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EQUITY RESEARCH ON

M.I. CEMENT FACTORY LIMITED

DECEMBER 31, 2015


DEPARTMENT OF FINANCE
University of Dhaka
Equity Research
On
M.I. Cement Factory Limited
Course Code: F-307
Course Title: Analysis of Financial Investment

Submitted To:
Md. Saimum Hossain
Lecturer
Department of Finance
Faculty of Business Studies
University of Dhaka

Submitted by:
Group Number:13
Section: B
BBA 19th Batch
Department of Finance
Faculty of Business Studies,
University of Dhaka

Submission Date: December 31, 2015

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Group Profile

SL No. Name ID No. Remarks


1 Samiun Nahar Nitu 19-174
2 Pritom Roy Shovo 19-176
3 Md. Enamul Hasan 19-178
4 Farhan Haseen Raad 19-180
5 Md. Shamim Azad 19-184
6 Md. Al Amin 19-188
7 Sakib Alam 19-192

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M.I Cement Factory Limited Recommendation: Sale
DSE & CSE: MICEMENT Target price: 63.2

Company overview Company Fundamentals

M.I. Cement Factory Limited is involved in


Market Cap(BDT mn) 12681.9
manufacturing and marketing of Ordinary Portland
Cement and Portland Composite Cement under the
No. of shares 148,500,000
brand name “Crown Cement”. The Company, one of outstanding
the largest cement exporters in Bangladesh, mainly Free float shares 32.09%
exports its product to northeastern states of India.
About 7.5% and 5.48% of total revenue generated Paid up capital(BDT 1485
from export in FY 2013-14 and 2014-2015 mn)
respectively. It also won National Export Trophy Current Price(BDT) 85.4
(Gold) for two consecutive year (2008-09 and 2009- (31/12/2015)
10) and received trophy from Ministry of Commerce 52-week price 61.1-99.9
and Export Promotion Bureau. range(BDT)
The company became listed with both DSE and CSE
Sector’s Forward P/E 34.6
in 2011. Currently, 67.08% shares of the company
are held by its sponsors/ directors, and rest 32.92%
of the shares are held by institutional investors.
Margins
We initiate coverage of M.I Cement with a sell
2016- 2017-
recommendation and a 12-month target price of
YEAR 2014-15 2015-16E 17E 18E
54.2 BDT. Our recommendation is based on a P/E
gross
of 12.46x an estimated 2015-2016 EPS of BDT 4.2 margin 17.11% 18.37% 19.56% 20.67%
and on a 2.17x estimated 2015-2016 book value of Net profit
Tk. 40.97. With an estimated dividend yield of margin 7.85% 7.30% 6.78% 6.30%

3.24% in 2015-2016. operating


margin 11.91% 12.09% 12.25% 12.41%

Per Share 2015-16E 2016-17E 2017-18E

EPS 4.2 4.0 3.9

Dividend 2.8 2.7 2.6

BV/Share 41.0 42.3 43.7

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Price Movement
Exhibit: 1
Price Graph

Price Graph
120

100

80

60

40

20

0
7/2/2013
8/2/2013
9/2/2013
10/2/2013
11/2/2013
12/2/2013
1/2/2014
2/2/2014
3/2/2014
4/2/2014
5/2/2014
6/2/2014
7/2/2014
8/2/2014
9/2/2014
10/2/2014
11/2/2014
12/2/2014
1/2/2015
2/2/2015

5/2/2015
6/2/2015
3/2/2015
4/2/2015
Valuation 2015-16E 2016-17E 2017-18E

P/E 19.5 20.2 21.1

P/BV 2.0 1.9 1.9

Key Revenue Drivers and Cost Drivers


The company is a manufacturer and marketer of Ordinary Portland Cement (OPC) and
Portland Composite Cement (PCC) with the brand name of ‘Crown Cement” is the key driver
of revenue. Besides exporting cement to the foreign countries also contributes to the revenue.
The raw material cost is the main cost driver of the company. Raw materials includes-
Clinker, Gypsum, Slag, Fly ash, Lime stone, Cement grinding, Bags e.t.c. among them
Clinker is the main cost driver, it covers 87.53% of total Raw Material consumed. And
76.27% of total cost of sales.

