E A Portuguese Lesson For Greece

Serge Pun lured the Mitsubishi group into his businesses because SPA and now Yoma market Mitsubishi Motors and Hino cars in Myanmar, along with Bridgestone Tires, New Holland tractors, and spare parts for imported Volkswagen vehicles.

With so many changes in ownership plus a new S$735 bn loan facility, the latest annual report is not really comparable to that of 2013-4. What attracted me to the stock was the real estate and tourism arms but having some other businesses probably reduces risk. YMAIF revenues in 2014-5 rose 104% to S$111 mn. This is small cap although huge for Myanmar.

Per share earnings this year came to 2 Singapore cents/sh vs 1.32 last year. Current assets rose to S$342.5 mn from 176.2 mn, offset by current liabilities of S$73.3 mn this year and 42.4 mn last year. The company did a capital increase during the FY to buy out Pun holdings noted above. Non current assets rose to S$491.6 mn from 307.1 mn, offset by non-current liabilities this year of 28.6 mn and last year of 22.9 mn. After the Puns have taken their share, shareholders own S$661.8 mn in assets, vs only 371.5 mn in 2013-4.

Net asset value per share is now Singapore cents 38.3, vs a mere 32.1 cents last year, the upslope is considerable. There are 14 bn shares out.

While most numbers are up sharply, the gross profit margin fell last year, from 44.4% to 41.1%, still very high, as projects required marketing spending. The capitalization is quite low vs a debt of S$735 bn, which sounds hairy, but the p/e ratio is only 22.36, not high for building a country more or less from scratch as Serge Pun and his family are doing. (There is a second son, Cyrus, who will probably come on board too.) Melvyn Pun was granted a modest 2 mn shares upon being elected CEO.

While the bulk of the borrowing was from the private sector, Yoma also won $100 mn in loans from the Asian Development Bank and smaller amounts from the World Bank's International Finance Corp.

Since I share a birthday with Aung San Suu Kyi, (“The Lady” the Myanmar opposition leader), I feel a special link to what I still think of as Burma. She may be able to run in the elections due to take place Nov. 15. Serge Pun bluntly supports her.What really grabs me is that an expat who has made his fortune outside Myanmar is setting out to finance the modernization of his country after decades of its being shut off from the world by a military junta. I really want Serge Pun and The Lady to win success using private enterprise rather than a plan imposed from on high. The Pun clan are experimenting with a new way to modernize and democratize a country.

This is a penny stock listed on the main Singapore stock market, the only way into Myanmar. Of course it is high risk. It trades as Z59 in Singapore.

*Veolia (VEOEY) won a large contract to upgrade the Paris waste-water system run from Clichy by a local firm. The value is euros 79.2 mn. VEOEY is one of two private waterworks firms in France, so there is real competition for these contracts.

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Disclosure: None. 

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