₦airaland Forum

Deadlytruth:
Correct. The site really belongs to BUA. On the first occasion of harassment of BUA workers, thugs came from Kogi all of a sudden and attacked with guns and matchet. The Edo State Government is not dealing with the matter decisively because it is wooing Dangote to invest in some other industries which raw materials abound in the state in addition to the recently commissioned fertilizer plant in Auchi.
Talk of Nigeria politics.
On his part, Dangote is being driven by the allure that Edo State limestone deposits are of highest quality coupled with the strategic location of Edo North in terms of centrality to most parts of the North and South.

Edo state government cannot afford to go against 'Government Boy'

BUA has decided to be involved in sectors where Dangote use to have 'government' protection and government is not allowing a level playing field. The Edo saga is just ONE example of government not allowing free and fair competition.

awesomeJ:
Well said sir.

No smart thinking investor should try being a jack of all markets. If you make an attempt at a market and things turn out different from your projections, smartness implies that you exit, and plough your resources to other areas of strength.

But I think the market is largely responsible for why the success of the cement business is more pronounced.

We assign a 23x P.E to it, while the Sugar does just 6.6x
If the cement were to do just 6.6x also, DANGCEM would only be about 7% of the index, and Alhaji's networth would be lower by more than $7bn, as a matter of fact he would lose his spot as Africa's richest.

So one factor which may have even been more pronounced than government coverage is investor's sentiments

Even in the debt market, he enjoys such likeness from lenders and investors that his finance cost are at c.MPR.

CCNN trades at 7.3PE and they likely don't get as much cheap credits too.

So there's a favourable bias from investors too.

Again,

Cost of sales are basically manpower costs and fuel costs for DANGCEM (limestone cost is just a small royalty), while for sugar the cost of imported raw sugar tightens the margin.

When DANGCEM complies fully with listing requirements THEN we will know the true value of DANGCEM.

Alhaji knew that he can ONLY survive where there is little or no competition, high barrier of entry and government protection. He has decided to focus in those areas which is good business decision. He is fully aware that on a LEVEL playing field, he will find it difficult to survive.

Everyone knows that he is government poster child and they adjust accordingly. They are aware of what befell those that try to 'compete' with him. That is BUSINESS for you.

As far as I know, there is no special 'technology' or innovation that is distinguishing him from the rest.

Kudo's to him for believing in Nigeria.

emmanuelewumi:
Dangote Industries Limited is a conglomerate that invests in various sectors of the economy. There is no conglomerate that will do well in all markets it enters. You can ask UACN, John Holt Leventis, cfao etc.

Dangote Industries Limited was smart by spinning off the divisions into separate companies, listing some of the companies and opening up ownership.

A business leader or entrepreneur needs to choose his fight and plan when to fight back.

Dangote lost in the noodles market, fruit juice market and some other markets, but what is the percentage contribution of these markets to Dangote Industries Limited bottom line?

Ok. He lost out where there is competition. He succeeded where there is monopoly or government protection with high barrier of entry.

Since you agree with that, no argument then.

emmanuelewumi:
What did Ibeto, Folawiyo, BUA, Lafarge and other cement importers/manufacturers do when Obasanjo came up with the backward integration policy in the cement industry?
How many keyed in into the policy and believed that the government will embark on a gradual policy of reducing importation of cement?

Sorrry, I do not understand your line of argument?

My position is simple

1) Dangote FAILED or could not replicate his 'midas touch' in businesses where the barrier of entry is low or where you have many competition.
2) Dangote has SUCCEEDED in areas where there is monopoly, enjoys government protection or there is high barrier of entry.

Feel free to disagree with any of the points above. Thank you.

emmanuelewumi:
The smart thing is for the competitors to combine resources and forces in other to surmount the higher barrier.



The higher the barrier the more money the disciplined investors who break the barriers will make

Well, easier said than done. You have example of Ibeto and BUA.

FACT is Alhaji thrives when he enjoys government protection or pseudo monopoly. In an all comers affair, he gets beaten blue and black. Still remembered in the midst of the forex crisis, he was getting forex at ridiculous rates to fund his businesses outside the country.

