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Offline Farzooq

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ASL -- Aisha Steel Mills Ltd
« Reply #-1 on: June 27, 2012, 03:52:42 PM »
AISHA STEEL MILLS LIMITED
.Offer for Sale of Shares
THE PRESENT OFFER CONSISTS OF 10,000,000 ORDINARY SHARES ( 3.73% OF
THE TOTAL ORDINARY SHARE CAPITAL OF AISHA STEEL MILLS LIMITED) AT
AN OFFER PRICE OF PKR 10 PER SHARE
THIS IS NOT A PROSPECTUS BY AISHA STEEL MILLS LIMITED, BUT AN OFFER
FOR SALE BY METAL ONE CORPORATION, JAPAN, ARIF HABIB EQUITY (PVT.)
LIMITED & MR. HASIB REHMAN, THE EXISTING SPONSORS OF AISHA STEEL
MILLS LIMITED, OUT OF THEIR SHAREHOLDING IN AISHA STEEL MILLS
LIMITED
Subscription list will open at the commencement of banking hours on 3rd July, 2012 and will close
on 4th July, 2012 at the close of banking hours

http://www.arifhabibltd.com/downloads/OFSD_ASML.rar

http://www.arifhabibltd.com/downloads/morningcalls/27-Jun-12.pdf
« Last Edit: December 08, 2012, 07:27:37 PM by M&M »
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ASL -- Aisha Steel Mills Ltd
« Reply #-1 on: June 27, 2012, 03:52:42 PM »

Online Hamid Mamraiz

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Re: ASL -- Aisha Steel Mills Ltd
« on: June 27, 2012, 04:03:12 PM »
Aisha Steel Mills IPO good to ‘Subscribe’                                           Written as on June 27, 2012

Highlights

            •         Introduction: Largest CRC production facility operates on 50acre area

            •         Company intends to tap huge demand supply gap of 408k tons in CRC

            •         Company’s financing structure, 65:35 debt to equity, FX risk inbound

            •         Recommendation 'Subscribe'

 

The sponsors of the Aisha Steel Mills Limited (ASML) yesterday arranged the plant site visit for different investors' communities where they explain all prospects including production, financial health and market demand related to the company. In today's Value Seeker we provide our post visit analysis over the company.

Introduction: Largest CRC production facility operates on 50acre area

The company was incorporated 2005 as a public limited company. The company is currently engaged in production of Cold Rolling Coil (CRC) from Hot Rolled Coil (HRC) with an initial capacity of 220k tons per annum. The plant site of the company is located on an area of 50 acre in the DSU-45, Pakistan Steel Down Steam Industrial Estate Bin Qasim, Karachi. Where most of the giant auto assemblers and vendors are located. ASML is the only CRC plant in Pakistan with an Electrolytic Cleaning Line (ECL) which substantially improves the product quality and free it from oil, iron powder and other external materials impurities; the product then is used in auto manufacturing and high quality steel products, this will be the first ECL based CRC production in country.

Company intends to tap huge demand supply gap of 408k tons in CRC

The company intends to tap huge gap between demand and supply of 408k tons of CRC in Pakistan with the largest capacity of 220k tons in country. Currently, local companies are producing 175k tons of CRC against the demand of 583k tons which is fulfill by imports. On the other side, if company opts to produce 1mm thickness sheet of CRC (which is highly demanded product in country), the production capacity of the company can increase to 300k tons per annum. It makes the CRC production of the company more flexible towards the underlying demand based on thickness of CRC sheets. However, under invoicing culture in the country could hamper the sales of CRC of the company as the stiff competition exerts pressure on the company's margins.

Company’s financing structure, 65:35 debt to equity, FX risk inbound

The company has formed with the debt to equity ratio of 65:35 with the total investment of Rs9.4bn. The company could face the foreign exchange risk as the product will act as an import substitute. The price of finished goods, namely CRC, is linked to prices in the international market, which are quoted in USD, thus protecting the Company from any adverse exchange fluctuations. Moreover, any upward revision in the interest rates also increases the financial cost of the company as the company carrying 65:35 debt ratios.

