The Company has two (2) wholly-owned subsidiaries: South Western Cement Corporation (“SWCC”) and KB Space Holdings, Inc. (“KSHI”). SWCC is organized primarily for the manufacture and sale of cement and its by-products and owns mineral rights in Malabuyoc, Cebu. KSHI is a land holding company that owns several parcels of prime commercial land in Mandaluyong City.
The competitive strength of the Company is founded on its end-to-end production strategy which
seamlessly integrates critical raw material sourcing with modern manufacturing technology resulting to one of the most efficient cement manufacturing operations in the country. The Company has the largest integrated single plant production capacity in terms of cement output in the Philippines through its primary cement production facility located in Barangay Akle, San Ildefonso, Bulacan (the “Bulacan Cement Plant”). The Bulacan Cement Plant consists of two (2) production lines with an annual combined cement production capacity of approximately 5.1 Million MT or 130 Million bags per annum. It is strategically located near demand-centric areas and in direct proximity to rich limestone and shale reserves covered by the exclusive mineral rights of the Company. In addition, the Company also maintains a grinding and packaging facility in Limay, Bataan which can process 12 Million bags of cement per annum. Eagle Cement is currently in the process of constructing a third production line in its Bulacan Cement Plant (“Line 3”), due to be completed in 2018 which will increase its cement production capacity by 2 Million MT or about 50 Million bags per annum. This will bring total production capacity to about 7.1 Million MT or about 180 Million bags per annum, enabling the Company to consolidate its position as one of the leaders in the cement industry.
The Cebu Cement Plant will be a fully integrated plant built to manufacture cement using the raw materials to be extracted under the MPSAs of the Company in the province of Cebu. The plant will use approximately 2.5 Million tonnes of limestone per annum which will produce an estimated 1.5 Million tonnes to 2.0 Million tonnes of cement. Majority of the cement produced will be dispatched from the plant by sea to a network of bulk cement distribution terminals across the Visayas and Mindanao. Production in the Cebu Cement Plant is expected come on stream in 2020.
Eagle Cement currently distributes its products in the Luzon region which constitute about 65% of total cement demand in the Philippines, particularly in the following areas: National Capital Region (Metro Manila), Region I (Ilocos Norte, Ilocos Sur, La Union, Pangasinan), Region II (Batanes, Cagayan, Isabela, Nueva Vizcaya, and Quirino), Region III (Nueva Vizcaya, Nueva Ecija, Bulacan, Pampanga, Tarlac, Bataan, Zambales), and Region IVA (Cavite, Laguna and Batangas, Rizal, and Quezon) . As of 2015, NCR still serves as the center of construction and infrastructure activity in the country. Eagle Cement is considered one of the leading players in areas with the highest economic activity in the Philippines with an estimated market share of 30% in NCR, Region III, and Region IVA, based on internal Company data. As of the date of this Prospectus, the Company does not sell its products in other countries.
The competitive strength of the Company is founded on its end-to-end production strategy which
seamlessly integrates critical raw material sourcing with modern manufacturing technology resulting to one of the most efficient cement manufacturing operations in the country. The Company has the largest integrated single plant production capacity in terms of cement output in the Philippines through its primary cement production facility located in Barangay Akle, San Ildefonso, Bulacan (the “Bulacan Cement Plant”). The Bulacan Cement Plant consists of two (2) production lines with an annual combined cement production capacity of approximately 5.1 Million MT or 130 Million bags per annum. It is strategically located near demand-centric areas and in direct proximity to rich limestone and shale reserves covered by the exclusive mineral rights of the Company. In addition, the Company also maintains a grinding and packaging facility in Limay, Bataan which can process 12 Million bags of cement per annum. Eagle Cement is currently in the process of constructing a third production line in its Bulacan Cement Plant (“Line 3”), due to be completed in 2018 which will increase its cement production capacity by 2 Million MT or about 50 Million bags per annum. This will bring total production capacity to about 7.1 Million MT or about 180 Million bags per annum, enabling the Company to consolidate its position as one of the leaders in the cement industry.