Industry overview
Cement industry of Bangladesh is running with excess capacity. Most plants operate at 50 to
60 percent efficiency. Against 20 to 21 million MT annual local demand, there exists around
33 million MT production facility as of 2014. Currently, cement consumption per capita in the
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country is roughly 105 KG, which is 217 KG in India, 265 KG in Pakistan, 310 KG in Sri
Lanka and 570 KG in Korea. According to Bangladesh Cement Manufacturers Association
there are more than 125 cement factories in the country.
The industry is oligopoly in nature where top 10 players held almost 85% of market share and
Pricing control. The leading position seized by Shah Cement followed by Lafarge and
Heidelberg Cement according to Bangladesh Cement Manufacturers Association (BCMA).
Bangladesh has no source of cement clinker which makes it one of the largest importers of
clinker and limestone in the world by importing an estimated 10 million to 15 million MT from
India, Thailand, Indonesia, the Philippines and China annually. So profitability of the sector
largely depends on uninterrupted import facility and favorable foreign exchange condition.
Over capacity of production in this sector uncovered the export opportunity in 2003.
Bangladesh exports 40,000 to 50,000 MT of cement a month to the seven-sister market in India.
Indian manufactures are now offering cement at lower rates than Bangladeshi companies due
to tax benefits. Currently, Bangladeshi cement makers cannot compete with Indian
manufacturers as there is a price gap of BDT 50- to BDT 70 a bag between Indian cement and
Bangladeshi cement. However, experts expect the cement industry to grow by an annual
average of 20%-25% over the next five year.

Industry Analysis
Porter’s Five Forces Framework for analyzing the Cement Industry of Bangladesh:

Threat of new Entry: Entering the industry is expensive given the capital cost, limited raw
material sources & tough govt. clearance. Wide distribution and marketing channels are
important strategic assets that are difficult to replicate by new companies. Overall, high
barriers to entry.

Competitive Rivalry: In cement industry in Bangladesh, there are 8 to 10 big companies and
they are holding the most of the market share. Moderate competitive rivalry exists in this
sector.

Supplier Power: Most of the raw materials of Cement are imported so there lies a strong
bargaining power of suppliers. Cement manufacturers have pulled up the price due to
increased price of raw materials & transportation system. That means suppliers are powerful
enough to force new prices on the industry. Overall, High suppliers power,

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Exhibit:2
Market Share

Market Share

17.00% 19%

10%
13%
6%
7% 12%
7%
9%

shah cement lafarge heidelberg king brand fresh crown premier holcim other

Source: BCMA

Buyer Bargaining power: The major customer of the cement industry is housing &
construction sector. Retail buyers do not have much leverage in dictating the price. Local
market is dominated by small number of cement companies. Demand is inelastic- exists at all
price points. In short, less buyer power.

Threat of substitution: As there is no close substitute for cement, threat of substitute is less
in this industry. Cement is indispensable component for any sort of construction. As no other
close substitute product is available in market cement industry doesn’t face any threat of
substitution.

Key risks to investment thesis


Risk factors & management’s perception about the risks
Investors should be aware that there are risks associated with a particular investment in the
company. These risks may result in loss of income or capital investment. Investors should
carefully consider all the risks and uncertainties associated to the company along with all the
information provided in this prospectus before taking decision to invest in shares of M.I.
Cement Factory Limited.
1. Sourcing of raw materials
Main raw material of cement is the clinker which is imported from different sources. The
company’s business is dependent upon its ability to source sufficient clinker at competitive
price for its operations.