Recommendation 'Subscribe'

With the current demand supply scenario we are positive on the company as it will be able capture imported CRC market in the country. As its competitor International steel is only galvanizing with zinc production facility. With only 10mn shares offering we believe the company is expected to receive overwhelming response from investors.

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Offline guru1

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Re: ASL -- Aisha Steel Mills Ltd
« Reply #1 on: June 27, 2012, 09:56:32 PM »
arif uncle k plans aksar kamyab hotay hain.
it also seems a sure success.

Offline mfdarvesh

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Re: ASL -- Aisha Steel Mills Ltd
« Reply #2 on: June 28, 2012, 04:48:48 PM »
would you recommend buying?

Offline space

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Re: ASL -- Aisha Steel Mills Ltd
« Reply #3 on: June 28, 2012, 08:10:37 PM »
would you recommend buying?

I expect 20-30% return easily in the short term (i.e price of 12-13) and arif is known to do satta in his stocks, and this is going to be a small freefloat so it should be easy to push up or down, imo, make a quick fire 20% tops and walk away, let it find its rightful place in the price order and then consider long investment if it still meets the numerical criteria of your investment/risk appetite.

Standard Disclaimer : Kindly note, this is totally based on how I 'feel' no calculations or insider info has gone into my 'dehan'. So enter at your own risk.
« Last Edit: June 28, 2012, 08:12:33 PM by space »
Portfolio : I try to adhere to Div 40% Growth 20% Midterm Play 13%  Daily Masti Items 7% CASH 20%

Offline SONA

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Re: ASL -- Aisha Steel Mills Ltd
« Reply #4 on: June 28, 2012, 09:07:55 PM »
would you recommend buying?

I expect 20-30% return easily in the short term (i.e price of 12-13) and arif is known to do satta in his stocks, and this is going to be a small freefloat so it should be easy to push up or down, imo, make a quick fire 20% tops and walk away, let it find its rightful place in the price order and then consider long investment if it still meets the numerical criteria of your investment/risk appetite.

Standard Disclaimer : Kindly note, this is totally based on how I 'feel' no calculations or insider info has gone into my 'dehan'. So enter at your own risk.
space bro where is your 3k? And also tell me how & when can it buy?

Offline space

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Re: ASL -- Aisha Steel Mills Ltd
« Reply #5 on: June 28, 2012, 11:48:01 PM »
would you recommend buying?

I expect 20-30% return easily in the short term (i.e price of 12-13) and arif is known to do satta in his stocks, and this is going to be a small freefloat so it should be easy to push up or down, imo, make a quick fire 20% tops and walk away, let it find its rightful place in the price order and then consider long investment if it still meets the numerical criteria of your investment/risk appetite.

Standard Disclaimer : Kindly note, this is totally based on how I 'feel' no calculations or insider info has gone into my 'dehan'. So enter at your own risk.
space bro where is your 3k? And also tell me how & when can it buy?

space is my ingame name at 3k.org so outside the3k verse I am in a habbit of using space3k because in most other games and some forums "space" is not available but space3k is, so as a habit I made username space3k on this forum. Just discovered 2 days ago that I can change username without issue, so I decided to go with space, cos space is/was/will forever be a kickass necromancer, with kill from afar powers ;) and I hope the name 'space' brings the same kind of power play to me on kse as it did on 3k.org :D - game has been going on since 1991 I joined in 2007 and by 2009 I was top player, 1st player to ever reach level 130 - I did that while I was watching NASDAQ crash and burn in the back ground :D

As for how to acquire ASML I think you would have to call your broker and ask for IPO application forms
Portfolio : I try to adhere to Div 40% Growth 20% Midterm Play 13%  Daily Masti Items 7% CASH 20%

Offline Farzooq

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Re: ASL -- Aisha Steel Mills Ltd
« Reply #6 on: June 29, 2012, 12:20:37 PM »
Encouragingly, new fiscal year will commence with
an initial public offering (IPO) of Aisha Steel Mills
(ASML) at the Karachi Stock Exchange. ASML is a
joint venture between Arif Habib Group, Metal One
Japan and Universal Metal Corporation. The main
operation of the company is the production of Cold
Rolling Coil (CRC) which is a value added flat-rolled
steel. The IPO subscription of the company will be held
between 3rd and 4th July. Through this offer to the general
public of 10mn shares at a price of Rs10 per share, the
company intends to raise Rs100mn. To recall, the company
has already raised Rs234mn through a Pre-IPO placement to
intuitional investors. We do not have a research
recommendation on the company but some main positives
worth mentioning are 1) prevailing demand supply gap of
CRC and 2) involvement of Japanese partners who already
have access to the steel distribution industry.

