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ZGL - Zicom Group

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well it looks as if venetrade are out and the buy sell ratio look very healthy. 60c this week on the back of the asx heading south. No predictions for the share price but an announcement that the share buy has been shelved shouldn't be toofar away.
 
article from the Age newspaper:


Share price on the boil as Zicom sizzles Richard Hemming April 19, 2011
.

SEXY is the word for Zicom. The word doesn't come to mind when associated with manufacturing, but investors in the tightly held Zicom Group would probably disagree - the stock has almost tripled in three months.

The rise in the ASX-listed Singapore-based company has coincided with a profit upgrade on February 7, which pre-empted its interim profit result in which revenue climbed 49 per cent to almost $S80 million (A$54 million) producing a $S10.4 million profit before tax, more than double the same period a year earlier.

The company has turned itself into a type of manufacturing conglomerate, but a key to its growth is its success in the oil and gas field, producing winches for drill rigs, as well as gas meters and regulating systems.

Advertisement: Story continues below The oil and gas division contributes about 42 per cent of revenue.

But Zicom's profit growth was also due to its other two divisions. The construction division (40 per cent of sales) increased profit because of lower costs after transferring from Australia to Thailand its factories that make cement mixers.

The rest of the income comes from its engineering division, which has operations as diverse as medical technology to manufacturing production lines.

With its shares at 57 ¢, the company has $120 million market cap, and founder and chief executive G. L. Sim says the key to the company is not that the oil price is climbing back towards record levels, but the 50 or so engineers it employs in Singapore, Indonesia and Bangladesh.

They provide the innovation and technical expertise he says is central to Zicom's business.

Helping things along was also a bullish report by Austock Securities in late March, valuing the stock at 75 ¢.

The climbing stock price comes as Ventrade (a Singapore bus construction company) sold most of its 14.4 per cent stake, which finally gave investors some shares to trade. The stock is tightly held. with G. L. Sim owning 34 per cent and senior management holding another 20 per cent.

A lack of liquidity is just one risk in this manufacturing play. Other factors include the difficulty in keeping on top of its operations, which are mainly in Singapore and Thailand. Most of its earnings are in Singapore dollars, which have been declining against the Australian dollar.

Lastly, its engineering division's growth relies on start-up research and development projects.

In the end, this could be complicating matters for Zicom. "We just focus on making machines," as G. L. Sim says.


Read more: http://www.theage.com.au/business/s...com-sizzles-20110418-1dlmp.html#ixzz1Kin7TAfO
 
Just wondering about the extent to which the rising A$ will affect zicom.
It reports in S$, and I assume receives its revenue in an array of currency, thai, sing, US, A$....would this be correct? Its hard to find this out...can anyone point me in the right direction?

So really, as the company is reporting in S$, there is no translation risk...however if they do need to convert back to A$ for any reason...they will be paying at least 10% more S$ than before 6 months ago ($1AU was worth S$1.18, now its worth over S$1.30).

Can anyone with more knowledge shed some light on this...
 
Filled up on ZGL today, not sure if I hit the bottom but pretty happy withthe price I paid.
 
robusta said:
Filled up on ZGL today, not sure if I hit the bottom but pretty happy withthe price I paid.
Click to expand...

I was looking at them also and saw them as quite a bargain but what stopped me is how ive their value remaining constant until 2013.
ie
2011 $1.28
2012 $1.23
2013 $1.23

Still under 50 cents is great cos even if SP gets to $1 in 2013 if not sooner, thats a 100% return.
I just dont know enough about ZGL to invest in them.
 
ZGL has the strength to go on with it growing market ,a few broker strong buys + roger m keen on it
 
robusta said:
Filled up on ZGL today, not sure if I hit the bottom but pretty happy with the price I paid.
Click to expand...

There seems to be a bit of interest in it today again robusta, nice entry.

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Boggo said:
There seems to be a bit of interest in it today again robusta, nice entry.

