Author Topic: DOL -- Descon Oxychem Ltd.  (Read 39035 times)

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um@ir

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DOL -- Descon Oxychem Ltd.
« Reply #-1 on: October 06, 2008, 02:36:24 PM »
All About Descon Oxychem Ltd.
« Last Edit: February 13, 2012, 02:31:24 PM by M&M »

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DOL -- Descon Oxychem Ltd.
« Reply #-1 on: October 06, 2008, 02:36:24 PM »

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Re: DOL -- Descon Oxychem Ltd.
« on: August 06, 2009, 11:20:14 AM »
DOL – Initiate coverage with Buy rating
???? We initiate coverage on Descon Oxychem Limited (DOL) with a Buy rating and a
DCF based PO of PRs14/sh. DOL currently trades at FY10E P/E of 6.2x and
EV/EBITDA of 2.9x and offers 52% upside to our PO.
???? DOL’s 30k tpa hydrogen peroxide plant started commercial operations in March 09.
We believe domestic demand of 59k-tons is sufficient to absorb local supply.
???? Since product prices remain linked to international market vs rupee based prices of
the most cost elements, DOL enjoys positive correlation to Pak Rupee depreciation.
???? The recent regulatory measures of (1) doubling peroxide import duty to 10% and (2)
proposed inland freight subsidy on exports should benefit the industry in general
and DOL in particular as the company has already started exports to Middle East.
???? DOL’s exclusive technology contract with Chematur and long gestation period of ~
4 years for new plant remain key deterrents for potential new entrants.
Initiating coverage with a Buy
We initiate coverage on Descon Oxychem Limited (DOL), a hydrogen peroxide producer, with a
Buy rating and DCF based PO of PRs14/sh. Our optimism on the stock stems from (1) domestic
supply deficit of hydrogen peroxide, (2) group synergies, (3) supportive government regulations
and (4) positive earnings correlation with Pak Rupee depreciation against US dollar. DOL’s 30,000
tons hydrogen peroxide (H2O2) plant started commercial operations in Mar-09 and we expect the
company to experience its first profitable year in FY10E with EPS of PRs1.46. DOL is currently
trading at FY10E P/E of 6.2x and EV/EBITDA of 2.9x , ~10% discount to market multiple and offers
52% upside to our PO.
Venturing into a supply deficient industry with positive correlation to ex-rate
We believe market conditions are ripe for DOL where domestic demand of 59k tons in FY09E is
sufficient to absorb local supply and the company’s major competitor is yet to achieve 100%
utilization. Going forward, we eye 1) expansion in paper and board industry and 2) growing
packaged food industry (DOL is the only domestic manufacturer of food-grade hydrogen peroxide)
as key drivers of 5% p.a. demand growth over FY10-12E. Meanwhile, any improvement in textile
volumetric sales – the largest domestic consumer for peroxide – and stringent environmental
regulations could be upside triggers. Since product prices remain linked to the international market
vs Rupee based prices of most cost elements, DOL enjoys positive correlation to the ex-rate.
Favorable regulatory framework
We believe recent measures of doubling peroxide import duty to 10% and proposed inland freight
subsidy on exports should benefit the industry in general and DOL in particular. Since DOL has
already exported small quantity of food grade peroxide to Middle East, the subsidy should help
DOL improve penetration in regional markets.
Technology and long gestation period favor medium-term sustainability
DOL has exclusive license to use Chematur (one of the largest supplier of hydrogen peroxide
technology) technology in Pakistan. Moreover, stringent environmental and regulatory
requirements and long gestation period of nearly 4 years remain key deterrents for potential new
entrants. Eyeing this, we believe DOL is well poised to capture market share and grow in the
industry over the medium term.
Key downside risks
DOL being highly leveraged (60%) remains sensitive to interest rates movement. Sharp downturn
in the textile sector, volatility in prices and supply of natural gas - being main raw material – and
dumping from China remain other key downside risks.

