MGL - Magontec Limited

[System]

Magontec Limited (MGL) was formerly known as Advanced Magnesium Limited (ANM).

Previous discussion of this company can be found in the ANM thread: https://www.aussiestockforums.com/forums/showthread.php?t=1116

 

[springhill]

MC - $13m
SP - 2.8c
Shares - 425m
Options - NQ
Cash - $10.7m (+ potential for $2.1m by 12/2013) see asterisk below

Major Shareholders
KWE(HK)Investment Development Co Limited 13.13
Qinghai Salt Lake Magnesium Industry Limited 13.04
Straits Mine Management Pty Limited 9.53

MGL has too many shares on issue for my criteria, but this may interest others. It has cash and a deal with Qinghai Salt Lake Industry Company Limited (QSLI) on the cards.
Background on Qinghai Salt Lake Industry Company Limited
QSLI is the parent company (89.4% shareholder) of QSLM. QSLI was founded in 1952 and listed on the Shenzhen stock exchange in 1997 (Code:000792.SZ). In December 2011 QSLI recorded annual revenues of RMB 6.78 billion (A$1.07bn) and Earnings Before Tax of RMB 3.35 billion (A$531m). The company employs 9,200 people and has a current market capitalisation of RMB49.6 billion (A$7.87bn)

Am unable to paste materials relevant to MGL's announcement on June 21. Link below
http://www.asx.com.au/asxpdf/20120621/pdf/426yqgd3cc3058.pdf

**Magontec Limited (MGL) Signs Conditional Contract to Sell Its Interest in Joint Venture Entity Henan Keweier Alloy Materials Co., Limited (HNKWE)
The principal terms are as follows.
i. The buyer has agreed to acquire MGL’s interest for an amount equal to the lesser of $2,100,000 and the AUD equivalent of 45% of the net assets of HNKWE as at the date of payment of the purchase price.
ii. The purchase price is due to be paid on or before 31 December 2013.
iii. In the period to approval (by both PRC authorities and MGL shareholders) of disposal of MGL’s interest, MGL has ceded control of HNKWE to the prospective buyer and residual HNKWE shareholders. Should either of the aforementioned approvals not be forthcoming, MGL will reassume control.

 

[Cam019]

 

[barney]

Quick look says around $30 million market cap with approx. $9 million in the bank …. Good ratio.

Company is turning over a lot of revenue with their Magnesium Projects but suffered a profit slump (still profit) over the last 12 months for various reasons.

If they can increase their profit margins even slightly, they have the potential to increase their share price quickly over the next year or two …..

Watchlist

 

[SyBoo]

Up 39% at time of writing, because of reports of a global magnesium shortage.

They have a plant in China which recycles scrap magnesium into ingots, cathodes, etc.

I would assume the price of scrap Mg has also risen, and I'd hate to see the companies latest electricity bill. Do they still have electricity to run their plant?

Oh wait, maybe that's why there is a Mg shortage, because companies like this one can not do what there supposed to do. Anyway it's up 39%.

 

[Dona Ferentes]

Up 39% at time of writing, because of reports of a global magnesium shortage.

and up another 20% today. Got to 65c and closed at 58c

China says the West should respect its 'own pace' as Europe and US face magnesium supply crisis​

Millions of jobs are under threat because China has slashed its magnesium output

European industry groups fear remaining magnesium stocks will run out by the end of November as China's power crisis affects the global supply.

www.abc.net.au

.... rare earths are so last Tuesday

 

[Dona Ferentes]

here we go again?

 

[Dona Ferentes]

Magontec is already a producer of magnesium products and it has come in with an expected net profit after tax of $13m for the first six months of 2022. The second half is not expected to be a strong, as ... "[c]urrently, magnesium prices and general economic and market conditions are weakening. "

“Trading conditions have exceeded company expectations and reflect high underlying magnesium prices, volume growth in some product lines, and higher levels of demand,” exec chair Nic Andrew says. “Importantly, this record result in the first half of FY2022 means that Magontec Limited has no net debt, as of 30th June 2022, and a robust financial platform.”

MGL has three businesses: magnesium scrap recycling, magnesium anode production and a primary mag alloy plant in China. It is the primary alloy plant, currently in care and maintenance, which could be a game-changer for the company.

“We are waiting for the adjacent electrolytic smelter to start delivering us material,” Andrews has said. “We think they will later this year or early next year.”

 

[Dona Ferentes]

here we go again?

And ran on recent results, for a while

Profit drivers in 2022
• Sharply higher Mg price through to mid 2022
• Inventory boost
• Pure Mg deficit in USA (continuing)
• Strong market position in each product
• Production efficiencies

...& even paying a 1.2c unf dividend

 

[finicky]

Got interested. Seems very cheap based on last two years ROE and BV. Prospective as well. Then got turned off by the alloy manufacturing plant in China - they might steal it or use it in a reprisal or something.
Then there was the 'please explain' from the ASX re Appx 3Y perks and reading on from that the incredibly complicated structure of the performance based incentive plan. I did look long enough to see that management gets 25% vestment if the shares are @ 0.45, a price often reached or exceeded in 2022/23.
Also the name - Magontec - very barbaric neologism

 

[Dona Ferentes]

Got interested. Seems very cheap based on last two years ROE and BV.

Someone else got interested. ASX speeding ticket recently

1. No
2. N.A.
3. If the answer to question 1 is “no”, is there any other explanation that MGL may have for the recent trading in its securities?
Magontec Response:
We are not aware of any other reasons for the price and volume changes in share price and trading.
On 5th July 2023, the Chair of MGL was interviewed by AusBiz, a dedicated streaming service business channel. The interview was subsequently published on the AusBiz platform and on the Magontec website on 6th July 2023.
We do not feel this event would have been a sufficient explanation for the increased price and traded volumes
4. In compliance

did look long enough to see that mgmnt gets 25% vestment if the shares are @ 0.45, a price often reached or exceeded in 2022/23.

..punched through 45c, but in July... (23/24)

 

[Dona Ferentes]

here we go again !

sales down, earnings down, saved by balance sheet
.
Key Highlights
• Net cash balance has increased to $12.0 million as at 30 June 2023 compared to $1.2 million at the end of pcp.
• Operating cashflow of $11.5 million for the half, compared to $8.9 million in the pcp.
• Board declares interim dividend (unfranked) of 0.6 cents per share, in line with HY22.
• No net debt.
• Robust result with EBITDA of $5.9 million and Underlying NPAT* of $3.3 million, despite a 41% fall in average Pure Mg prices compared to pcp.
• Net Tangible Assets per share have increased to 71.6 cents compared to 62.8 cents per share in the pcp.
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