Nascon

[BLUEMONEY]

Originally Posted by kenebobo

From the close on friday, it seems this stock is about to reverse its direction to upwards. I always remember this stock in my morning prayer cos I staked some good money into it.

since you have prayed, i think we have to watch what happens to this one next week.

[olusolakemmy]

Originally Posted by kenebobo

From the close on friday, it seems this stock is about to reverse its direction to upwards. I always remember this stock in my morning prayer cos I staked some good money into it.

I UNDERSTAND that prayer can do anything, infact with faith i also learnt that you can move mountain.
but i can only wish you good luck.
for a company that want to change its direction, gaining about 0.4% is not a good way to start, it shows that demand is slightly above supply.
but with people like you, please always remenber the market generally in your prayers, pray that there should a goverment policy that will make money available in the hands of people, then that true foreign investor should come in and that GOD should touch the minds of our companies on NSE to always tell the truth, stop colluding with brokers and issuing houses to manipulate the market in the favour of few.

[hispy99]

Originally Posted by kenebobo

From the close on friday, it seems this stock is about to reverse its direction to upwards. I always remember this stock in my morning prayer cos I staked some good money into it.

Don't think this stock is going anywhere soon in the short-term. Their full year result was good, but not exceptional. Crossing the N22 mark (where I suspect a lot of people that particpated in the special one day sale are waiting patiently to offload) will require some effort.

For me, this is a long term play (at least for now )

[solainvest]

Now that NASCON has been marked down and today's price is N13.77, do you see it going below N10 if the current trend in the market continues?

[olusolakemmy]

Originally Posted by solainvest

Now that NASCON has been marked down and today's price is N13.77, do you see it going below N10 if the current trend in the market continues?

because there is no immediate expectation from nascon, no result, they just release one, no dividend and bonus as they just declared one, i see the shares going down.

[kenebobo]

Originally Posted by olusolakemmy

because there is no immediate expectation from nascon, no result, they just release one, no dividend and bonus as they just declared one, i see the shares going down.

I agree with you.

[stockguru]

Originally Posted by kenebobo

I agree with you.

Great team, will this also be the fate of PRESCO?

[zainabusman]

Originally Posted by stockguru

Great team, will this also be the fate of PRESCO?

In my view, Presco is selling at a premium to the market. A fall is very likely unless the market recovers very strongly b4 the closure.

[kenebobo]

Originally Posted by stockguru

Great team, will this also be the fate of PRESCO?

Though this isnt presco thread but I would like to tell you to wait a little incase you intend buying presco cos itr has a higher potentials of a fall.

Nascon don already dey fall despite saybonus never reach us to compensate for the drop in price.

[billions]

Posted Wednesday, June 25, 2008





The share price of NASCON PLC was today adjusted for dividend and bonus payment of N0.40k and 1 for 4 respectively. Ex-div share price was N13.77k

[hispy99]

Nascon Plc
Half Year Result Ended 30/06/08
2008 2007
Turnover N3.60b N2.33b
Proofit Before Taxation N803.59m N645.0m
Taxation (n160.7m) (n129.0m)
Profit After Taxation N642.87m N516.0m

[Apache]

Originally Posted by hispy99

Nascon Plc
Half Year Result Ended 30/06/08
2008 2007
Turnover N3.60b N2.33b
Proofit Before Taxation N803.59m N645.0m
Taxation (n160.7m) (n129.0m)
Profit After Taxation N642.87m N516.0m

Considering current market realities, I now strongly think that this stock is overvalued. I am assuming a forecast PAT of N1.65B (assuming a 25% growth) which gives a forward PE of 22 at today's price.
i wouldn't buy this stock until it comes yo on or below N9 (forward PE of 14.6). for those that have already, you can average down at this price.

[kenebobo]

Originally Posted by Apache

Considering current market realities, I now strongly think that this stock is overvalued. I am assuming a forecast PAT of N1.65B (assuming a 25% growth) which gives a forward PE of 22 at today's price.
i wouldn't buy this stock until it comes yo on or below N9 (forward PE of 14.6). for those that have already, you can average down at this price.

