Colombo Dockyard a stock to eye for

Attached as PDF.

COLOMBO DOCKYARD

*Established 1982
*Sector : Construction & Engineering
*A unit of Japan's Onomichi Dockyard Company

Note : This is a stock which has not been discussed much on the forum and the retailer interest has been less upto now. Hope the below evaluation will help you to identify whether it is a potential or not. My objective is not to give any buy recommendation but this is for analysis only.


Watch VIDEO about DOCKYARD
https://www.youtube.com/watch?v=ppKGLgJtRMU

MISSION :

We strive:
• To be the most competitive and viable business entity in South Asia in Shipbuilding, Shiprepair, Heavy Engineering
and allied activities,
• To efficiently and effectively manage all our resources,
• To achieve sustainable growth,
• To enhance the interests of our Stakeholders, and thereby contribute to the pursuit of our vision.


* Highlight 'Asia's 200 Best Under A Billion . Sri Lanka Dockyard, Royal Ceramics in Forbes list : http://lbo.lk/fullstory.php nid=944882411


2010 Financials :

March 10 Eps : 3.86
June 10 Eps : 8.47
Sept 10 Eps : 11.35
Dec Eps : 10.80 ( included tax refund)

2010 Annual EPS : Rs 30.40

*Note that there was a small dip in overal profits from 2009 Annual EPS : 31.45 ( reason explained below)

Current Trading Price : Rs 282
Current PE : 282/30.45= 9.26

Valuation :

At PE of 10 : Rs 304
At PE of 12 : rs 365
At Pe of 15 : Rs 456




Price History

At April 15th 2010 ( 1 Year ago) : Rs 288.75
At April 12th 2011 ( Now) : Rs 282

Stagnant for over 1 year!!


Discussion :

* Negative : Ship Repair revenue which bring higher margin of profit went down in 2010 compared to 2009. Mainly due to
tough competition especially from Chinese yards in the repair business.

"Revenue from ship repair fell sharply to 4.2 billion rupees in the 2010 financial year from 6.7 billion rupees the previous
year"

* Negative : As transaction are mainly doen in US$ , appreciation of rupee to a $ is bad for the company




Positive Growth prospect and news

* Revenue from ship building shot up to 9.6 billion rupees from 5.6 billion rupees.
http://lbo.lk/fullstory.php?nid=1710350755

* With Port expansions in Sri Lanka more ship can be attracted helping profitability of DOckyard in the long run
* Ship repair order books full until 2012 ( http://lbo.lk/fullstory.php?nid=1710350755)

1) Sri Lanka dockyard lays keel for new supply vessel : http://lbo.lk/fullstory.php?nid=510994458
2) Sri Lanka dockyard reveals ship repair revenue, http://lbo.lk/fullstory.php?nid=1688309522
CDL undertakes over US$4 million worth repairs : http://www.ft.lk/tag/colombo-dockyard/
3) Dockyard handles LPG carriers : http://www.ft.lk/2011/04/12/dockyard-handles-lpg-carriers/
http://www.lankanewspapers.com/news/2011/4/66118.html
4) Sri Lanka Dockyard wins order for supply vessel. http://lbo.lk/fullstory.php?nid=1815862304


2 Ship delivered so far in 2011:

1) Sri Lanka Dockyard delivers support vessel : http://lbo.lk/fullstory.php?nid=1879239462
2) Dockyard completes first complex, sophisticated ROV support vessel : http://www.ft.lk/2011/02/10/dockyard-completes-first-complex-sophisticated-rov-support-vessel/
http://www.ft.lk/tag/218th-new-ship-that-colombo-dockyard-has-built/

3 Ships to be delivered in 2011:

1) 130 T BP Anchor Handling Tug Supply Vessel , NC/0219 Eagle High Limited, State of Samoa June 2011 Singapore
2) 130 T BP Anchor Handling Tug Supply Vessel , NC/0220, True Wisdom Limited, State of Samoa ,September 2011
Singapore
3) 100 Passenger Launch, NC/0221, Road Development Authority January 2011 Sri Lanka


Broker Buy recommendations

1) http://www.ft.lk/2011/01/24/stock-market-to-ride-on-flamboyant-corporate-earnings/



Top 20 Shareholders AS AT 31.12.2010

Mainly institutional interest with HNW investors.

1 ONOMICHI DOCKYARD COMPANY LIMITED 51%
2 EMPLOYEES PROVIDENT FUND 14.54%
3 SRI LANKA INSURANCE CORPORATION LTD. GENERAL FUND 5.00%
4 SRI LANKA INSURANCE CORPORATION LTD. LIFE FUND 4.99%
5 SRL LANKA PORTS AUTHORITY 3.04%
6 PAINTS AND GENERAL INDUSTRIES LTD. 2.40%
7 MR. S.E. CAPTAIN 2.10%
8 EMPLOYEES TRUST FUND BOARD 1.67%
9 PERSHING LLC S/A AVERBACH GRAUSAN & CO 0.90%
10 AVIVA NDB INSURANCE PLC A/C NO 7 0.55%
11 NATIONAL SAVINGS BANK 0.55%
12 MR. M.M. UDESHI 0.52%
13 BANK OF CEYLON NO 2 A/C 0.46%
14 PAN ASIA BANKING CORPORATION PLC/MR MORARJ MEGHJ 0.35%
15 DFCC BANK A/C 1 0.34%
16 HSBC INTL NOM LTD. JPMCB-J.P.MORGAN CLRARING CORP. 0.32%
17 LANKA MILK FOODS (CWE) LIMITED. 0.30%
18 UNION ASSUARANCE PLC NO 01 A/C 0.22%
19 MR. A.P. SOMASIRI 0.21%
20 DAVID PEIRIS MOTOR COMPANY LIMITED 0.21%



TWENTY( 20) MAJOR SHAREHOLDERS AS AT 31.12.2009

1 ONOMICHI DOCKYARD COMPANY LIMITED 51%
2 HORIZON REPRESENTATION OF COMPANIES LLC. 10.65%
3 HORIZON ENERGY LLC. 10.65%
4 SRI LANKA INSURANCE CORPORATION LTD. LIFE FUND 4.43%
5 SRL LANKA PORTS AUTHORITY 3.04%
6 EMPLOYEES PROVIDENT FUND 3.02%
7 MR. M.M. UDESHI 1.15%
8 THURSTON INVESTMENTS LIMITED 1.11%
9 MISS A.M. UDESHI 0.75%
10 PERSHING LLC S/A AVERBACH GRAUSAN & CO 0.62%
11 BHADRA INVESTMENTS LIMITED. 0.55%
12 BANK OF CEYLON NO 2 A/C 0.51%
13 MAS CAPITAL (PRIVATE) LIMITED. 0.39%
14 MRS.P.N. BHATT 0.90%
15 EAGLE INSURANCE COMPANY LIMITED. 0.37%
16 LANKA MILK FOODS (CWE) LIMITED. 0.30%
17 DFCC BANK 0.28%
18 MR. K.R. KAMON 0.23%
19 MR. A.P. SOMASIRI 0.22%
20 MR K.N.J. BALENDRA 0.21%