Premco Global --- Narrow Fabric (A critical component for inner wear)

(paresh.sarjani1) #283

Some biggies coming in …top ten shareholders
Good to see …

(devarshi84) #284

I understand the shifting of business to Vietnam part. But

  1. The numbers also mean that without Vietnam operations in picture, domestic business would have almost posted a loss.

  2. What do they intend to do with domestic capacity? Are they working on getting more orders from domestic customers?

From a personal viewpoint, I would be interested to know what products Premco Global can diversify into to complement it’s current product? Also, Too much to ask from a micro cap but wish Premco Global give out more news like new customers or winning new orders etc.

Disc: Invested at higher levels and holding with conviction for now.

(HIMSHAH) #285

company made profit of approx 5.20 from domastic operation. premco31aa.pdf (134.4 KB)

(HIMSHAH) #286

also as per their annual report page 31 i have uploaded above their actual profit was around 11 cr for 17-18. but due to all new accounting they had shown it at 5.5 cr

(Shyam) #287

The management stated that it is their long term strategy to shift some of the exports / production to Vietnam, thereby resulting in full capacity utilization over there. That is probably why the Indian unit took a hit.

You can refer to the earlier post (quoted below) pointing to AR where the management intend to utilize the capacity at Indian plant. But, this needs to be watched as I remember reading that Premco has about 70% of revenue from exports. Not sure about the margins in domestic market.

(devarshi84) #288

My doubt is more about the idle capacity of domestic plant. If Vietnam plant is running at full capacity, what do they intend to do with Domestic operations? 5cr is low compared to their prev year results. Are they looking at increasing domestic clientele and sales?

(HIMSHAH) #289

OUTLOOK : Overseas customers have consistently shown confidence in quality products developed by the Company. Augmentation of additional Capacities in Vietnam, has given the strength to Indian Operations to cater to larger programs from Indian Large Business Houses like Rupa, G J Hosiery, Lux Industries and Dollar Industries.

this is in annual report

(HIMSHAH) #290

also np is approx. 11 as per OLD GAAP but due to new ind accounting std its shown as 5.5 cr,
in june 18 quarter np is already at 3.74 aaprox. check bse site

(Shyam) #291

We know Hanes is one of the customer. Is there any data in terms of customer concentration?

(HIMSHAH) #292

no they dont give enough details citing trade secrets. but hanes is their biggest client and they have set up plant in vietnam for them and also to cater other buyers their.
vietnam is fast becoming hub for its products.
if u check their AR they have approx 36 cr export wich they may shift to vietnam …

(reach.sriharsha) #293

I have very basic doubt. When I first came across Premco,I was thrilled. Took a step back and started going thorough some more details. Apart from doing FA analysis, I was thinking about the market cap of this company which is about 100 cr. Now following are my some questions in my head, hope some of members throw some answers

  1. The products which Premco makes are really really essential for inner wears(of different kind), but are these products so difficult to make from big players like Page/Hanes/fruit of loom etc? Why they need one more company to have these products?
  2. Does Premco has patents or non-copying formula which keeps it rolling?

(Chandragupta) #294

Haven’t tracked this company for a long time but if I am not wrong, the Vietnam plant was set up as a response to impending TPP. Meanwhile, Trump became U.S. President and scrapped TPP. But the company went ahead with the plant, so it is perhaps natural that it will now have excess capacity. Investors should also note that the Vietnam plant is not a 100% subsidiary, so any shift of business from India to Vietnam is a loss to domestic shareholders.

(HIMSHAH) #295

Vietnam plant is 85 % owned by premco. 15 % to other dosnt make that much diffrence.
i am tracking this company since long…

(Kanwal Sudan) #296

Anybody attending AGM - it’s on 25th Sep. Would love to get more info on Vietnam plant and general operations.

Also quick question - if I don’t already own shares of Premco, till when can I buy and attend AGM? Notification says book will remain closed between 19th and 24th Sep - does that mean I should have bought before 19th Sep to be eligible to attend AGM?

(paresh.sarjani1) #297

I can try… Not promising though

(HIMSHAH) #298

i dont think they will say no to u to attend…

(HIMSHAH) #299

u can attend as they look friendly in their approach. i regularly attend their AGM

(HIMSHAH) #300

vietnam plant currently running at 90 % capacity. company may show good result with EPS between 35 to 40 rs based on first quarter results

(Tushar) #301

Wow. Thats some news. Did you attend the AGM yesterday and was this information shared? If you attended, kindly share detailed notes at your leisure.

(HIMSHAH) #302

i had attended the AGM , but I have not made any notes. But if possible I will try to write down . I was more interested in what they explained and brief us