Saturday, 25 April 2015

GCCP Resources Limited



GCCP Resources Limited ("GCCP" or the "Company") is placing out 122m shares at $0.23 each. GCCP is principally engaged in the quarrying and processing of limestone and according to the prospectus, the Company has one of the biggest GCC-grade calcium carbonate reserves in Malaysia. The IPO will close on 28 April at 12pm and starts trading on 30 April 9am. The market cap is $274.5m.

Quarries


The Company has two quarries of approximately ~26.3m tonnes of calcium carbonate reserves and according to the prospectus, the value of the quarries is in the range of between US$170m - US$580m.... with a preferred value of US$310m (seriously?)

What is Calcium Carbonate used for?


In case you are wondering, there are many uses for calcium carbonate, including my secondary school days lab experiment of blowing carbon dioxide into a calcium carbonate solution to turn it chalky. 


The consumption is expected to increase by between 3.5% to 4.1% per annum and the price outlook remained positive for the near term.

 
Financial Performance

Nothing to shout about as the Company continues to be loss-making and not operationally ready. I am not privy to 2015 forecasts.

What i like about the Company
  • Accounts is audited by a big 4, Ernst & Young.
  • Market cap is below the appraised value of the quarries.
  • Alan Wang is one of the pre-placement investors ~1.1% but his effective cost is only 11.2 cents versus public tranche of 23c! I would view it more positively if he is in at the IPO price.
My Concerns
  • Loss making company to the tune of MYR10.7m for 9M2014. Company is not operationally ready yet
  • Environmental unfriendly but essential resources play
  • Investors here are lukewarm to resources play looking at how CNMC goldmine traded
  • Not sure how true the appraised values are as i am not an expert in this
Mr IPO ratings

Since there is no public tranche and the company is not even operationally ready, i will give it a zero chilli rating. Buy only if you really like the "chalky lime water" experiment during your secondary school days or buy when the cloudy outlook of this Company turns clearer! 

5 comments:

Digital Channel said...

SSC Result 2015


SSC Result 2015 Bangladesh


SSC Result 2015

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SSC Result 2015 BD



http://resultsource.blogspot.com/2015/02/ssc-result-2015-wwweducationboardresult.html

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SGX stock trading said...

Great description over the singapore financial market, mentioning some of teh IPOs of companies listed under SGX mainboard.

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