Author Topic: REWM -- Reliance weaving mills  (Read 36548 times)

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Offline Valueestimator

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REWM -- Reliance weaving mills
« Reply #-1 on: June 07, 2013, 10:49:17 AM »
Highlighting KTML, REWM and GADT

Driven by concrete fundamentals and attractive valuations, we highlight Gadoon Textile Mills (GADT) and Reliance Weaving Mills (REWM) as next potential outperformers in the textile sector

We also reiterate our stance on Kohinoor Textile Mills (KTML), still yielding an upside of 97% at our SOTP based TP of PKR36/sh

At our estimated FY13E EPS of PKR48.2/sh, GADT is currently available at an attractive PE multiple of 2.7x compared to BMA Universe FY13PE of 8.5x

REWM is currently trading at rock bottom PE of 1.6x to our FY13E EPS of PKR18.7/sh

Going forward, 1) Chinese cotton yarn import boom, 2) EU duty waiver access, 3) better retention levels on yarn and cloth/fabric and 4) improved gas supply in summer season will remain the key value drivers

bma

REWM would soon cross 60 mark. fair value is over 100.  i also highlight fasm which can be doubled in a years time.
« Last Edit: October 26, 2013, 11:08:45 PM by M&M »
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REWM -- Reliance weaving mills
« Reply #-1 on: June 07, 2013, 10:49:17 AM »

Offline SBM

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Re: REWM -- Reliance weaving mills
« on: June 07, 2013, 02:57:52 PM »
I think its about time rewm had its own thread.
It capped today with decent volumes.

@valueestimator, one thing I want to know is what are your dividend expectations ? Because last couple of years tehy have give out fatima shares as specie dividend in the ratio of 1:10
This year, they have committments for capex of 775 million, which is more than the cashflow they will generate.

50 rupees tp tu easy hai.
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Offline Valueestimator

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Re: Textile Sector
« Reply #1 on: June 22, 2013, 10:27:23 AM »
a review of Reliance weaving 3 years performance

2011- EPS 16.38 per share, dividend 15 share of Fatima fertilizer for 100 share of reliance weaving, value of dividend 3.9 per share

2012 EPS 8.45 per share, dividend 10 share of Fatima fertilizer for 100 share of reliance weaving, value of dividend 2.60 per share

2013, expected EPS 16.18 per share of Fatima fertilizer for 100 share of reliance weaving, value 3.9 per share

the share has been recently recommended by bma with target of 55 per share, book value is over 80 and the company is adding 13,000 new spindles.
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Offline Abdul Qadir

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Re: REWM -- Reliance weaving mills
« Reply #2 on: July 18, 2013, 01:34:15 AM »
Start accumulating
Target 55-60

Offline MMQ

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Re: REWM -- Reliance weaving mills
« Reply #3 on: July 25, 2013, 11:09:56 AM »
 :clap1: :clap1: moving up...

Offline Valueestimator

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Re: REWM -- Reliance weaving mills
« Reply #4 on: July 26, 2013, 09:59:04 AM »
lao maal 40.

 :dance :dance
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Offline PK

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Re: REWM -- Reliance weaving mills
« Reply #5 on: July 26, 2013, 12:13:46 PM »
Only buy something that you'd be perfectly happy to hold if the market shut down for 10 years.

Offline Hamid Mamraiz

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Re: REWM -- Reliance weaving mills
« Reply #6 on: August 05, 2013, 04:26:44 PM »
I am not expecting cash dividend from REWM because they are going to invest 1.5 billion Rupees in M/S Fatima Energy Limited. However specie dividend can be expected from them.

http://www.kse.com.pk/notices-updates/detail2.php?0.08491156367706154&id=4&nid=045553
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Offline Valueestimator

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Re: REWM -- Reliance weaving mills
« Reply #7 on: August 05, 2013, 04:32:04 PM »
15% specie div is expected which equivalent to 4 rupees of cash

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Offline SBM

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Re: REWM -- Reliance weaving mills
« Reply #8 on: August 05, 2013, 09:58:49 PM »
I am not expecting cash dividend from REWM because they are going to invest 1.5 billion Rupees in M/S Fatima Energy Limited. However specie dividend can be expected from them.

http://www.kse.com.pk/notices-updates/detail2.php?0.08491156367706154&id=4&nid=045553

fatima energy is a 100mw bagasse based power plant next to fatima sugar mills (unlisted)

good stuff.
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Offline Valueestimator