The Company Profile
First incorporated as a public company in 2005, ASML is a
joint venture between Arif Habib Group, Metal One Japan and
Universal Metal Corporation. The core operation of the
company is to import Hot Roll Coil (HRC) and process it into
Cold Rolled Coil (CRC) for sale. CRC is used in various
industries ranging from Auto and Engineering to Home
appliance and packaging. However, the main application of
CRC will be within the Auto and Engineering industries. The
installed capacity of the plant is 220,000 tons per annum and
the management expects to commence commercial
operations by the end of this month.

Key positives
The favourable demand supply gap within the steel industry in
Pakistan bodes well for ASML. The supply shortfall in
Pakistan during FY11 stood at 408,000 tons and the company
expects this shortfall to continue till 2015 and beyond. In
terms of per capita steel consumption, Pakistan has among
the lowest per capita steel consumption (14.8kgs) compared
to the regional average of 243kgs. Hence, there is immense
potential for growth in the long term. Moreover, the expertise
of Japanese partners (i.e. Metal One, Universal Metal
Corporation) will come in handy as they already have an
established network within the steel industry.

Demand / Supply gap
('000 MT)
2010 2011 2012 2013 2014
Total demand 4 67 583 620 653 686
Total production 6 5 175 430 540 594
Import 4 02 408 190 113 9 2
Source: Company presentation
Acutal Projected (3.5% growth)

Financial highlights
Since the company’s commercial operations are yet to begin,
the company reported a loss after tax of Rs42mn in 1HFY12.
However, the management expects the company to become
profitable from FY13 onwards.

Financial projections
(Rs mn) 2013 2014 2015
Net revenue 1 3,032 1 6,980 2 0,088
Gross profit 1,208 1,560 1,898
EBIT 1,055 1,394 1,721
Profit after tax 134 246 478
EPS (Rs) 0.50 0.92 1.78
Source: Company presentation

Our view on the IPO
Although we do not have a research recommendation on the
stock but based on the current and expected demand supply
dynamics of the steel industry prospects of ASML seem fairly
positive. However, since a substantial portion of the project
costs is financed through long term debt (63% of the project
costs) the risk profile of the company for equity investors is
relatively high. Overall, we expect the IPO to receive a
reasonably positive response from investors even though the
offer price is above the company’s book value of Rs8.7/share

jsgcl
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Offline Farzooq

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Re: ASL -- Aisha Steel Mills Ltd
« Reply #7 on: June 30, 2012, 11:20:31 AM »
Neutral stance as gains are back?loaded: We have a Neutral stance on the upcoming Offer
for Sale of Aisha Steel Mills Limited (ASML). As per our estimates ASML will bear the fruits
of higher capacity utilization, lower financial charges and economies of scale starting from
FY14 onwards. However, higher interest costs, preferred stock dividends/dilution and
principal repayments will be a drain on initial year earnings and cash flows.

About the company: Aisha Steel Mills Limited (ASML) was incorporated in 2005 as a public
limited company. The company has been established to engage in business of
manufacturing CRC (Cold Rolled Coils) with an initial capacity of 220,000 tons at 0.5mm of
thickness per annum and located on an area of 50 acres. The company plans to produce
value added products for the engineering, auto and home appliances sector in Pakistan.
Offer for Sale: The three major shareholders are offering a total of 10mn shares at a par
value of PKR10/share to general investors. Aisha Steel had raised a total of PKR234mn from
Pre IPO investors who were also given the shares at par. The date of the offering for public
subscription is July 3, 2012 and July 4, 2012.