(click to expand)
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Thankyou Boggo

I bought my first parcel 4/5 @ $0.555, doubled my holding on 25/5 @ $0.535 then bought the same amount again on the same day when the price fell to $0.48

Average cost including brokerage $0.528, 12.4% of portfolio, 9.8 % gain so far, looking to hold long term.
 
robusta said:
I bought my first parcel 4/5 @ $0.555, doubled my holding on 25/5 @ $0.535 then bought the same amount again on the same day when the price fell to $0.48
Click to expand...

I got in on the last run up but sold a week before it topped, bought back in again in early June and added 50% more today, average is now 0.527. (ZGL is one of only two stocks that I carried over from last FY, other being PRR, added a few more to the list this week though)
 
Interesting to see that before the half year profit guidance on the 7th February, there was an increase in the shareprice of around 20% the week beforehand.
Maybe a bit of a leaky boat.
A longterm hold for me too.
 
ZGL's book value is around 28c so it is currently trading with a PB close to 1. The company is making profits (PE under 6) and paying dividends. Also, according to commsec's "consensus" forecasts, the company will grow significantly over the next few years. Sure, take the growth with a grain of salt but I would expect there to still be some profit growth.

What am I missing? This company looks very cheap! Could someone please enlighten me - what is wrong with ZGL?

Thanks
 

A few bits of analysis here. It's very cheap looking back. It may or may not be very cheap looking forward.

https://www.aussiestockforums.com/forums/showthread.php?t=23106&p=649994&viewfull=1#post649994
 
From speeding ticket to profit warning in 24 hrs... that's not something you see everyday.

ZGL down 1/3 as profits down 55-60% compared to last year.

According to management ZGL's revenue and profits lacks behind the marine build cycle by 2 to 3 years. Those who are buying today would be hoping that this is the bottom of the cycle.

The chart now has massive resistance at 24c.

 
I think it might be good in 6 months time. Even with the profit downgrade depending on what cashflow shows it might not be so dire. As you say massive resistance but if it drops to 10 or starts to break through resistance before the next reporting season I might be interested.
 

Last year FY NPAT was S$14m. A 60% drop means S$5.6m or ~A$4m, or 1.9cps. So 10c would definitely be a bargain (famous last words) and you'd expect accumulation to start before the mid teens.

Confirmed order is S$41m as at 31 Dec, with no information on how long this stretches out for. Revenue last year was S$147m so the $41m looks a bit thin even if it's all for the next 6 months. But the profit warning should have accounted for that already.

There must be a leading indicator somewhere for companies like ZGL and MCE - both marine/ship building related, long lead time, high capital intensive that are massively profitbale in good times but lag the cycle by 12-24 months... Are there stats for worldwide ship tonnage built or something like that?
 
Didn't Roger "Rabbit" Montgomery give this company a plug six-twelve months ago? I am fairly certain that he wrote an article calling it a "stock of the future" due to "peak oil looming" or something similar.

I bet he wouldn't admit owning it if he still holds it today! (Especially after the MCE beat up).

Another stock that is heavily reliant on cyclical highs, people often forget that when paying "value" prices in the good times.
 

Bit unfair and not completely factual, He put an intrinsic value on it of 52 cents around about March of last year, it was 36 cents at the time, it went to 65 cents.
I doubt he was still holding it by August.
 
Clansman said:
Bit unfair and not completely factual, He put an intrinsic value on it of 52 cents around about March of last year, it was 36 cents at the time, it went to 65 cents.
I doubt he was still holding it by August.
Click to expand...

I remember him mentioning he sold his holding on his blog, but I think it was after ZGL suffered the first drop in early August and undoubtedly he sold it before the August fall (after a period of spruiking) ... ala MCE.

Shame as ZGL was a find a few years ago, since then many people followed the masses like sheep (myself incl) and will be hurting from this drop.

That's why always, always DYOR.
 
If you go to his website and listen to his podcast from last year, you will hear him refer to having sold it 3-4 weeks prior to the podcast which was in early August. That would make it mid or early July.
His reasoning was due to a slowdown in the shipping business in Singapore.
Seems he was right on the money.

He isn't obliged to divulge when he no longer holds stocks but in this case was happy to pass on the info.

Seems a pretty straight shooter, I just don't think people listen completely to what is said.

ZGL is still not a bad company inmho and I will be looking at an entry point., having missed the boat last time.
 
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