shigidi:

@temmie10, ure right, there seems to be an unexplained boom nin the insurance sector because there are no fundamentals to support this.
personally, i wanted to wait till christmas before taking position in mbenefits and putting more in crusader,
do u think thats a good time to wait because im not sure this bull run is going to last

I think the enthusiasm about the entire Insurance sector is unfounded but a few companies have really solid fundamentals. After seeing the 6 month M Benefit result, my fave is now Crusader with a forward PE of 14. Crusader should release a 9-month result. Are you sure you want to wait? If it's good, the price 'll go up. If they get the money CBN is hanging on to  

@ Temmie,
Thanks alot.
Since youve seen the prospectus,do u think its a good buy?
Please i will be waiting for more details on what u can get from the prospectus(union diag)Do u think the offering price is a fair value?And when is it ending
Waiting for your response

@easimoni,
If that money is released, on average, almost every company in that sector will have extra 3 billion naira, the likes of mbenefits, cornerstone and lasaco will have about 4 billion and 6 billion. That money can change the life of any balance sheet o.
Needless to say i like crusader too, they are flying even without the extra cash yet.


@enurayce
union diagnostic looks very promising, 12 branches, more coming, eps of 17k, listing this year, i like it.
But i would advise you not to buy too much, take a limited position so that you leave room for the unexpected BUT generally i really like it. projected eps of 0.39 by 2009, it could trade around 8 naira by then, and dividend payout also looks very healthy

Awww, thank you all, for the good wishes   I'll communicate them to the lovely little girl once she's old enough to understand  

Emmaachile, thanks for posting the dangote flour prospectus. Just did a brief overview, and N15 does look expensive indeed, given a trailing consolidated EPS of 42k, which gives a P/E of 35.7 -- that's high! Not even flour Mills and DSR have P/E ratios this high (My guess is that the stock is going to be listed among the Food/beverages and Tobacco stocks). Projected EPS for the 2007 year end is 55k and then for 2008 is N1.49 -- that's a more than 100% increase. Not sure what the catalyst for this significant increase is (anyway, I haven't read through the whole prospectus yet).  I'll read thru the prospectus and give my comments later. I already did some research on the company (posted on SMN. See http://www.stockmarketnigeria.com/forums/other-stocks-investment-strategies/42-dangote-3.html#post1639) it looked good based on market considerations. The information in the prospectus however should complete the picture.

@ Temmie10:

I was thinking about Union diagnostics yesterday and wondering what would spur the growth of this company in Nigeria? Do you have any ideas? Assuming health insurance was in place in Nigeria, health services such as those offered by Union diagnostics would be affordable and the company would be able to substantially increase turnover volumes. I know that UNIC insurance currently offers health services, and from what I hear, the business is not doing particularly spectularly (if that's an english word!). So what's the catalyst for growth in Union Diagnostic's business?

_{don't take everything you read in a prospectus hook, line and sinker, especially the financial forecasts}

@ All
If ur portfolio of mainly bank stock has done btw 200 n 450% over the last 3 years,what would u do?
Easimoni n Temmie pls comment

can someone kindly help me with Dangote Flour form online? still have to send it to nigeria,by courier in time.

I will really appreaciate it,please.

can someone kindly help me with Dangote Flour form online? still have to send it to nigeria,by courier in time.

 I will really appreaciate it,please.

can someone kindly help me with Dangote Flour form online? still have to send it to nigeria,by courier in time.

 I will really appreaciate it,please.

@WindyWendy

Interestingly enough, the situation in Nigeria has played into the hands of the private sector.
Hospitals are grossly under-equipped, and health is not negotiable as you know, ppl want their families to have good health, its one of those inelastic services, ppl will always need it,
A 50m naira med equipment was installed last year (can't remember what it was) in a private clinic in otta. OBJ was there to launch it. Its the only one of its kind in naija, its just 50m naira and no govt clinic has it in the whole country, doctors and nurses go on strike in spurts. Its annoying but we're talking about profit here.

Union Diagnostic has referrals from over 1000 hospitals every month. Its very close to a monopoly in terms of the equipments they have. Their monopoly spreads a bit to West Africa. They have a partner firm overseas and with 700m out of the 1b to be spent on med equipment, the task is on the management to deliver.