Key project Highlights: ASML is a 220k tons rolling mill producing CRC from HRC and will
mainly substitute CRC imports (currently 300?350K). International margins (CRC?HRC
margin) work out to ~US$85/ton while a custom duty of 10% on imported CRC further
enhances margins to ~US$140/ton levels. The company intends to bring the Electrolytic
Cleaning Line (ECL) online by 4Q2012 to service the high margin auto industry. The
management considers its ‘Pickling Line’ (Japanese and European technology), affiliation
with Mitsubishi and exclusive arrangements with distributors as its greatest edge.

ASML Financial Highlights (PKR MN) FY13 FY14 FY15
Utilisation 75% 85% 90%
Primary Margin (USD/Ton) 140 140 140
Contribution margin (USD/Ton) 85 85 85
Fixed cost (USD/Ton) 78 67 61
Net Revenue 13,348 16,662 18,250
Gross Profit 1,077 1,335 1,468
EBIT 914 1,154 1,273
EBT 71 346 569
Net Profit/ (Loss) 14 181 321
Net profit available to common shareholders 14 181 321
Diluted EPS (PKR) 0.04 0.53 0.94
Source: Elixir Research, ASML Briefing Notes
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Offline SONA

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Re: ASL -- Aisha Steel Mills Ltd
« Reply #8 on: June 30, 2012, 12:43:10 PM »
Neutral stance as gains are back?loaded: We have a Neutral stance on the upcoming Offer
for Sale of Aisha Steel Mills Limited (ASML). As per our estimates ASML will bear the fruits
of higher capacity utilization, lower financial charges and economies of scale starting from
FY14 onwards. However, higher interest costs, preferred stock dividends/dilution and
principal repayments will be a drain on initial year earnings and cash flows.

About the company: Aisha Steel Mills Limited (ASML) was incorporated in 2005 as a public
limited company. The company has been established to engage in business of
manufacturing CRC (Cold Rolled Coils) with an initial capacity of 220,000 tons at 0.5mm of
thickness per annum and located on an area of 50 acres. The company plans to produce
value added products for the engineering, auto and home appliances sector in Pakistan.
Offer for Sale: The three major shareholders are offering a total of 10mn shares at a par
value of PKR10/share to general investors. Aisha Steel had raised a total of PKR234mn from
Pre IPO investors who were also given the shares at par. The date of the offering for public
subscription is July 3, 2012 and July 4, 2012.

Key project Highlights: ASML is a 220k tons rolling mill producing CRC from HRC and will
mainly substitute CRC imports (currently 300?350K). International margins (CRC?HRC
margin) work out to ~US$85/ton while a custom duty of 10% on imported CRC further
enhances margins to ~US$140/ton levels. The company intends to bring the Electrolytic
Cleaning Line (ECL) online by 4Q2012 to service the high margin auto industry. The
management considers its 'Pickling Line' (Japanese and European technology), affiliation
with Mitsubishi and exclusive arrangements with distributors as its greatest edge.

ASML Financial Highlights (PKR MN) FY13 FY14 FY15
Utilisation 75% 85% 90%
Primary Margin (USD/Ton) 140 140 140
Contribution margin (USD/Ton) 85 85 85
Fixed cost (USD/Ton) 78 67 61
Net Revenue 13,348 16,662 18,250
Gross Profit 1,077 1,335 1,468
EBIT 914 1,154 1,273
EBT 71 346 569
Net Profit/ (Loss) 14 181 321
Net profit available to common shareholders 14 181 321
Diluted EPS (PKR) 0.04 0.53 0.94
Source: Elixir Research, ASML Briefing Notes
farzook bro terminal per iske trading kb start ho ge?

Offline Farzooq

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Re: ASL -- Aisha Steel Mills Ltd
« Reply #9 on: June 30, 2012, 12:46:03 PM »

farzook bro terminal per iske trading kb start ho ge?