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Re: REWM -- Reliance weaving mills
« Reply #9 on: August 05, 2013, 10:00:35 PM »
wat is the fair value of the company.
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Re: REWM -- Reliance weaving mills
« Reply #10 on: August 06, 2013, 01:17:49 AM »
wat is the fair value of the company.

of rewm or fatima energy ?
not many details are available for fatima energy

http://fatima-group.com/fatimaenergy/companyoverview.php

100 mw plant. will use  bagasse during cane crushing  season (3 months ) and coal during  off season ( 9 months )

rewm ki valuation tu aphi behtar jantay hain

100 mw plant would cost roughly 16-18 billion rupees. => 4-4.5 billion  equity , so rewm may end up with 33% stake
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Re: REWM -- Reliance weaving mills
« Reply #11 on: August 11, 2013, 05:30:08 AM »
15% specie div is expected which equivalent to 4 rupees of cash

 :skeptic:
rewm issued capital is 30 million shares.
rewm currently holds just 2.625 million shares of fatima
=>  it cant pay more than 8.75% specie dividend.

net current assets per share is -4.6 for rewm - though it will turn positive with full year results

775million commitment for capex and 1.5 billion investment in power plant means they will take on about 2 billion of debt.

current debt/equity is a quite comfortable 12%
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Offline Valueestimator

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Re: REWM -- Reliance weaving mills
« Reply #12 on: August 11, 2013, 12:19:43 PM »
Thanks for the correction bro.

I noticed this a week ago and should have corrected it. My apologies for that. Now I have some expectations of cash dividend 1.50-2 per share, as well.

The company has not adopted the strategy to accelerate debt repayments, instead it has adopted growth strategy (13,000 new spindles+1.5bn investment in Fatima share (48 per share). so I think it will undertake more long term debt for new spindles whereas equity contribution in Fatima energy can be financed through internal cash flows, as it would be required over 2-3 years. 

if they pay 2 rupees cash, that is roughly 10% of cash profit (+ DEPRECIATION). I think if next year textile co's will earn profits similar to what they have earned during 2013, the shares prices will appreciate by 50%  in my view as  investors remain always worried about the sustainability of earnings from textile companies therefore they discount the valuation by large.

rewm has been profitable since 2010 and has been paying off dividends, this will be the fourth year and next year would be the 5th year, so investor would have more comfort on the business and financials. I am holding this stock for long term as I believe Pakistan competitive position has improved due to high cost of cotton and labor in china, whose textile sector is more than 20 times larger than Pakistan.


I believe the share should trade at least 80% of its book value including the revaluation surpluses as Pakistan currency has depreciated significantly and replacement cost of a similar unit would be quite higher than the book value of the company.
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Offline Poker Face

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Re: REWM -- Reliance weaving mills
« Reply #13 on: August 13, 2013, 03:54:22 PM »
@ Valueestimator & Ouulman
what are your targets for REWM?
I think in 2 years, it can easily touch Rs. 80?
Very small free float though!
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Offline Valueestimator

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Re: REWM -- Reliance weaving mills
« Reply #14 on: August 13, 2013, 04:21:31 PM »
@ Valueestimator & Ouulman
what are your targets for REWM?
I think in 2 years, it can easily touch Rs. 80?
Very small free float though!

I agree and I own good qty of it.
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Offline Rizwan Bhatti

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Re: REWM -- Reliance weaving mills
« Reply #15 on: August 15, 2013, 02:22:40 PM »
Qadir bahi iss ka rally kab tak expected ha?

Offline umair vohra

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Re: REWM -- Reliance weaving mills
« Reply #16 on: August 15, 2013, 02:27:26 PM »
 :bangin: :bangin: :bangin: :bangin: CAP?>??

Offline umair vohra

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Re: REWM -- Reliance weaving mills
« Reply #17 on: August 15, 2013, 02:29:43 PM »
SHOULD I PURCHASE AT THIS LEVEL?? WAITING FOR YOURT REPLIES SENIORS

Offline Poker Face

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Re: REWM -- Reliance weaving mills
« Reply #18 on: August 15, 2013, 03:21:39 PM »
SHOULD I PURCHASE AT THIS LEVEL?? WAITING FOR YOURT REPLIES SENIORS
2 years target to me is 80
can be earlier but again its market, no idea when market realises its potential
keep an idea of 2 years while buying
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