Union diagnostic seems to me a growth stock with very real (not absolute) opportunities to outperform,
. About 1/3 of the company is still being held by the same doctor who started it a few years ago and the money is for expansion as opposed to going to the pockets of the owner a la dangote

I think its worth the try,

@abocana

emmaachille posted the application form here:
https://www.nairaland.com/nigeria/topic-75581.0.html

Temmie10:

@WindyWendy

Interestingly enough, the situation in Nigeria has played into the hands of the private sector.
Hospitals are grossly under-equipped, and health is not negotiable as you know, people want their families to have good health, its one of those inelastic services, people will always need it,
A 50m naira med equipment was installed last year (can't remember what it was) in a private clinic in otta. OBJ was there to launch it. Its the only one of its kind in naija, its just 50m naira and no govt clinic has it in the whole country, doctors and nurses go on strike in spurts. Its annoying but we're talking about profit here.

Union Diagnostic has referrals from over 1000 hospitals every month. Its very close to a monopoly in terms of the equipments they have. Their monopoly spreads a bit to West Africa. They have a partner firm overseas and with 700m out of the 1b to be spent on med equipment, the task is on the management to deliver.

Union diagnostic seems to me a growth stock with very real (not absolute) opportunities to outperform,
. About 1/3 of the company is still being held by the same doctor who started it a few years ago and the money is for expansion as opposed to going to the pockets of the owner a la dangote

I think its worth the try,

Thanks Temmie10. It's so sad that the information on Union Diagnostics is very scanty. Isn't the prospectus available electronically.

I have some further questions on this, Temmie10, so please oblige me. What exactly does Union Diagnostics do? Is it a medical lab? Also, who's the major competitor in Nigeria? I like the idea that 70% of the PP proceeds would be spent on ramping up the business! Can you please provide the name of the overseas partner -- perhaps I can start my research from there. If only the prospectus was available electronically . . . _aarrghh

windywendy:

Thanks Temmie10. It's so sad that the information on Union Diagnostics is very scanty. Isn't the prospectus available electronically.

I have some further questions on this, Temmie10, so please oblige me. What exactly does Union Diagnostics do? Is it a medical lab? Also, who's the major competitor in Nigeria? I like the idea that 70% of the PP proceeds would be spent on ramping up the business! Can you please provide the name of the overseas partner -- perhaps I can start my research from there. If only the prospectus was available electronically . . . _aarrghh

This should give you some answers: http://cashcraft.com/uniondiagnosticpropectus.pdf

windywendy:

Thanks Temmie10. It's so sad that the information on Union Diagnostics is very scanty. Isn't the prospectus available electronically.

I have some further questions on this, Temmie10, so please oblige me. What exactly does Union Diagnostics do? Is it a medical lab? Also, who's the major competitor in Nigeria? I like the idea that 70% of the PP proceeds would be spent on ramping up the business! Can you please provide the name of the overseas partner -- perhaps I can start my research from there. If only the prospectus was available electronically . . . _aarrghh

I was particularly disapponted that there were errors in the financials.
The figures marked ** did not jive. I had to adjust them. The original figure for year 2004 net operating expenses is 25078. Also the retained earnings b/f in 2002 was 760.
I am quite disappointed that with the number of professionals involved in the process we get this kind of unpardonable errors.
However I beleive in the potential of the company.
About two years ago we had to do a CT scan on my grand mum and we were referred there from a big hospital in Festac. There is virtually a lack of organised competition to them. The only labs that can offer similar services would be those that attend to the powers that be. Most hospitals do not stock the kind of equipment they have. The business is definitely a growth stock.
I just hope that in future they will employ only professionals that pay attention to detail.
I am buying the stock though.

As a medical person, I can tell you that Union Diagnostics will get a lot of business in Nigeria.

The laboratory and radiological services offered by this company are mostly unavailable in Nigerian tertiary healthcare institutions (teaching and general hospitals).

Once they get the funds to get more of these facilities and spread them around the country (through the private placement), some of the radiological and laboratory investigations as well as radiologically-guided interventional procedures which can only be done outside Nigeria will be handled by Union Diagnostics.

I give an example. The nearest place one can get a polymerase chain reaction profiling (popularly called DNA tests) which are used in solving paternity and forensic cases, is in South Africa. The average cost of a DNA test is between $1000 and $1500.