In august
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Online SBM

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Re: ASL -- Aisha Steel Mills Ltd
« Reply #10 on: July 02, 2012, 07:20:27 AM »
Aiesha Steel Mills IPO
JULY 02, 2012 BR RESEARCh
Under present condition, when Initial Public Offerings (IPOs) are far and few, listing of Aisha Steel Mills Limited (ASML) at the start of the current fiscal year will help in lifting investors confidence in the domestic equity market. Incorporated in 2005, ASML is a joint venture between Arif Habib Corporation Limited, Metal One Corporation Japan and Universal Metal Corporation. The green field project is aimed at producing Cold Rolled Coil (CRC) with an initial annual capacity of 220,000 tons. The project is currently in its trial phase and slated to start manufacturing of saleable products in the 1QFY13. Industries such as automobiles and allied, engineering, home appliance and packaging are the major buyers of CRC. With a paid-up share capital of Rs.3.4 billion, the steel company managed to garner Rs.234 million from pre-IPO investors. While the public portion of ASML IPO comprises of 10 million ordinary shares at a price of Rs.10 per share, out of which 0.5 million shares have been allocated to the employees of the Company and the remaining 9.5 million shares have been set aside for the general public. The real drawing card for ASML is a huge supply deficit in the domestic industry, with local production standing at around 175,000 ton in 2011-nearly one third of the total domestic demand, according to ASMLs prospectus. In addition to sponsors strong financial backing, another trump card is Japanese partners affiliation with steel distribution and trading industry. When forecasting outlook for industrial goods manufacturers, it goes without saying that to a large extent the bottom-line performance of the manufacturers hinges on the outlook of production cost, raw material prices and currency movements. Moreover, higher interest rate could throw spanner in the works, with a debt to equity mix of around 63:37. With fewer shares (smaller IPO size) on sale, the market expects oversubscription of the issue. Subsequent to pre-IPO placement the Companys book value stood at Rs.8.79 per share. The market speculates that the sponsors are eyeing benefits beyond raising capital, given that the listing will result in goodwill creation and valuation benefits
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Offline SONA

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Re: ASL -- Aisha Steel Mills Ltd
« Reply #11 on: July 02, 2012, 08:40:32 AM »
Aiesha Steel Mills IPO
JULY 02, 2012 BR RESEARCh
Under present condition, when Initial Public Offerings (IPOs) are far and few, listing of Aisha Steel Mills Limited (ASML) at the start of the current fiscal year will help in lifting investors confidence in the domestic equity market. Incorporated in 2005, ASML is a joint venture between Arif Habib Corporation Limited, Metal One Corporation Japan and Universal Metal Corporation. The green field project is aimed at producing Cold Rolled Coil (CRC) with an initial annual capacity of 220,000 tons. The project is currently in its trial phase and slated to start manufacturing of saleable products in the 1QFY13. Industries such as automobiles and allied, engineering, home appliance and packaging are the major buyers of CRC. With a paid-up share capital of Rs.3.4 billion, the steel company managed to garner Rs.234 million from pre-IPO investors. While the public portion of ASML IPO comprises of 10 million ordinary shares at a price of Rs.10 per share, out of which 0.5 million shares have been allocated to the employees of the Company and the remaining 9.5 million shares have been set aside for the general public. The real drawing card for ASML is a huge supply deficit in the domestic industry, with local production standing at around 175,000 ton in 2011-nearly one third of the total domestic demand, according to ASMLs prospectus. In addition to sponsors strong financial backing, another trump card is Japanese partners affiliation with steel distribution and trading industry. When forecasting outlook for industrial goods manufacturers, it goes without saying that to a large extent the bottom-line performance of the manufacturers hinges on the outlook of production cost, raw material prices and currency movements. Moreover, higher interest rate could throw spanner in the works, with a debt to equity mix of around 63:37. With fewer shares (smaller IPO size) on sale, the market expects oversubscription of the issue. Subsequent to pre-IPO placement the Companys book value stood at Rs.8.79 per share. The market speculates that the sponsors are eyeing benefits beyond raising capital, given that the listing will result in goodwill creation and valuation benefits
sawal ye he k where will be the found energy for this project jb k mulk me energy hy he nahe?