The Cebu Cement Plant will be a fully integrated plant built to manufacture cement using the raw materials to be extracted under the MPSAs of the Company in the province of Cebu. The plant will use approximately 2.5 Million tonnes of limestone per annum which will produce an estimated 1.5 Million tonnes to 2.0 Million tonnes of cement. Majority of the cement produced will be dispatched from the plant by sea to a network of bulk cement distribution terminals across the Visayas and Mindanao. Production in the Cebu Cement Plant is expected come on stream in 2020.
Eagle Cement currently distributes its products in the Luzon region which constitute about 65% of total cement demand in the Philippines, particularly in the following areas: National Capital Region (Metro Manila), Region I (Ilocos Norte, Ilocos Sur, La Union, Pangasinan), Region II (Batanes, Cagayan, Isabela, Nueva Vizcaya, and Quirino), Region III (Nueva Vizcaya, Nueva Ecija, Bulacan, Pampanga, Tarlac, Bataan, Zambales), and Region IVA (Cavite, Laguna and Batangas, Rizal, and Quezon) . As of 2015, NCR still serves as the center of construction and infrastructure activity in the country. Eagle Cement is considered one of the leading players in areas with the highest economic activity in the Philippines with an estimated market share of 30% in NCR, Region III, and Region IVA, based on internal Company data. As of the date of this Prospectus, the Company does not sell its products in other countries.
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Eagle offer price was adjusted from 16Php at 15Php, the price is being offered from May 11, 2017, to May 16, 2017, and will be tentatively listed on May 29, 2017. But, how reasonable is the offer price based on their financial standing? Do note that some of the factors that likely play a larger role in IPO valuation are not the numbers or financial projection but, how the company's story or its qualitative elements are being presented to the public. Sometimes, these are even more powerful than the revenue projection and financials, this article will be based only on their financial standing.
Eagle book value from 2014 to 2016 increases on average of 28.78%. The offer price if based on their 2016 book value would be 4 times higher than its book value per common outstanding share. I guess, the company believe that they are worth 4 times than their book value per share. But, will the investors share the same sentiment as Eagle? I guess we'll find out when it's finally listed.
In terms of earning, the net income from 2014 to 2016 increased on average of 13.48%. The offer price would give 18.03 price to earning ratio (P/E) basing from their 2016 net income. Meaning, investors of this company are enticed to buy 18.03Php for every 1Php earning last 2016. With a 18.03 P/E and with earning per common outstanding share (EPS) growth rate of 11.06% from 2015 to 2016, the company PEG ratio would be 1.56 which means, investors to be of this company are enticed to pay 18.03Php for every 1Php income last 2016 for an 11.06% EPS growth rate from 2015 to 2016. A fair valued stock usually has PEG ratio of 1 meaning, what you are paying for that earning (P/E) is equivalent to the growth rate (increase in EPS).
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Eagle offer price was adjusted from 16Php at 15Php, the price is being offered from May 11, 2017, to May 16, 2017, and will be tentatively listed on May 29, 2017. But, how reasonable is the offer price based on their financial standing? Do note that some of the factors that likely play a larger role in IPO valuation are not the numbers or financial projection but, how the company's story or its qualitative elements are being presented to the public. Sometimes, these are even more powerful than the revenue projection and financials, this article will be based only on their financial standing.
Eagle book value from 2014 to 2016 increases on average of 28.78%. The offer price if based on their 2016 book value would be 4 times higher than its book value per common outstanding share. I guess, the company believe that they are worth 4 times than their book value per share. But, will the investors share the same sentiment as Eagle? I guess we'll find out when it's finally listed.
In terms of earning, the net income from 2014 to 2016 increased on average of 13.48%. The offer price would give 18.03 price to earning ratio (P/E) basing from their 2016 net income. Meaning, investors of this company are enticed to buy 18.03Php for every 1Php earning last 2016. With a 18.03 P/E and with earning per common outstanding share (EPS) growth rate of 11.06% from 2015 to 2016, the company PEG ratio would be 1.56 which means, investors to be of this company are enticed to pay 18.03Php for every 1Php income last 2016 for an 11.06% EPS growth rate from 2015 to 2016. A fair valued stock usually has PEG ratio of 1 meaning, what you are paying for that earning (P/E) is equivalent to the growth rate (increase in EPS).
Click here to like the facebook page and be updated. Share if this helps you
Disclaimer: Trade or invest at your own risk.
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