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Management perception
The company has bilateral arrangement with a group of independent suppliers of raw materials.
Therefore, it is expected that the company will have smooth flow of raw materials. Besides,
clinker can also be procured from local sources .
2. Distribution network
Many strong producers of cement including multinationals are competing in the domestic
market but the Company depends on its own distribution network for the sale of its products.
Management Perception
The company’s products are currently marketed through a distribution network comprising of
around 61 (sixty) distributors/dealers/commission agents and 56 (fifty six) market organizers
who in turn sell the products to end users such as contractors, retailers, and other similar groups.
The company also markets its products directly to institutions and corporate bodies. Since the
distributors/dealers/commission agents have day-to-day contact with customers, the company
is exposed to the risk of its distributors/dealers/commission agents failing to adhere to the
standards set for them in respect of sales and after-sales service, which in turn could affect
customer perception of the company’s brands and products. If the competitors of the company
provide better commercial terms to the dealers, they may be persuaded to promote the products
of the competitors instead of the company.
3. Rise in Input Costs may affect profitability
The input costs of the products of the company may increase due to various reasons, such as
increased cost of raw materials and other variable costs that adversely affect the input costs. In
such case, if the company is not able to pass on such increase to the consumers because of
competition or otherwise, it may affect the profitability of the Company.
Management Perception
The company constantly endeavors to procure raw materials and packing materials at the
lowest prices using its long-term association with the suppliers and constant development of
new sources of the same. The Company also follows prudent pricing policy to keep the costs
under check. The risk on account of price fluctuation in raw material is reduced to a significant
extent by passing incremental raw material cost to the prices of finished products thereby
insulating the Company from fluctuations in raw material prices. Profitability will depend upon
the extent up to which the company is able to pass on the burden of rise in the price of raw
material to the consumers.
4. Future results of the Company may be adversely affected if the Company fails
to implement the proposed expansion:
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The company has undertaken very optimistic expansion plan and expected to complete within
one year. In case of failure to implement as per schedule the company will suffer significantly
in terms of profitability, cost overrun as well as market share.
Management Perception
The sponsors have in-depth knowledge & skills in setting up & implementation of similar
projects. Besides, the company has a group of skilled and experienced personnel to ensure
timely implementation of the project.
5. Cement market is highly competitive
Some of the competitors of the Company are larger than the Company and have vast financial
resources that may enable them to deliver products on more attractive terms or to invest large
amounts of capital into their business, including greater expenditure for better and more
efficient production capabilities. These competitors may limit the opportunity of the Company
to expand its’ market share and may compete with it on pricing of products. The business,
financial condition and prospects of the Company could be adversely affected if it is unable to
compete with its competitors and sell cement at competitive prices.
Management Perception
With increased thrust and emphasis given by the Government and private sector to construction
activities and infrastructure development, the demand for cement is going to be fast increasing.
The Company therefore foresees growing demand for its products. With the proposed
expansion and strengthening financial condition due to the public issue the company will be in
a very strong position to be competitive in the market.
6. Non-availability of power could disrupt the operations for the proposed project.
Power is essential for operating the plant which comes either from PDB or from captive source
operated by Gas. Interruption of supply of power/gas will reduce the production which will
ultimately increase the cost of production and make the company uncompetitive.
Management Perception
The existing unit is connected to H. T. (11 KV & 33 KV) power line with connected load of
7.00 MW. The proposed unit will require another 8.00 MW load connection from 132/33 m
KV and 33 KV H. T. line. The sponsors of the project have already applied to the authority for
permission of additional load connection which is expected to be accorded very soon. Besides,
the company has 3.61 M.W. power from a gas based captive power plant for one unit (1400
MT) to meet its requirement during any power supply interruption and also for constant use.
7. Delay/failure of the public issue may adversely affect the implementation

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Proposed expansion would be funded from this Public Issue and any delay/failure of the public
issue may adversely affect the implementation.
Management Perception
The Company requires significant fund to finance its proposed expansion. It has already
secured necessary fund from banks under a syndication and accordingly agreement has been
signed with supplier (CHMC) and L/C for major machineries to be opened very soon. In case
the issue is delayed//not raised, the bank loan/debt will continue.
8. Sustained growth depends on its ability to attract & retain skilled Personnel
Company’s sustained growth depends on its ability to attract & retain skilled Personnel and
failure would adversely affect the growth prospects.
Management Perception
The Company has devised a sound human resource policy to develop and retain its key
management personnel & talents and has been able to retain significant part of its manpower
talent. Operational efficiency of the company would be ensured through sponsors’ direct
involvement & their experience in cement sector, ready succession and experienced
management team.
9. Foreign Exchange rate risk
The project may face some degree of foreign exchange rate fluctuation risk as the Company
imports raw materials against payment of foreign currency.
Management Perception
Exchange rate of used currency is almost stable for the last couple of years. Main raw materials
for the project are clinker, gypsum, slag fly ash and lime stone. All the raw materials will be
imported. Market price is usually adjusted based on the cost of raw materials.
10. Market and technology-related risks
In the global market of 21st century, developed technology, products and services render
obsolete the old service and product strategy. So, the existing organization may not be able to
cope up with the future needs and demands.
Management Perception
The management of MICIL is very much aware of this issue and they are already well equipped
with a pool of technical personnel to maintain the installed production facilities.

