How are 8 listed companies bagging export trophies faring in the market?

A total of eight public companies yesterday received export trophies for their contribution to the county’s export sector in fiscal year 2016-17.

Prime Minister Sheikh Hasina handed the awards over to the representatives of 66 companies – gold trophy to 29 companies, silver trophy to 21 and bronze trophy to the rest.

Envoy Textiles Ltd, Shinepukur Ceramics Ltd, Square Pharmaceuticals Ltd and Monno Ceramic Industries Ltd won gold trophies, while BSRM Steels Ltd and Shasha Denims Ltd got silver trophies.

Maksons Spinning Mills Ltd and Paramount Textiles Ltd received bronze trophies.

How much are these companies able to translate the achievement into value for their shareholders?

Monno Ceramic Industries Ltd: A pioneering ceramic tableware manufacturer, which started operation in the mid-1980s, bagged a gold trophy for the seventh time. Earlier, it had won two silver and three bronze trophies.   

The company has been under pressure as the founder, Harunur Rashid Khan Monno, could not revive the business in his last years. He passed away in 2017.

The company won a bronze trophy for exports worth over Tk27 crore in fiscal year 2013-14. It managed to export more in the next fiscal year, but did not receive any trophy because its competitors did better.

Now, after a two-year break, it got a gold trophy.

The company now seems to have been able to turn its business around as the second generation of the entrepreneur family has taken charge after the founder’s demise.

According to the annual report of FY18, the company has seen a steady growth in sales in the last five years, reaching Tk90 crore in FY18 from Tk69 crore in FY14.

But until the last fiscal year, the company was posting frustrating profits as its earnings per share (EPS) failed to cross the Tk0.13 mark.

The company had to pay four to five times their annual profit in order to make the 5 percent cash dividend.

However, shareholders were happy to see the stock price appreciating 10 times during FY18 and some of them tried to justify the current stock price level as the EPS in FY18 jumped to Tk2.11.

But some prudent investors are yet to count on the company’s business performance as the jump in EPS was not due to operational efficiencies. Rather, it mainly stemmed from other incomes, such as sales proceeds of old machineries.

Square Pharmaceuticals Ltd

As a pioneering drug manufacturer and industry leader, the company has received gold award for the fourth consecutive year.

Square Pharma’s stock is one of the most popular in the share market. The company has been posting a steady growth in its sales, export and profit that indicates its management is efficient.

The company secured a 71 percent growth in exports in five years until FY18 when export earnings of Tk145 crore helped its total sales cross Tk3,821 crore.

It won gold award for exporting goods worth Tk138 crore in FY17.

Over the last two decades, the company has been returning more than 20 percent to the shareholders every year.

Envoy Textiles Ltd

Gold trophy for three consecutive years along with the achievement of LEED Platinum certification must have added to the company’s value.

Over a period of five years until FY18, its exports have grown to 92 percent, reaching Tk685 crore.

But its profit for the last three years has been stuck around over Tk30 crore and shareholders definitely did not like that even though they are receiving over 10 percent dividends.

Envoy’s stock price suggests shareholders’ average appreciation as the stock has been trading between 3-4 times of its face value of Tk10 each.

Shinepukur Ceramics Ltd

The Beximco Group company is a curious case for shareholders.

In fiscal year 2016-17, the ceramic tableware manufacturer received gold award for the third consecutive year. But the company with Tk147 crore in paid-up capital has been hanging between profit and loss every year.

No figure has been significant to shareholders until 2018. That year, the company posted an EPS of Tk0.42, a 700 percent jump from the previous year’s figure.

In 2017-18, the company contributed Tk89 crore to the country’s export earnings, but the frustration of its shareholders is reflected in its stock price, which is just above the face value.

The company received no dividends in the recent years.

Shasha Denims Ltd

The denim star won three gold awards consecutively until fiscal year 2013-14.

It made a moderate comeback, winning silver trophy in fiscal year 2016-17 for Tk433 crore in export earnings.

The company seems to be accelerating in the recent years as it posted a 19 percent export growth in FY18 while a five-year growth until then did not cross the 52 percent mark.

The company managed to push its net profit up 217 percent over five years until FY18.

They are paying satisfactory dividends every year, often with interim cash dividends.

Maksons Spinning Mills Ltd

A spinning mill operator with a net asset value of Tk19 per share, Maksons has managed to post annual EPS between Tk0.30 and Tk0.50 for the last four to five years.

But its stock price in Dhaka Stock Exchange is now Tk5.5 against the face value of Tk10 per share.

Shareholders do not like the company’s quarterly losses as well as the low profit margin.

BSRM Steels Ltd

The pioneering steel manufacturer was awarded silver trophy as the only steel company in the export sector mainly due to its sales that are deemed export. The company sells to Export Processing Zones (EPZs) and foreign-funded projects. It also exports directly to east Indian markets.

The company’s sales exceeded Tk4,829 crore in fiscal year 2017-18 and less than 2 percent of that came from exports.

It is a company with high EPS and dividends. Yet, shareholders look for a stable upward curve.

Paramount Textile Ltd

The bronze-winning textile company won gold award in fiscal year14 and silver award for the next two years.

Its textile business does not generate much discussion as the company invested into new diesel-run quick rental power plants with a high profit margin, leaving the shareholders happy.

With a moderate profit in textile business, the company has been paying above 10 percent dividends since it was listed in 2013.