I admire his boldness and belief in Nigeria. I am however not naive. I do understand his business strategy and the limitations.

stockbuego:
I think you are right. Dangote hates market competition with passion and his perspective towards it is laced with odious disdain. He has tried and failed severally when competition is stiffed, in most cases he needs special intervention from government in order to stifle his market competitors. By the way, in Ibeto cement saga, we know what transpired. We also know his case against BUA group and so many uncountable others too numerous to elaborate.

That said, i have no doubt in my mind that his flour voyage will be a huge success as it is still constitute of about 50 percent of my portfolio which I brought at average price of 5.20k

Thanks. You are totally correct.

I believe you made a GOOD investment decision. You picked up a company undergoing turnaround. I however don't expect the growth rate to be sustained considering the competition. Same for the margin.

It is NOT a SELL recommendation BUT rather to make people to manage their expectations.

emmanuelewumi:
Elder Dempster had been importing Sugar into the country when Dangote was a kid, what stopped him from seeing the bigger picture and bigger market by moving from importation to production and manufacturing.. What stopped him from opening up ownership of the company and listing the company on the stock exchange?

I don't work for Elder Dempster so cannot comment on their strategy.

I am only saying that Dangote plays successfully in sectors where we have HIGH barrier of entry or there is a monopoly. Feel free to disagree with that.

emmanuelewumi:
Where is the Sugar refinery of Elder Dempster? Where is the Sugar cane plantation of Elder Dempster?

Flour Mills is number 2 in sugar production in Nigeria. Market rumour has it that Flour Mills of Nigeria may spin off the sugar production subsidiary of the company

So we are saying that we have ONLY two companies in the Sugar Industry and may likely become ONE at the end of the day. That is called MONOPOLY.

Like I stated before, he only plays in industry where there is high barrier of entry and with limited competition

shigidi:
But he is not a monopoly in Sugar. Seems to be thriving quite well there

How many SUGAR refining companies do we have?

Are the likes of Elder Demspter still allowed to import Sugar?

Look at the fight going on now in the Cement sector. See how BUA is giving him a run for his money?

onegentleguy:
Sorry I was a bit busy earlier.

Yes FLOURMILLS is the clear market leader ahead of DF, so it's only natural that using porters 5 forces flourmills should be in a better stead than DF. ...same way DF is in a far much better stead ahead of the other coys u mentioned.
However, this can not take away the fact that DF is favourably placed to compete with flourmills. ...at least their recent performances lays credence to that for now, and looking ahead, we all know what the man behind the name can do.
Again I agree that at some point they would need to boost/expand their capacity drive by adding to their production lines and/or product pricing to continually sustain revenue growth. ...but it would be wrong to assume that their revenue and margins would take a hit with with the recent divestment from their noodles arm if they fail to do so.
For if that was the case, then am sure that Alhaji AD would not have tore that path. ...more so, I wouldn't be seen some of the very healthy Nos I see in their result right now.
Dont forget that before the divestment, the noodles arm was already of a dwindling investment return. ...it's also imortant to note that before then, that arm was the least contributor of revenue drive (less 20% at some point).
That explains why the folks from tiger brands couldn't manage the trend as at the time. ...and so been the shrewd businessman he is, Alhaji did what needed to be done following his return.
...so it makes good sense to believe that with DF now focused on their core business strength (flour & pasta), which hitherto was the major profit driver, the company would be better placed to grow their revenue and drive profitability from a more robust earnings.
But don't take my word for it Sir. ...take the words from the good Nos we are presently seen in their result. ...take the words from the progressive performances of DANGOTE FLOUR !!

...my 2 cents.

But let's just wait and see how the future puts things in perspective though.

THANKS. We have seen many times that Alhaji struggle to compete anytime the market becomes a free for all. That's why he cashed out of the Flour Business initially.

The Noodles division is a good example. Get to ANY market and see the number of Noodles on offer! Competition is stiff. With stiff competition, your best bet is going the NBL route of acquiring your competitors to create a 'monopoly'. Unfortunately, the flour milling business is so fragmented. So a 50% growth in revenue year on year is unsustainable. To achieve ANYTHING close, you either increase price, increase capacity (or new product) or do both. Now the market is FINITE with many competitors. So there is a limit to that. With the numerous competition there is a LIMIT. So expecting him to sustain current performance is wishful thinking.