When equipment to handle such sophisticated procedures are brought in by Union Diagnostics, they will be able to maintain a powerful monopoly in the Healthcare subsector the way Aliko Dangote has done in the Building Materials subsector.

Hospitals which have to rely on outdated methods of laboratory and radiological diagnosis because of unavailable access to newer methods will be able to offer patients better healthcare because of improved access to these newer methods.

Other nearby African countries like Ghana, Cameroun, Benin Republic, Niger Republic, etc who do not have access to such facilities can also provide a ready market for Union Diagnostics, as I am aware that the company has plans to reach out beyond Nigeria.

If companies in the Healthcare sector like EKOCORP that cannot match such credentials can sell above N5, I do not see why Union Diagnostics cannot.

The possibilities and outlook for this company are too bright to be ignored. I am buying BIG TIME!

On another topic, a week ago, Temmie10 proposed that Standard Alliance was a stock to buy. Since then, the stock has been in great demand, so much so that it was on net bid today.

Na wah o Temmie, I din't know you could move the market with just a comment!

Temmie10:

This should give you some answers: http://cashcraft.com/uniondiagnosticpropectus.pdf

Thanks Temmie10! It seems the government is indeed doing something about health insurance afterall. This should be good news for businesses like union diagnostics, as it would make their services more affordable and result in increased business volumes. After reading through the prospectus, this seems like a good long term investment to me.

@easimoni
nor be me o, , i been jus talk my own o

After price falls of between 50-70% for many insurance stocks, looks like speculators are driving the prices once again. Several stocks are on maximum bid.

Enolase,
I was just teasing Temmie about controlling the market, but the rally in the insurance sector is interesting. My M Benefits is back in the black (after buying and selling fees) after just 2 weeks of ownership. Sweet!

Na wa for the insurance sector.

I thought Sepptember /October is generally a bearish period in the market but it seems this is not the case this year. And I expected investors to offload from the secondary market to try out the Public offers .

Come on guys stop speculating and let us also get on the bandwagon.

I must say, I'm very impressed with the level of information generated by the contributors to this forum. I just signed up today and have not been able to stay away since. Kudos to all primary contributors and thanks for the advise postings. Just reading this postings have probably saved me thousands of $ in potential loses.

Thank you all.

Richy

@leqez, you are welcome

Easimoni, The insurance companies are still nowhere near where they where back in May, so as you said, the development is very interesting.

@temmie 10
I have seen the uniondiagonistic form but it looks as if the offer is closed for now or has it being exended ?If yes till when and how do i process the form,i have asked my brokers to help proceess it but they decline.I am thinking of scanning the form.

@Enolase,
Can you please help give answer to my question.

Temmie10, Frankiriri and the rest of the gang that seem to like the Union diagnostics PP:

I have used Frank's spreadsheet to do some reasonableness analysis on the forecast P&L figures for this company -- see attached spreadsheet and take a look at rows number 6 to 9. The 2007 figures look over-optimistic and somewhat out of whack. What is your opinion as regards the forecast sales growth and profit growth and the profit margins? What could have happened in the year 2007 that could have led to such growth? Do you guys think (or know if) the figures are reasonable -- at least we're in the last quarter of 2007 now, so there should be some knowledge on what the actual figures to august 31 are, and then what projections for the remaining 4months could be.

Also, seeing that the company hasn't paid any dividends in the last five years, and that they plan to use the offer proceeds to fund working capital and business expansion, I'm wondering where they're going to get the N200m cash to pay dividends in 2007 and the other funds for proposed dividends in 2008 and 2009. It's a pity we don't have either the cashflow statement or the asset side of the balance sheet to give us an idea of how liquid this company is (I wonder why such crucial info would be omitted from a prospectus though). Any takers on this view point? Please share if you have further info 

Chokit,

Offer extended till mid-September. Give another two weeks for collation, and you have till September ending. Listing scheduled for October.

Where can I get the union diagnostic form please?

windywendy:

Temmie10, Frankiriri and the rest of the gang that seem to like the Union diagnostics PP:

I have used Frank's spreadsheet to do some reasonableness analysis on the forecast P&L figures for this company -- see attached spreadsheet and take a look at rows number 6 to 9. The 2007 figures look over-optimistic and somewhat out of whack. What is your opinion as regards the forecast sales growth and profit growth and the profit margins? What could have happened in the year 2007 that could have led to such growth? Do you guys think (or know if) the figures are reasonable -- at least we're in the last quarter of 2007 now, so there should be some knowledge on what the actual figures to august 31 are, and then what projections for the remaining 4months could be.