Offline Farzooq

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Re: ASL -- Aisha Steel Mills Ltd
« Reply #12 on: July 02, 2012, 12:56:45 PM »
Aisha Steel Mills Ltd (ASML): Offer For Sale— Bringing Steel Back On The Map – HMFS Research

Added by Baqar Abbas Jafri on July 2, 2012.
Saved under GENERAL INDUSTRIES, HEADLINES, PERSONAL FINANCE
Tags: Aisha Steel Mills, Ali Hussain, Habib Metropolitan Financial Services

 By: Ali Hussain, Senior Analyst
 
Habib Metropolitan Financial Services
 
 The sponsors of Aisha Steel Mills Ltd (ASML) have announced an Offer for Sale (OFS) of 10mn shares (3.73% of Ordinary Share Capital) at PKR10/share. Of the total offering, 9.5mn shares will be available to the general public whereas 0.5mn shares have been allocated to ASML employees. The offering will be conducted on July 3-4, 2012.
 
OFS Transaction
 
ASML was incorporated as public limited company in 2005 as a joint venture between the Arif Habib Group, Metal One Corporation, and Universal Metal Corporation as the majority sponsors. The OFS of 10mn shares is being facilitated by the divestment of ordinary shares by the majority sponsors. The sponsors have also successfully placed 23.4mn shares (@PKR10/share) through the pre-IPO process with various institutional investors. After receiving approval from the SECP, ASML has issued 75.8mn convertible preference shares at PKR10/share to Arif Habib Corporation Ltd. The preference shares are convertible into ordinary shares at ASML’s discretion any time after the Commercial Operating Date (COD) at face value.

Open publication - Free publishing - More ali hussain

 
Operational Structure
 
ASML is set up to operate a 220k MT/annum Cold Rolled Coil (CRC) facility in order to provide value added products to the Auto & Allied, engineering, and home appliances manufacturers. The stated capacity is quantified in terms of the stringent Japanese standard of 0.5mm CRC gauge. Given the local market standard of 1.0mm gauge, management is confident that the plant can operate at 269k MT/annum due to the standard differential. The plant is strategically located on a 50acre area at the Port Qasim Industrial Steel Estate and employs state of the art machinery from Japan, Austria and Switzerland. ASML has the only CRC facility in the country that has an Electrolytic Cleaning Line (ECL) which will allow it to cater to the high end automotive and home appliance segments.
 
The company will procure Hot Rolled Coil (HRC), which is its key raw material, from suppliers across the world, including its sponsors Metal One and Universal Metal Corporations. Power (16.5 MW) to the facility will be supplied through a dedicated 132KVA grid  from KESC, in addition to 1.7mmcfd gas via SSGC. The company has established exclusive relationships with 18 dealers to distribute its products. Trial production has already commenced at the plant and the company expects to announce its COD in the first week of July, 2012.
 
Pakistan Steel Industry—Ripe For the Picking
 
With Pakistan’s steel per capita consumption of 14.8kg at a steep discount to the regional average of 243kg, the domestic steel market offers substantial growth potential. As per management estimates, local CRC demand is approximately 467k MT, with local production pegged at 175K tons and the remainder satisfied through imports. Given the sizeable demand-supply gap, ASML is presented with a lucrative opportunity to rapidly establish its market share. Furthermore, with importers susceptible to importing sub-standard quality products and long lead times, consumers will welcome ASML’s entry in the market place. Currently there are only two other producers of CRC in the local market i.e. Pakistan Steel Mill (PSM) and International Steel Limited (ISL). With PSMC mired in financial and production issues, ISL is the only noteworthy peer to ASML in the industry. However, with ISL utilizing the majority of its CRC production capacity towards producing Galvanized Rolling Coil (GRC), ASML is poised to establish a strong consumer base from the get-go.
 