I doubt if the price would ever get to your entry price. Entering at below 12 naira is not a bad idea if you are really interested.

[Babs_O]

Originally Posted by Babs_O

Was about to do an analysis if I should go in now. With This you comment I will wait a little. If I miss it tough luck. If I get it at N 10 good.

Posted this comment earlier. Looking at recent comments perhaps I may still be able to get it even below N 10. We are watching.

[hispy99]

Equity Research Report: National Salt Company of Nigeria Plc (nascon)
By Our correspondent
Published: Sunday, 31 Aug 2008
Executive Summary and Investment Rationale

- We provide an initial coverage of National Salt Company of Nigeria Plc (NASCON) with a BUY rating and a fair price of N15.86k.

- NASCON is a leading company in the processing and distribution of refined salt with over 60 percent share of the salt market in Nigeria. We believe that current pricing does not reflect the newly acquired financial strength of the company coupled with its robust growth potential. Shares of NASCON currently are undervalued, in our opinion, with an upside potential of 74.90 percent**.

- Valuation attractiveness was spurred by impressive growth momentum recorded after a strategic turnaround of NASCON following a reverse acquisition by Dangote Salt Ltd. After years of cumulative loss positions which eroded shareholders fund, NASCON recorded an impressive turnover growth of 46,433 percent while PBT and PAT grew by 11,516 percent and 8,218 percent respectively between 2006 and 2007.

- We expect a continued market share expansion over a forecast horizon of 5 years till 2012 which is expected to translate into a compound annual growth rate (CAGR) of 25.0 percent and 22.25 percent in top and bottom lines respectively over the forecast period. We believe margins will peak at 26.0 percent while ROE may not exceed 54.30 percent during the same period.

- We are concerned that industry prospects look likely to be blurred by regulatory risks with respect to health related issues in salt production especially iodized salt even as Nigeria‘s salt manufacturers begin to focus on smaller packages.

- Besides, upside risk exists in exposure to exchange rate variability in a totally import dependent market segment. However, we do not foresee a competitive erosion of market share as entry signals are almost non-existent. Rather, we see greater growth opportunities in a more diversified business model for NASCON.

Overview of Global Salt Market

Salt Consumption…..growing with the world

Rapid industrialization and population expansion across the world have instigated a period of growth in the global salt industry. Since 2003, global output has risen by an average of 5.2 percent per annum. However, the rise in Asian output has not been sufficient to satisfy all the regional demand and the shortfall has largely been satisfied by Australian production, which rose at an average rate of over 5.5 percent from 2000 to 2006. Over the coming five years, global demand is expected to grow at an average of 3 percent per annum to reach over 300Mt in 2012 (US Geological Survey, 2006).

…..As usages multiply

Worldwide, end uses for salt continue to increase making sophisticated production highly inevitable. Chlorine and caustic soda manufacture in chloro-alkali industry accounts for about 38.5 percent, manufacture of synthetic soda ash (20 percent), edible salt for human consumption (17.5 percent) and de-icing salt (14 percent).

In highly industrialized countries, chemical applications are the key drivers of salt demand while in emerging economies, use in food and agriculture remain the major end-use applications of salt.

We foresee a future of the global salt industry that is inextricably intertwined with the economic future of regions across the world especially in Africa. As for Africa, that future is tied closely to the political decisions that will determine general economic stability and growth. Economic development is rooted in public health and infrastructure and salt production and consumption is expected to be a key determining factor in this respect. There is a widespread deficiency in iodine in developing countries especially Africa. Therefore, the stability of iodine in salt and levels of iodization are questions of importance to national planners and salt producers.

The Nigerian Salt Industry

Nigeria offers Substantial Market Opportunities

Nigeria‘s per capita consumption of salt varies between 2.2g and 6.3g a day across the country‘s agro ecological zones with an estimated consumption of 600,000 metric tons per year (household, animal and industrial).