Anytime Alhaji get into a competitive landscape, he struggles! He require monopolies to thrive. That is why his favourite investment are ones in which there is HIGH barrier of entry for competitors.

There is a reason why he failed in Banking and struggling in upstream oil and gas and did nothing with Telecomms.

Watch this space.

onegentleguy:
Sir Wanajo while I agree that a PE less 10 is a better yardstick to guage the sustainability of their earnings, I believe u will also agree with me that DF is the epitome of a complete growth stock. ...and looking at the strength in their Nos, even a PE of 15 would never be any worry.
Again I just wonder if u were actually refering to Dangote Flour in the part of ur post in bold. ...I think it will be out of place and highly comical for anyone to doubt the sustainability of DFs growth rate, given were they are coming from.
...but that would be only if u would want to admit to the TRUTH BEHIND THE STRENGTH IN THEIR FIGURES.

Why is DF a growth stock? They will be competing with market leader (Flour Mills), Northern Nigerian Flour Mills and HoneyWell Flour and many smaller unquoted flour milling companies. To grow revenue, they either increase production lines or increase price. Which one are they planning to do? Having exited the noodles business what does that say about the revenue? Do you expect them to eat into the market share of the market leader? Now that Flour Mills have completed their rights issue, don't you think they are better positioned to expand?

So using PORTER'S 5 forces, what is unique about Dangote Flour??

Happy investing.

awesomeJ:
Funny for a stock with almost 800m OS.

Some of the shareholders may not even know that they own the stock. These are 'old' companies with 'old' shareholders. The company use to be called Longman. The only major book publishing company outside of Ibadan.

shigidi:
A pe of 12 won't be bad if they keep up this growth rate . Nestle is pe of 30. Nigerian Breweries as well

And you think Nestle and Nigerian Breweries are in the same category??

Even Flour Mills MUST trade at a premium to Dangote Flour.

Any company with a PE >10.00 is a NO NO except it is a TURNAROUND

That growth rate is difficult to sustain.

awesomeJ:
Everything looks good with this one though.

DY at 14.43%,

EPS at 34.5k implying a 2.8x PE,

120% growth in PBT YoY.

CP, please what do you have for fair price?

House, anyone with any concern on the stock?

Kolaish, many thanks for the hint.

This was evident since! Far better than UPL in my opinion. But not a liquid stock. To get one million units will take you till eternity. Worse if you want to sell. Good for dividend yield though..

Coolcash1:
This is why I follow Alhaji bumper to fender....My Fair price of the stock based on this impressive result is N35.

So a PE of 12 ok ooo

veecovee:
reduced my holdings in livestock very early toady, however still have reasonable quantity that I wouldn't sell till it gets to N2 despite how long it takes. I read some weeks ago that uacn will push some Nbillion to livestock from their resent concluded right offers

BUT do you know their competitors? PORTER'S 5 forces will help you here. Will Livestock going to ever be a leader OR it will continue to play catch up

phemmie06:
https://trwstockbrokers./2018/03/29/nem-company-report-2018/

3.6% dividend yield? What is current PE?

Impressed with the growth though.

TLAX:
Dangote Sugar

http://www.nse.com.ng/Financial_NewsDocs/21464_DANGOTE_SUGAR_REFINERY_PLC_CORPORATE_ACTIONS_MARCH_2018.pdf

DPS - N1.25k/share

5.7% dividend yield

emmanuelewumi:
Scammers repackage themselves every 8 to 10 years, dubious companies and managers do same. And they will never lack newer and younger sets of gullible mugus and investors.

They are mugus and highly gullible, who think they know and always argue with the experienced and rational.

Jesus learnt obedience by the things which He suffered.

NSE is still collecting application and tuition fee

Mcy56:
Okay Sir! Arms crossed.

No need to cross your arms madam. I only offer commentary on NEWS item. I dont say anything about what people decide to BUY or SELL. I sometimes try to provide another perspective on issues.

