstek (Ceylon) PLC - A Growth Stock on Mon May 29, 2017 8:12 pm

EquityChamp

avatar
Moderator
Certainly a good demand is there for this stock. Some strategic investors should have collected good quantities around 75/- today.

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