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4th June 2011 - Extremely attractive energy costs of 9 sen/kWh - http://biz.thestar.com.my/news/story.asp...ss/8834605

2nd Feb 2012 - US$500m energy deal with OM Sarawak for 20 years -
http://thestar.com.my/news/story.asp?fil...sec=nation

3rd Feb 2012 - OM Sarawak to invite bidders for smelter works
http://biz.thestar.com.my/news/story.asp...s/10666856

More importantly, could Boustead get a direct spinoff in the development of the smelter (via project management and starting up) or potentially a direct stake in the low costs smelting plant?
yeah this is now worth watching. Mr Wong is reaching of age and yearning to do the biggest deal of his life time. Ex-malaysia may help? Sarawak is Tiab Mammod land. Not sure if he has the connection to pull it off.

Who is going to operate also need to be careful. Sarawak has many mega deal flops and while its majority population could care less if it will benefit Sarawak or not? The people who are in the known probably are the same GREEDY bunch.

I think the benefit will go to Malaysia Co. even if Boustead invest direct stake. Wong knows better when to do a deal or not. He has been in trouble before - Australia, Myanmar to name a few... litigation aplenty in all kind of business and its best to just walk away then to have the constant headache to deal with it!!
PBT FY3/2011 - S$23.8m
PBT 9M 2012 - S$18.8m (+19%YOY)

http://www.boustead.sg/products_services...nology.asp

Our companies, Esri Australia and Esri South Asia, are the premier providers of the world’s leading geographic information systems (GIS) and location intelligence solutions in the exclusive markets of Australia, Singapore, Malaysia, Indonesia, Brunei, Bangladesh and Timor-Leste.

ESRI Australia is by far the major contributor to the division's earnings and cash flow.

One only need to look at the following link to understand the growth potential of the cash generator within Boustead's engineering outfits:

http://esriaustralia.com.au/news

Read it and see the potential for yourself.
Geo-Spatial has always been Boustead's cash cow, and the steady margins, revenue and profit growth are often overlooked by analysts as they struggle to dissect the company using "sum of the parts" methodology.

I've often remarked that the real value of Boustead's myriad businesses is embedded in its ESRI, as they have a strong market position and the business is cash-flow positive because they sell services to Governments (who have the ability to pay).

As for mistakes, I haven't met a CEO who always makes the right business decisions. Perhaps some of them are shy and will not admit their mistakes so readily at an AGM, but FF Wong is certainly candid about them. He readily agrees he made mistakes in Salcon (restructuring took longer than expected); and also Libya (on hindsight). He's not one to hide from mistakes; and I believe he wants to learn from them so that he does not repeat them.
(10-03-2012, 01:04 AM)Musicwhiz Wrote: [ -> ]Geo-Spatial has always been Boustead's cash cow, and the steady margins, revenue and profit growth are often overlooked by analysts as they struggle to dissect the company using "sum of the parts" methodology.

I've often remarked that the real value of Boustead's myriad businesses is embedded in its ESRI, as they have a strong market position and the business is cash-flow positive because they sell services to Governments (who have the ability to pay).

As for mistakes, I haven't met a CEO who always makes the right business decisions. Perhaps some of them are shy and will not admit their mistakes so readily at an AGM, but FF Wong is certainly candid about them. He readily agrees he made mistakes in Salcon (restructuring took longer than expected); and also Libya (on hindsight). He's not one to hide from mistakes; and I believe he wants to learn from them so that he does not repeat them.

I agree with you on your observations of CEOs in general. FF Wong's transparency over his mistakes is a double edged sword:

Positives - we know that noone is perfect and any individuals or companies can only become stronger and wiser when a valuable lesson is earned.

Negatives - there is tendencies for investors to remember bad experience and continue to cast doubts over new ventures undertaken and hence their willingness to accord higher ratings for calculated risks takings.

In Boustead's case, its track record can be testified from the steadily growing cash pile not withstanding the publicly reported setbacks like Salcon and Libyan.

While it is easy to say no pain no gains, how many investors or companies can walk such talk to keep evolving and growing - investors can decide on what they can evaluate - TRACK RECORD.
ESRI crown jewel? i got delayed from going home trying to resolve an ESRI product issue haha. To be honest it is pretty crumblesome and looks outdated on my version.

I wanted to comment on the debacle between greengiraffe and Qiaofeng for quite some time but have been busy. I think both made sense in their arguements but were slightly extreme. Nonetheless it is a good exercise to discuss the risks involved in heavy industries. And I really wish Qiaofeng to come back and discuss in this thread. Note that I am not vested in Boustead.

Let me start first on what I think about FF Wong decision on this project. First of all, I have full respect of him for investing in OM Holdings at current economic environment. If one think about it, FF Wong identified a cheap deal when the cost of borrowing is relatively stable with a rare exception of this industry suffering with low manganese prices. Usually when we see M&As carried out during the good times, we will see companies paying huge and unjustified sums of money between 8-12x or even more of peak market EBITDA to realise that they suffer in the end. But now, I am sure FF Wong have paid a really great price to own a stake in a potential growth cyclical industry. Using Yongnam as example (vested), if you look at their 5 year earnings generation, you will realize that the turning point came about in 2007 when Yongnam successfully bidded the MBS project and followed up with various Specialist engineering MRT projects which allowed them to grow their EPS significantly so far. Prior to 2007, construction prices or industry are suffering like hell in Singapore but Yongnam is really one of the bright stars as there are one of the market leaders (with only 3 major competitors at Singapore) and large fabrication yard or space to allow them to do what they want. Yongnam also always went bankrupt but was fortunately saved by some of the local banks. I believe the same story will happen for OM holdings as well as the industry consolidate and the demand of steel manufacture go up in the future.

Typically, based on my experience, such heavy industrial greenfield projects tend to have a ROCE of above 25% or payback of 5 years to justify for the project to go ahead. But it all depends on the prices estimates they used or the synergies in cost to justify the project. But nonetheless there is no such thing as a riskless project and this is highlighted by Qiaofeng on the environmental risks that it carry.

Every heavy industry will bound to face environmental risk one day. Some mines need to filled or restored after reserves are exhausted. Sometimes, like what Qiaofeng have warned, that there may be a possiblity of complaint from the people. However, it depends on whether you like to see the glass is half filled or half empty. The project also inevitably brings employment to the people, the surrounding areas will start to flourish with schools, food stalls, apartments etc. People have a more stable life. Some people benefit also from the initiation of the project where farmers or landowners sell their land at ridiculous prices to the project. Usually things turn ugly beyond the payback period when the local management falls out with certain people or political parties which results in discussions like the one is Kuantan. Therefore, in my view, the short to middle term should not be much impact to investors unless the local management really screw up and not pacify their current "supporters" or performs substantial CSR well enough.

One must remember, no risk no return. If you dislike such risk, then this deal is not suitable for you. This is just my 2 cents from my exposure with heavy industries. Smile
Drizzit, mind elaborating more (in a vague way if it is not possible to be too specific?) It is always good to hear about how the end users feel about a company's product.
hi psolhawk the product is market leading just not the implementation on users end. on my version the interface feels very outdated haha. just ignore my ranting. its got no bearing in general over the product.
Noted OMH's view on manganese price trend historically and going forward