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Indorama Ventures Pcl (SET:IVL), 63.69% stake owned by Indorama Resources Ltd., is a Thailand-based holding company, investing in various companies in 21 countries in four major regions of the world, including the Asia Pacific, Europe, North America and Africa. The company’s portfolio is comprised of necessities and High Value-Added (HVA) categories of polymers, fibers, and packaging.
According to the company's website, Indorama Resources Ltd. is 99.98% owned by Port Louis, Mauritus-based Canopus International Ltd. in which Mr. Aloke Lohia, Indorama Ventures Group CEO, and his immediate family have voting rights of up to 76% and an equity interest of up to 50%, while Mr. Sri Prakash Lohia, founder and chairman of Indorama Corporation, and his immediate family have voting rights of up to 24%, and equity interest of up to 50%.
Indorama Ventures is focused on business areas including the manufacture and sale of polyethylene terephthalate (PET), which is used for beverage containers and food packaging, the manufacture and sale of polyester fibers and yarns, which are used for textile and industrial applications, and the production and trade of purified terephthalic acid (PTA), which is a white powder used in the production of polyester products.
The company's subsidiaries include Indorama Petrochem Ltd, Indorama Holdings Ltd, TPT Petrochemicals Public Company Ltd, Indorama Polymers Pcl, Indorama Polyester Industries Pcl, Indorama Ventures Global Services Ltd, IVL Belgium N.V. and Indo Polymers Mauritius Ltd.
Indorama Ventures said on May 10, 2016 that its first-quarter 2016 revenues were 57.16 billion baht, beating the 55.26 billion baht estimate of one analyst, according to the Financial Times. IVL posted first-quarter 2016 earnings of 0.81 baht per share, exceeding the 0.08 baht per share estimate of one analyst.
Mr. Lohia, Indorama Ventures Group CEO, said in the first-quarter earnings release that Asian PTA, which has suffered from oversupply for several years, has shown positive signs of recovery with core EBITDA growth of 96% year-on-year. Nonetheless, investors may want to keep an eye on the issue as Mitsubishi Chemical Holdings recently said they plan to sell off its Chinese and Indian PTA operations, as a glut of acid continues to persist due to increasing output by Chinese manufacturers.
For 2015, the company reported a dividend of 0.48 baht per share, a 26.32% increase from 2014. The 12 analysts covering the company expect dividends of 0.61 baht per share for the upcoming fiscal year, representing a year-over-year increase of 27.29%.
From our technical viewpoint, IVL is now trading at the top of an ascending channel and bumping into the 34 baht resistance level. The stock has run up over 50% year-to-date, so a pullback might be overdue. According to the Financial Times, the consensus amongst 15 polled investment analysts covering IVL gave the company a HOLD rating, with the median 12-month price target of 31 baht a share, as of July 22, 2016.
Disclosure: No position and no recommendation. |