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Re: DOL -- Descon Oxychem Ltd.
« Reply #1 on: October 02, 2009, 01:20:25 PM »
DOL    Fri, Oct 02 2009    10:30

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Re: DOL -- Descon Oxychem Ltd.
« Reply #2 on: October 05, 2009, 11:55:03 AM »
05-OCT-09 DOL Descon Oxychem FINANCIAL RESULT FOR THE YEAR ENDED 30/06/2OO9
05-OCT-09 DOL Descon Oxychem PROFIT/LOSS BEFORE TAXATION RS. IN MILLION (149.094)
05-OCT-09 DOL Descon Oxychem PROFIT/LOSS AFTER TAXATION RS. IN MILLION (121.451)
05-OCT-09 DOL Descon Oxychem EPS = (1.26)
05-OCT-09 DOL Descon Oxychem ANNUAL GENERAL MEETING WILL BE HELD ON 26/10/2OO9
05-OCT-09 DOL Descon Oxychem BOOK CLOSURE FROM 19/10/2009
05-OCT-09 DOL Descon Oxychem BOOK CLOSURE TO 26/10/2009

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Re: DOL -- Descon Oxychem Ltd.
« Reply #3 on: November 24, 2009, 11:07:16 AM »
DOL: reiterating our liking post mgt call

Following our discussion with the management, our confidence on DOL's story has further increased given (1) recent H2O2 price hike to PRs37,000/ton, (2) plant operation above its rated capacity and (3) growing export avenues.

We expect DOL's EBITDA margin to improve from 13% in 1QFY10 to 39% by 3QFY10E. This should sequentially improve bottom-line to black by 3QFY10E.

DOL has already started exports to Sri Lanka and Bangladesh and is eyeing the Middle Eastern market to further expand into the regional markets.

While the govt is already taking a favorable stance towards H2O2 industry, anti-dumping duty or further tariff hike should provide stability to the domestic market.

We reiterate our liking for DOL with DCF based PO of PRs12/sh (revised from PRs14/sh following 1QFY10 results). DOL is currently trading at FY11E P/E and EV/EBITDA of 5.6x and 3.2x; offering 83% potential upside from current price.

Offline Research Doctor

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Re: DOL -- Descon Oxychem Ltd.
« Reply #4 on: January 30, 2010, 11:29:24 PM »
DOL making another U......expecting to go to 3-months low.
Although PO of 14 was expected from DOL, it made two recent moves to reach level of 8 from 7. Now again it is coming to 7. but this time it will move to 6 then rise........b/c its history........one day it moves up rapidly,  next day it falls, then keeps coming down gradually, then rises gradually and shoots for one day. In whole of this it makes a true "U" shaped graph not a "V" shape. And all thiis "U" making takes one month. So now it will be at 6 at about 15 feb......where we should buy it at 6-6.25. Then selling it at 8.0 on march starting. its half year bm also expected in feb, but nothing extraordinary expected from it. so go behind the cycle to earn

Offline shrawan

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Re: DOL -- Descon Oxychem Ltd.
« Reply #5 on: January 31, 2010, 03:31:10 AM »
DOCTOR SAHIB AAP BARAY SHARES KA ILAJ NAHEE KURTAY KIA? I MEAN LIKE POL,PPL,NML,LUCKY,OGDC WAGERA....AAJ KUL NML KEE TABIAT KHARAB HA US KA KOI ILAJ KARAIN...WEAKNESS INCREASE HE HOTEE JA RAHEE HA...KAHEN YA TYPHOID KEE INDICATIONS TO NAHEE...

Offline Research Doctor

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Re: DOL -- Descon Oxychem Ltd.
« Reply #6 on: January 31, 2010, 03:48:50 AM »
Dear sharwaan
I like more to talk of lower value shares b/c of high percentage profit. If u have 1000 NML, investing Rs 65000, and it rises 1 Re, u get 1000 profit. But with same investment in lower shares like DOL u will have 10000 shares and if it rises re 1, u get 10K rs for same amount. hai na more faida??
NML and others are actually index influencing shares. U know index fell in last two weeks, and lot of selling was seen in these blue chips. Actually a week ago was the time to sell them, and now is the time to buy them. If u have NML and have not sold it on right time, or u have bought it above 65, then i would suggest u to keep patience. It will soon be up. remember safe limits for NML are buy@60, sell @ 70, re 2+- ho sakta hai. Dont loose hope as these blue chip shares move to their targets again and again very often. Lower shares have longer cycles than these big ones. also if u r interested in ATRL, it has come to safe buy limit of 117, take and sell @ 140-150. Similarly THALL is also on lower limit, best to buy now @ 80 and sell @ 100-105. AHSL buy@ 43-45, sell @ 50., Dont buy OGDC now, if u have sell it, LUCKY also not fine to buy now, sell if it cathces 70 and re-buy @ 60-62. I hope u happy.