Also, seeing that the company hasn't paid any dividends in the last five years, and that they plan to use the offer proceeds to fund working capital and business expansion, I'm wondering where they're going to get the N200m cash to pay dividends in 2007 and the other funds for proposed dividends in 2008 and 2009. It's a pity we don't have either the cashflow statement or the asset side of the balance sheet to give us an idea of how liquid this company is (I wonder why such crucial info would be omitted from a prospectus though). Any takers on this view point? Please share if you have further info

I took notice of that myself. 1 thing stands out though, Every company that raises money will obviously generate more money in that year, insurance companies' profits jumped literally 6 months after capitalisation. It is also possible that the company is working towards end of year in March 08 like a lot of companies do. In any case, it is highly unlikely that they will not meet 2007 forecast, they are listing on the NSE shortly and a misfiring or not meeting targets this early would be disastrous for them.

On Dividends, the company did a bonus issue of 2 for 1, for those that bought the pp 2 years ago, If expansion has been the motive in the past 2 years, the bonus might make sense. To get the other details like balance sheet and cashflow, you'd have to go to cashcraft. I myself have enquired if those who buy this pp will be eligible for 2007 dividends and i'll have an answer tomoro

You should comment more regularly windywendy,

@ess
the form is on cashcraft website, www.cashcraft.com

Thanks Temmie10!

Based on the DPS calculation, it seems those who buy the PP will be eligible for the 2007 dividend, because the calculation of 15.2k is based on the 1.3bill shares that'll be in issue after the 550m additional shares are added to the existing 770m. Dividends of N200m divided by 1.32bill will give the 15.2k dps calculation.

One more thing before I call it a day:

I have tinkered a bit with Frank's spreadsheet and included some revised projections, based on the following:

1. The company's 2007 sales increases by the average historical sales growth of about 30% (I'm not banking on the fact that the PP funds will have any effect in the 2007 financial year, since the PP is being concluded close to year-end)
2. The company's 2008 sales increases by 40% (purely arbitrary number, but perhaps reasonable considering that the PP funds will be used for the expansion stated and some impact will be felt then) and 2009 sales increases by 50% (again, arbitrary, but I expect more impact on sales growth from the PP funds used for business expansion. Also, I believe the expansion will take about 2years to be fully reflected in the company's topline.)
3. The company maintains the historical average PAT margins of about 15% (which I think is conservative but perhaps reasonable, considering that this is what many companies earn as net profit margins).

On the basis of the above assumptions, it seems like this is a good long-term investment -- P/E ratio in 2009 will be somewhere in the 27 range, which seems quite reasonable for a company that has very good growth prospects.

See attached spreadsheet and feel free to change the assumptions and post your comments.

I'll be looking forward to reading your comments tomorrow 

Hello everyone,
I am new to the forum but I have become fascinated to the point of becoming almost addicted.
Keep up the good work and thanks for all the useful info. I wish I had heeded my fathers advice and gotten in the market 15 years ago.
But God bless him because he left his children a nice portfolio, hence my post. I need advice on my shares in the
following cos.
1) Nigerian Bottling Co. ( I am guess I should hold on to this)
2) Afribank (same I guess)
3) Union Bank ( same)
4) Nigerian Breweries (same)
5) Wapco (same)
6) Flour Mills of Ng ( sell or hold)
7) UAC of Ng( little movement sell or hold?)
UAC Property Dev. PLC( no movement at all sell or hold).
I Am seeking advice as to selling and buying some different stocks.
Thanks Y'all

Gurus welldone o!
@ questions,
1) After looking at the prospectus for Dangote Flour what's the expert consensus on it? Dive in with both eyes closed or invest cautiously. What is the prediction for short term and long term, especially with Flour Mills of Nigeria doing so well and looking to even do better in future? Or should one just buy both? .
2) Does anyone know how one can access this Union Diagnostic private placement from outside Nigeria? Any help
Thanks all

PS. Did someone say something about a possible Zenith PO coming out soon? How credible is that?