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Investment Positives

 The company is setting up 5th unit with an additional capacity of 4200 MT per day. They are
adding another Ocean going Mother Vessel. The company is setting up another Packing Unit
and 1,500 MT capacity OPC Silo to enhance the delivery capacity. The commercial operation
of the plant is likely to come into operation within the year 2016. Installation of the new silo
will enable the company to enhance its presence in the competitive cement market.
 According to the news disseminated in the DSE website in March 2015, the board has decided
to establish a fully owned subsidiary Company in India with an initial Paid-up Capital of IRS.
5.0 million (BDT 6.04 million).
 M.I. Cement is the pioneer in the cement export from Bangladesh. The company captured 45%
of the cement export from Bangladesh and earned BDT 509.5 million foreign exchange during
the year 2013-14.
 The backward and forward integration process through associate companies smoothen the
operations and enhance efficiency, which eventually turn into higher expected earnings.

Investment Negatives

 Adverse foreign exchange move may hamper profitability since almost all raw materials are
imported. Besides, the company also earns good percentage of revenue from export sales.
 Both local and foreign demand had fallen due to slower economic growth. Currently,
aggregate capacity for the cement manufactures is much higher than the local demand for
cement. High competitiveness in the industry might force the price of cement to decline if
implementation of the government infrastructural development project becomes slower.
 Power supply is a major concern for the cement industries now a days.

Valuation Summary

Key assumptions:
Relative valuation-P/E ratio and P/BV ratio: Our P/E valuation based on FY 2015-16 EPS
suggests that M.I Cement stock is worth Tk.81.9 per share, and P/BV valuation based on FY
2015-16 BVPS suggest that M.I Cement stock is worth Tk. 81.9. This two prices are similar.
And from this we can say that M.I Cement stock is overvalued as the current market price is
85.4.

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Weighted average cost of capital:
Cost of equity: We utilized the Capital Asset Pricing Model (CAPM) to calculate the cost of
equity for M.I Cement. In order to reflect our long-term investment horizon, we utilized the
yield on a 10-year treasury bond as our risk-free rate, which was 7.40%. We used 14.0% for
our market risk-premium, which is the historical average risk premium based on geometric
returns from 15/01/2014 – 31/10/2015. This time period reflects a wide variety of economic
events and business cycles, as well as numerous types of geopolitical events. We calculated
M.I Cement beta of 0.39. Utilizing these figures and the CAPM, we arrived at a cost of equity
of 13.0%.
Cost of Debt: We arrived at an after-tax cost of debt value of 5.8% after accounting for the
tax shield provided by the company's 27.5%% marginal tax rate.
Capital Structure: We get the capital structure by using the total equity and total debt which
includes both long term and short term debt.

WACC: After making the above assumptions and calculations to determine the cost of equity,
after-tax cost of debt, and respective capital structure weights, we arrived at a WACC of 0.1

Discounted cash flow model: By using our cost of equity, we find out the price of the
company through Dividend Discount Model (DDM). We calculate the ROE and RR and thus
find out the growth rate- 0.04. By utilizing DDM, we calculate the price, which is 33.5.

We also calculate the FCFF through estimating capital expenditure and change in net
working capital and also assuming the change in other asset is zero. In this case the price is
55.64.

We calculate the weighted average of this four- P/E, P/BV, FCFF and DDM and the average
price is 63.2.

On the basis of the target price, we can say that M.I Cement Limited is overpriced in the
market as the current market price is 85.4.