With regards to JaPaul, apologies if ANY of my posts have created the impression that I don't want ANYONE to BUY JaPaul. Please feel free to BUY as many as you want. I have NOTHING against those wanting or planning to BUY JaPaul. I don't work with Businessday so not part of any so called campaign of calumny against JaPaul!

People made money in NOSPETCO, MMM etc so no reason why you cannot make money from JaPaul.

BBFE:
Oga, being new here does not give an indication of my experience. I repeat, my game is tight when it comes to investment management. When you understand asset allocation and risk management or exposure limits, then there is nothing like the market humbling anyone.

You all have looked away from the impression I was trying to correct. And it is that the Japaul/Milost deal is not a scam and it is not illegal. Like all business transactions, there are risks or uncertainties around it.

There is what is called distressed company investing. If it suits your investment style and stage of life, you'll not be in the wrong adopting it.

Even if the investment in Japaul goes to zero, I've not breached my risk limit. Nothing is sure in this game as cases of many corporate failures abound, and these were companies that were given a clean bill by auditors and regulators.

No be everything we know. When Japaul was at 50kobo, you only need 300 million naira to get 10%. I kid you not, you can use that holding to get contracts from the company and get profit of over 300 million naira in just one financial year.

Is the above not similar to what RabbiDoracle was proposing about investing to take board positions in some companies on the NSE? You can also invest to get contracts.

So you see, what we know is different and our aims also vary.

Again, I have never asked anybody not to invest in JaPaul. It is your money and you are free to invest in any manner or form you like. You owe no one an apology! People invested in MMM and made money. People invested in 'oil company' NOSPETCO and made money. I may not have made money from such 'scams' but I did not lose money because I can spot a scam from afar!

Again $250m is N90bn. That will require JaPaul issuing a minimum of 180bn new shares of 50kobo each to Milost! How sensible is that? I don't need to be a prophet before knowing that the figures just does not add up. Even SEPLAT which is PRODUCING crude oil will not think of getting $250m equity from a single shareholder!

As an investor, if you have $250m and you decide to invest it in JaPaul, it is pure evidence that you don't know what you are doing. Only a scammer will look at the companies in Nigeria and single out JaPaul. I can name many 'oil servicing' companies and JaPaul is NOT one of them.

As to informing shareholders, well, the rule is clear. Go back and check the resolutions put before the shareholders whether it resembles what they are planning with Milost. For the type of transaction, they need an AGM/EGM or a court ordered meeting! As a shareholder (even if na 1,000 units), I am yet to receive that. That's how I know that they do not have APPROVAL of the shareholders!

That said, I have not asked or dissuaded anyone from buying JaPaul. I have ONLY commented on a news story. Never made ANY comment on BUY/SELL recommendation! So please, go ahead and invest in JaPaul. It is your right.

We can however continue to comment on stories. I am waiting for the $500m (N180Bn) suit against the journalists and Businessday! I do pray that they win the case and see how they will collect the $500m! Jokers!!!

kolaish:
This report is capable of sending C & I down to 145k

C&I Leasing is highly leverage (typical of leasing companies). That's why they've tried to raise Capital (equity).

I just dont trust the management to do the RIGHT things at the RIGHT time in the RIGHT place.

RabbiDoracle:
$250m and $100m.

See money.

$250m (N90bn) EQUITY injection implies 90bn new shares if Milost buy each share at N1.00

currentprice:
okomo hav new faiprice of N1O5

I miss this onions at N28 greediness chai!

Haba!!! PE of almost 11 Not likely.

Good result though. The turnover growth is impressive.

Mcy56:
@wanj0, pardon my ignorance o, dont you think Japaul already did that before writing to NSE?

See it here: http://www.nse.com.ng/Financial_NewsDocs/20891_JAPAUL_OIL_PLC_-_EQUITY_FINANCING_CORPORATE_ACTIONS_FEBRUARY_2018.pdf

That was a letter informing stakeholders.

The requirement is for them to call an AGM/EGM or a court ordered meeting! They need to get shareholders approval.

Majority shareholder in GSK wanted to increase its stake and likely delist the company from the NSE. The shareholders voted against it and that was the end.

JaPaul need more than 'informing' the shareholders. They require the APPROVAL of the shareholder. JaPaul is no longer a PRIVATE company.