Strategic & Competitive Advantages
 
? With domestic CRC prices linked to international prices quoted in USD, ASML remains hedged against exchange rate fluctuations, which pose a major risk in the local economy given the dire current account situation
 
? As a value added producer, ASML is exempt from the 10% import duty applicable to HRC/CRC importers
 
? ASML’s plant  location makes it in close proximity to key customers in the automotive industry. Furthermore, it also allows the company to save on raw material transportation costs and remain relatively insulated to supply chain disruptions caused by the city’s uncertain law and order situation
 
? The company has established a long term sales and distribution agreement with Mitsubishi Corporation. Given Mitsubishi’s firm roots in the local economy, this alliance will be fruitful for ASML in terms of establishing brand recognition and geographical reach
 
? With the country’s manufacturing sector suffering at the hands of the power crisis, ASML’s dedicated 132KVA power line, which has a history of 7 minutes of total outage time a year, will ensure production stability. The competitive advantage of this power connection is notable as such that ISL has indicated it is also considering synchronization to the 132KVA grid in light of power disruptions on its existing connection

Growth Prospects

? ASML plans to enhance its capacity via the addition of four bells to the Batch Annealing Furnace which will enhance capacity to 269k MT/annum. The proposed addition of a Skin Passing line would further propel capacity to 360k MT/annum
 
? In addition to CRC sales, the company will be able to generate additional revenue by providing leveling and shearing services
 
? Management intends to develop a Service Center that will serve as one stop shop for the automotive and other value added sectors
 
? The company seeks to explore forward integration activities by establishing a Coloring Line and Electro Galvanized products
 
Management Projections—Pleasantly Conservative

ASML management has pegged CRC demand growth at 3.5% in the forecast years which we believe is a reasonable projection given the growth potential of the sector in light of the low per capita consumption. Furthermore, the entry of ASML will not induce a crowding out effect as projected demand will continue to outpace domestic supply by a sizeable quantum. Given the price volatility in the industry, management has conservatively assumed a margin spread of USD88/ton (historical 10-year average) between HRC-CRC along with not incorporating the potential impact of capacity increments. As such, we have relied on management projections for the most part but made adjustments as it pertains to our proprietary outlook on PKR-USD parity and the recent reduction in the minimum turnover tax from 1.0% to 0.5% in Budget FY13.
 
Investment Theme—Subscribe!   

Given the cyclical nature of the steel industry, we have chosen to value ASML using a relative multiple methodology rather than the Discounted Cash Flow analysis adopted by the company management. With price volatility rampant in the sector, investors are more likely  to focus on the near term earnings outlook rather than long term projections which are difficult to forecast. We believe the Price/Book (P/B) multiple provides a reasonable benchmark for capturing current investor sentiment towards the steel sector.
 
As such we derive our June’13 target price using a blended Price/Book (P/B) multiple, assigning equal weight to the Asia-Pacific regional average for steel companies and ISL, as it is the closest comparable to ASML in the local market. With the Asia-Pacific peer P/B multiple at 0.9x and ISL currently trading at 1.3x, our June’13 target price for ASML stands at PKR13.31/share, implying a 33% upside to the OFS price of PKR10/share. Given the lucrative upside potential in spite of the conservative financial projections, we promulgate a Subscribe stance on the offering.
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Offline space

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Re: ASL -- Aisha Steel Mills Ltd
« Reply #13 on: July 02, 2012, 04:10:16 PM »
Aisha Steel Mills Ltd: Small offer likely to be oversubscribed; duties and margins to determine long term prospects
 
Event
·         Aisha Steel Mills Limited (ASML) is a joint venture between Arif Habib Group, Metal One–Japan, and Universal Metal Corporation. The company has 268mn ordinary share and 76mn cumulative and convertible preference shares outstanding. Three major sponsors of the company, together holding 45.2% of ordinary shares of the company, are divesting their shares and offering to general public.

 
The Offer
·         After issuance of 23mn new ordinary shares in private placement, 3 major sponsors of ASML, Arif Habib Equity (Pvt.) Ltd, Metal One Corporation and Mr. Hasib Rehman, are offering their 10mn shares to general public. Out of 10mn shares, 0.5mn shares have been earmarked for employees of the company. The offer is being made at a price of PKR10/share.