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M.I Cement Factory Limited
Exhibit: 3
Income statement

2013-14 2014-15 2015-16E 2016-17E 2017-18E


BDT(mn)2013 BDT(mn)2014 BDT(mn)2015 BDT(mn) BDT(mn)2017
2016
Revenue 7,990.6 8,264.2 8,537.8 8,811.4 9,085.0
Cost of sales (6,731.7) (6,850.5) (6,969.4) (7,088.2) (7,207.0)
Gross profit 1,258.9 1,413.7 1,568.5 1,723.2 1,878.0
Other operating income 23.4 23.5 23.5 23.5 23.6
Administrative expenses (114.2) (157.2) (200.1) (243.1) (286.1)
Selling and distribution expense (231.0) (295.3) (359.6) (423.8) (488.1)
Operating profit 937.1 984.7 1,032.2 1,079.8 1,127.4
Non-operating income 41.0 6.6 (27.7) (62.1) (96.4)
Financal income/(expense) (66.2) (131.6) (196.9) (262.2) (327.6)
Share of profit from associates 21.7 39.3 56.9 74.6 92.2
Profit before WPPF & income tax 933.5 899.0 864.6 830.1 795.6
Worker's profit participton fund (44.5) (42.8) (41.2) (39.5) (37.9)
Profit before income tax 889.1 856.2 823.4 790.6 757.7
Income tax expenses:
Current tax (154.5) (143.2) (131.8) (120.4) (109.1)
Deferred tax 60.1 (64.2) (188.6) (312.9) (437.3)
Net profit after tax 674.4 648.9 623.3 597.8 572.2
Earnings per share 4.54 4.37 4.20 4.03 3.86

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M.I. Cement
Exhibit: 4
Balance Sheet

2013-14 2014-15 2015-16E 2016-17E 2017-18E


2013
BDT(mn) 2014
BDT(mn) BDT(mn) 2015 2016
BDT(mn) BDT(mn)2017
ASSETS
Non-current assets 4,018.3 4,210.2 5,538.3 6,288.9 7,039.5
Property, plant and equipment 3,926.8 4,203.6 4,480.3 4,757.0 5,033.7
Capital work in progress 91.5 6.6 921.8 1,356.4 1,790.9
Investment in associate companies 57.7 97.0 136.3 175.6 214.9
Current assets 7,271.0 7,754.6 8,238.1 8,721.7 9,205.2
Investment in shares 120.0 126.2 132.5 138.7 144.9
Inventories 626.5 722.2 818.0 913.7 1,009.4
Trade receivables 1,169.4 1,169.7 1,169.9 1,170.1 1,170.4
Current account with sister concerns 889.8 913.1 936.4 959.7 983.0
Other receivables 57.3 54.0 50.6 47.2 43.9
Advances, deposits and prepayments 346.0 367.9 389.7 411.6 433.5
Advance income tax 824.0 899.1 974.2 1,049.4 1,124.5
Cash and cash equivalents 3,238.0 3,502.4 3,766.8 4,031.3 4,295.7
TOTAL ASSETS 11,347.0 12,061.7 13,776.5 15,010.6 16,244.7
EQUITY AND LIABILITIES
Shareholders' equity 5,675.4 5,879.3 6,083.2 6,287.2 6,491.1
Share capital 1,485.0 1,485.0 1,485.0 1,485.0 1,485.0
Share premium 2,956.6 2,956.6 2,956.6 2,956.6 2,956.6
Retained earnings 1,015.3 1,221.1 1,426.8 1,632.6 1,838.3
Revaluation reserve 218.5 216.7 214.9 213.0 211.2
LIABILITIES
Non current liabilities 1,278.3 838.4 1,398.6 1,478.1 1,557.6
Long term borrowing net off current maturity 946.3 426.9 907.6 907.6 907.6
Liabilities for gratuity 44.1 60.0 75.8 91.7 107.6
Deferred tax liability 287.8 351.5 415.1 478.8 542.4
Current liabilities and provision 4,393.3 5,344.0 6,294.7 7,245.4 8,196.1
Trade payables 108.0 126.1 144.3 162.4 180.5
Other payables 135.0 150.2 165.3 180.5 195.7
Current portion of long term borrowings 543.8 558.2 572.7 587.1 601.6
Short term loan 3,143.1 4,142.6 5,142.2 6,141.7 7,141.3
Provision for tax liabilities 395.0 292.4 189.7 87.1
Liabilities for WPPF 44.5 42.8 41.2 39.5 37.9
Payable to IPO applicants 12.7 12.8 13.0 13.1 13.2
Unclaimed dividend 11.2 18.8 26.3 33.9 41.5
TOTAL LIABILITIES 5,671.6 6,182.4 7,693.2 8,537.4 9,548.2
TOTAL EQUITY AND LIABILITIES 11,347.0 12,061.7 13,776.5 15,010.6 16,244.7
Net Asset Value per share 38.22 39.59 40.96 42.33 43.70