Offline kashif_khan

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Re: DOL -- Descon Oxychem Ltd.
« Reply #7 on: February 08, 2010, 02:36:50 PM »
Today Hit Upper Cap.

Any news.

Offline kashif_khan

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Re: DOL -- Descon Oxychem Ltd.
« Reply #8 on: February 23, 2010, 10:49:27 AM »
Bhaio Is 22-FEB-10 ko announcement thaa.

Is ke Result ki kia updates hain.

Offline Farzooq

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Re: DOL -- Descon Oxychem Ltd.
« Reply #9 on: February 23, 2010, 11:05:53 AM »
Bhaio Is 22-FEB-10 ko announcement thaa.

Is ke Result ki kia updates hain.

lps 1.4
TOP PICKS
Engro fatima ogdc pol pso dgkc mlcf kapco npl ubl atrl nml efoods aicl hcar searl

Offline guru1

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Re: DOL -- Descon Oxychem Ltd.
« Reply #10 on: October 24, 2010, 05:01:15 PM »
NTC has reportedly increased anti-dumping duty on chinese hydrogen peroxide import at 71% and on korean etc at 25%. Price in local market have gone to 50 from 38.  What earning impact do this will ve on SPL and DOL earnings. Anybody has who has good analysis in it. Is ko bahut mar parh chuki ab kia dhiyan ha,DOL ka  14 ya 12 ka target pora ho sakta ha ya nahi.

Offline HANAN CHEEMA

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Re: DOL -- Descon Oxychem Ltd.
« Reply #11 on: October 25, 2010, 10:07:21 AM »
12 ya 14? :shock: :shock:

Offline saeedpk2@yahoo.com

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Re: DOL -- Descon Oxychem Ltd.
« Reply #12 on: November 09, 2010, 06:54:50 PM »
uper cap
 :banana: :console:

Offline jattala

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Re: DOL -- Descon Oxychem Ltd.
« Reply #13 on: November 09, 2010, 10:59:09 PM »
Kaisay pata chala saeed sb.

Offline Forecaster

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Re: DOL -- Descon Oxychem Ltd.
« Reply #14 on: November 10, 2010, 04:50:12 PM »
Research Doctor,

Kindly advise regarding Netsol stocks??  :arrowhead:Sorry for asking on DOL page..


Offline tariqdbest

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Re: DOL -- Descon Oxychem Ltd.
« Reply #15 on: November 26, 2010, 04:35:54 PM »
yesterday I met a person who believes DOL can get to around Rs.10 by Feb 2011

Offline tariqdbest

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Re: DOL -- Descon Oxychem Ltd.
« Reply #16 on: November 26, 2010, 04:37:00 PM »
I believe it will not cross Rs8

Offline nabeel

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Re: DOL -- Descon Oxychem Ltd.
« Reply #17 on: December 23, 2010, 01:42:10 PM »
DOL: All-time high prices to boost earnings

Local Hydrogen Peroxide (H2O2) prices have touched all-time high of PRs70/kg as (1) global pulp & paper industry is on a roll and (2) imports have started to slow following imposition on anti-dumping duties.

Adjusting for higher selling prices, we revise DOL's FY11E EPS estimates by PRs0.29 to PRs0.83 and PO to PRs10.8/sh, though retain our estimates for going forward.

Although the recent gas price hike by OGRA was lower than expected both the utilities have moved the courts, where last year's precedence of relaxed UFG terms may support their case for increase in gas prices.

DOL has appreciated 17% since our last upgrade on 6th Dec and is currently trading at FY12E P/E of 5.6x and offers 28% upside to our PO. We reiterate Buy.

In the near-term, we see sustainability of prices at current levels and company posting first-ever quarterly profits for 2QFY11E (PRs0.2/sh) as key price triggers.

kasb

Offline HAMDANI_Punjtani

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Re: DOL -- Descon Oxychem Ltd.
« Reply #18 on: February 21, 2011, 03:33:02 PM »
Amazing Result By DOL . :banana: :clap1:
Buy call
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