 
 
Action and recommendation
·         The 3 major sponsors of the company are offering their shares at PKR10/share which translates into FY13E P/E and P/B ratio of 20x and 0.84x, respectively. The projected financials shared by the company are presented below. Owing to small size of the float and big names behind the project, we expect the offer to be oversubscribed and consequently initial price performance in the stock.


-Foundation Securities Research research@fs.com.pk
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Re: ASL -- Aisha Steel Mills Ltd
« Reply #14 on: July 02, 2012, 04:11:09 PM »
Aiesha Steel Mills IPO
JULY 02, 2012 BR RESEARCh
Under present condition, when Initial Public Offerings (IPOs) are far and few, listing of Aisha Steel Mills Limited (ASML) at the start of the current fiscal year will help in lifting investors confidence in the domestic equity market. Incorporated in 2005, ASML is a joint venture between Arif Habib Corporation Limited, Metal One Corporation Japan and Universal Metal Corporation. The green field project is aimed at producing Cold Rolled Coil (CRC) with an initial annual capacity of 220,000 tons. The project is currently in its trial phase and slated to start manufacturing of saleable products in the 1QFY13. Industries such as automobiles and allied, engineering, home appliance and packaging are the major buyers of CRC. With a paid-up share capital of Rs.3.4 billion, the steel company managed to garner Rs.234 million from pre-IPO investors. While the public portion of ASML IPO comprises of 10 million ordinary shares at a price of Rs.10 per share, out of which 0.5 million shares have been allocated to the employees of the Company and the remaining 9.5 million shares have been set aside for the general public. The real drawing card for ASML is a huge supply deficit in the domestic industry, with local production standing at around 175,000 ton in 2011-nearly one third of the total domestic demand, according to ASMLs prospectus. In addition to sponsors strong financial backing, another trump card is Japanese partners affiliation with steel distribution and trading industry. When forecasting outlook for industrial goods manufacturers, it goes without saying that to a large extent the bottom-line performance of the manufacturers hinges on the outlook of production cost, raw material prices and currency movements. Moreover, higher interest rate could throw spanner in the works, with a debt to equity mix of around 63:37. With fewer shares (smaller IPO size) on sale, the market expects oversubscription of the issue. Subsequent to pre-IPO placement the Companys book value stood at Rs.8.79 per share. The market speculates that the sponsors are eyeing benefits beyond raising capital, given that the listing will result in goodwill creation and valuation benefits
sawal ye he k where will be the found energy for this project jb k mulk me energy hy he nahe?

project is located in bin qasim industrial estate which is provided bijli by kesc. Asml needs just 16mw (i think) which wikll be provided by kesc - supply not an issue as kesc doesnt cut electricity of paying industrial areas and doesnt suffer from the kind of shortage other discos suffer from
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Offline tariqhafeez

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Re: ASL -- Aisha Steel Mills Ltd
« Reply #15 on: July 02, 2012, 04:26:22 PM »
no need to go for such IPO as steel companies already listed are struggling .  While the Debt equity of 65:35 is not good to buy equity as first 3 years, cash flow will be locked in to pay for debt repayments.

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Re: ASL -- Aisha Steel Mills Ltd
« Reply #16 on: July 02, 2012, 04:37:35 PM »
no need to go for such IPO as steel companies already listed are struggling .  While the Debt equity of 65:35 is not good to buy equity as first 3 years, cash flow will be locked in to pay for debt repayments.

I agree with your valued comments. No need to poke the nose into highly leveraged companies where scope of business is not limited.
The Stock Market Game "the higher the risk, the greater the reward"

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Re: ASL -- Aisha Steel Mills Ltd
« Reply #17 on: July 02, 2012, 04:41:21 PM »
no need to go for such IPO as steel companies already listed are struggling .  While the Debt equity of 65:35 is not good to buy equity as first 3 years, cash flow will be locked in to pay for debt repayments.

I agree with your valued comments. No need to poke the nose into highly leveraged companies where scope of the business and grwoth in share value is  limited.
The Stock Market Game "the higher the risk, the greater the reward"

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Re: ASL -- Aisha Steel Mills Ltd
« Reply #18 on: July 04, 2012, 07:08:08 PM »
Kisse ne IPO mein apna hissa dala hai???
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