The domestic salt industry is import dependent. Nigeria buys $US1.5bn worth of salt a year, in order to satisfy both domestic demand and its oil industry with major importations coming from Australia and Brazil. Nigeria spends a huge amount of foreign exchange on the importation of processed and raw salt as there are only salt packaging companies in the country. The Country has failed to leverage on the immense endowment with natural brine in lakes, springs and saline and rock salt deposits especially in the Northern parts of the country.

Aside NASCON, other players in the industry are a fragmented proportion with relatively small scale production and localised operating styles. Challenges facing the industry include the prevalence of illegal large packages of iodized and plain salt. We recommend stiffer regulatory intervention as health implications of substandard production and packaging are of great national concern. Besides, a stiff regulatory intervention will go a long way to boost the performance of local producers. We also recognize that the industry requires massive technological changes to harness the immense mineral deposit available in the country.

NASCON: Business Summary, Board Re-composition and Ownership Structure

Business Summary

National Salt Company of Nigeria (NASCON) was incorporated in Nigeria in 1973. Sequel to its privatization in 1982, the company was listed on the Nigerian Stock Exchange (NSE) in October 1992. The Company engages in two major activities of refining and marketing of salt in different grades namely table, kitchen and industrial. Its business mix is largely skewed towards the production of edible salt which constitutes over 96.55 percent of its turnover distribution.

Management /Technical Service Agreement:

Of strategic importance is the subsisting management and technical service agreement entered into by NASCON with Dangote Group- Dangote Industries Limited (D.I.L) in 2007. This stipulates a consideration of 2 percent of annual net revenue from its monthly sales revenue will be due to D.I.L for an initial period of 5years (2007-2011) with an option to renew for further period of 5years subject to termination by either party (NASCON or D.I.L).

Board Re-Composition & Ownership Structure:

In 2007 the Company‘s Board was re-constituted with Alhaji Aliko Dangote and Mr. Ade Adeniyi appointed as the Chairman and Managing Director respectively, along with four new directors. The Company‘s float is still significantly small as over 90 percent of total issued shares are closely held by key strategic investors and directors while the market float is less than 6 percent. Dangote Salt (Subsidiary of Dangote Industries Limited) accounts for about 62.2 percent of the aggregate holdings (2.21bn shares) as of December 31, 2007.

NASCON: Strategic Turnaround and Repositioning

Strategic Turnaround

NASCON‘s dwindling corporate fortunes marked by persistent operational losses were reversed by the consummation of a strategic reverse acquisition by Dangote Salt Limited in 2007. As the Company bounced back to profitability, holdings of the former shareholders which had been wiped off by accumulated losses were restored as a sum of N1 billion (~US$8.47million) was conceded to NASCON out of a sum of profit achieved up to the time of the consummation by Dangote Salt Limited.

This strategic move has since led to a massive improvement in the financial fortunes of NASCON. The company is currently a dominant player in the salt market (with over 60% market share) and has been strategically repositioned to maintain this competitive advantage in the Nigerian Salt Industry.

Following regulative directive on health related issues in the production and distribution of salt, the Company has recently begun packaging of its salt in sachets for improved customer satisfaction and safety. NASCON is currently pursuing a diversification strategy that may see its entry into the Seasonings sector. In order to improve shareholders‘ value and reposition itself as a big player in the manufacturing sector, the Company is already pursuing expansion strategy by exploring growth opportunities in allied products such as Tomato in the Condiments market. The Company‘s operating capacity was boosted with the construction of additional sachet packing capacity. This singular investment is anticipated to increase total capacity to over 600,000 tons, thus making NASCON the largest provider of salt in small and big packs in Africa.

Moreover, the management is strategically focused on continued market expansion and growth in selected markets within Nigeria and other African countries and beyond. NASCON has commenced export of its products by distributing to neighboring West African countries of Niger and Chad. To support this expansive growth, various sales support services and effective supply and distribution chains have been instituted just as the Company is currently harnessing opportunities within the African region.

Full report is at The Punch: Equity Research Report: National Salt Company of Nigeria Plc (nascon)