As bad as OandO was, it at least tried to organise such 'meetings'

BBFE:
Compare apples with apples. How does MMM compare to my buying Japaul on the back of a major cash injection.

How am I scammed here.

Can this deal go bad? Yes. Does it stand the chance of succeeding? Yes. There is a reason why equities are riskier investments than gilt-edged securities.

You are free to buy JaPaul. No one has any right to stop your investment in Japaul nor MMM if you so wish.

However, shareholders of JaPaul need to approve the purported $250m injection and share issue to 'Milost' the Santa Claus investor. That is not yet done so everything na 'NOISE'.

BBFE:
Please where is the scam in this transaction. Is Jegede selling his holding to the market? Which major shareholder do you know that is selling his shares after the news? Who is being scammed here?

The trades that are being filled on the floor are between retail investors; proceeds don't go to Japaul or Milost. Average volumes in the last one month is around 15 million. For a company with an outstanding shares of 6 billion.

Do you know the investment horizon of PE Firms? You're only being biased by assuming a linear draw down amount.

Can you please quote any part of ISA that bars a company from entering an agreement without shareholders' approval? When Mecuria wanted to stake $200 million dollars in FO, did FO seek clearance from its shareholders? Did the company not make the announcement through the Exchange?

When you are in a dysfunctional clime like Nigeria, you're living in self denial if you use illegality as a point of defence.

I laugh!!!

I am a shareholder in JaPaul and the 'Milost' scam will not see the light of the day. You don't issue new shares without calling an AGM/EGM. You need shareholders approval to issue new shares, do private placement, do right issues or even raise capital! You don't need approval to BUY on the floor but you need approval for new shares.

There is NOTHING stopping anyone from doing MMM but they will be found out! Any house built on illegality will crumble. Ask OandO

Good that Milost is seeking $500m as damages.

BBFE:
Part of the unwritten rules of posting on public forums is to strive to be unbiased. How does a first and second draw down of $21 million dollars become the committed $250 million dollars.

That you don't deem some investments suitable for your style does not warrant disparaging same. Our risk appetites are different and there are those that are comfortable with investing in distressed companies.

I am not disparaging any company. I don't make stock recommendations. It is not my business which stock you decide to buy. I am however FREE to comment on news item especially when it does no make sense.

I am saying ANY agreement with Milost is ILLEGAL because it is not yet presented before the Shareholders of JaPaul. I also believe that a $250m investment in JaPaul is nothing but a SCAM. People get scammed when they ignore danger signals!

So first and second tranches will be $21m. To get to $250m that na 25 tranches. So they will 'dash' Jegede N90bn!

If they have $250m, they will NOT be looking at JaPaul!



$250m is N90b! What is the total worth

Please, kindly move the marriage/romance discussion to another thread. There are enough threads on Nairaland for such discussions. Thanks.

yom2:
my brother that Nigeria for u . blackmail every where. they can't help themselfs or the situation yet they try to pull down those who can help the situation out of petty jealously and envy. that's why they remain ever miserable. now tell those attackers now to help the situation of unity bank they can't.

Milost is another MMM in the making and the founder of MMM is not a Nigeria. So forget the self hating! They are trying to ROB Nigerians under the guise of 'investment'!

If you want to help, just follow the rules? Who pay 'penalty' for drop in share price? Thieves them!

Now they've reduced the amount to be invested in JaPaul to a 'credible' $21m. What happened to the big big money they were calling before?

dipoolowoo:
Milost Terminates $1b Deal with Unity Bank, Plans $500m Lawsuit
https://www.businesspost.ng/2018/03/26/milost-terminates-1b-deal-with-unity-bank-plans-500m-lawsuit/

Now they are making sense!

$21m for Japaul is more realistic than the bogus figures they were quoting before

$10 (m) for Resort Savings also look realistic.

Suing Business day and journalist for $500m shows that Milost people are drunk on expired Akpeteshie

yom2:
pls anybody with d right maths? mrs 1 for 5 is equivalent to 5naira if the share price is 30naira

Share is is adjusted for dividend and bonus so makes ZERO difference on your networth. Not sure why people dont factor that in.