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M.I Cement
Exhibit:5
Cash Flow Statement

2013-14 2014-15 2015-16E 2016-17E 2017-18E


2013 2014 BDT(mn)2015 BDT(mn)2016 BDT(mn)2017
BDT(mn) BDT(mn)

Cash flow from operating activities

Cash received from customers 7,475.4 8,240.8 9,006.1 9,771.5 10,536.9


Cash received from other operaing income 53.7 19.4 (15) (49) (83)
Cash received from non operating income 21.9 13.5 5.1 (03) (12)
Cash received from term deposit and others (44) 276.9 598.1 919.4 1,240.7
Cash paid to suppliers & employers (6,703) (6,670) (6,637) (6,603) (6,570)
Cash paid for operating expenses (355) (426) (497) (567) (638)
Income tax paid (329) (321) (313) (305) (297)
Net cash flows from operating activities 120.0 1,134.3 2,148.6 3,162.8 4,177.1

Cash flows from investing activities

Acquisition of property, plant and equipments (129) (576) (1,023) (1,470) (1,916)
Proceeds from sale of property, plant and equipments 1.0
Increase/(decrease) of payment for capital work in progress (01) 85.9 173.1 260.2 347.4
Investment in shares (09) (13) (17) (21) (25)
Paid to associate companies (200) (23) 153.6 330.4 507.3
Net cash used in investing activities (340) (526) (711) (897) (1,083)

Cash flows from financing activities

Receipt of short term loan 1,656.7 999.6 342.4 (315) (972)


Repayment of long term loan (461) (505) (548) (592) (636)
Paid against financial expertise (401)
increase of IPO applicants fund due to foreign exchange fluctuation (00) 0.1 0.4 0.6 0.9
Dividend paid (592) (438) (284) (129) 25.2
Net cash flows from financing activities 602.8 (344) (1,291) (2,238) (3,185)

Net increase in cash and csh equivalents 382.9 264.4 146.0 27.6 (91)
cash and cash equivalents at the beginning of the year 2,855.1 3,238.0 3,620.8 4,003.7 4,386.6
cash and cash equivalents at the end of the year 3,238.0 3,502.4 3,766.8 4,031.3 4,295.7

Net operating cash inflows per share 0.81 7.64 14.47 21.30 28.13

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Exhibit:6
Forecast

Year 2015 2016E 2017E 2018E

EPS 4.4 4.2 4.0 3.9


Dividend per
share 2.9 2.8 2.7 2.6
Price 85.4 81.9 81.6 81.3
Dividend yield 3.5% 3.5% 3.3% 3.2%

Exhibit:7
Weighted average cost of capital
CAPM
Risk-free rate 0.074
Market return 0.21
Market risk premium 0.14
Beta 0.39
K 0.13

WACC
Equity 5,879,329,648
Debt 5,127,781,531
Total value 11,007,111,179
Cost of equity 0.13
Cost of debt 0.06
WACC 0.1

Exhibit: 8
Dividend Discount Model

Net income 648,850,994


Shares outstanding 148,500,000
dividend 437,946,655
retention rate 0.33
Divident payout ratio 0.67
ROE 0.11

Growth,g= 0.04
required rate of return 0.13
D0 2.95
D1 3.05

Dividend Discount Model Valuation 33.5

15
M.I Cement Factory Limited
Exhibit:9
Discounted Cash Flow Model

FCFF 339,601,503 g 0.0539

EBIT 823,395,429 RR 0.3251

Depriciation 298,402,656 ROIC 0.1658

Capital expenditures 1,022,908,289

change in net working capital (467,145,450)


tax rate 0.275
WACC 0.10

firm value 8263043867

price 55.64

M.I Cement
Exhibit:10
Relative Valuation
Comparisons
Market Price
Cement Companies (BDT) EPS(BDT) P/E Marketcap MN (BDT)
Aramit Cement 40.8 0.51 76.5 1,372.1
Confidence Cement 87.3 5.32 20.1 3,954.9
Heidelberg Cement Bd. 566.1 20.88 22.4 32,077.1
Meghna Cement 109.5 4.48 21.8 2,520.1
LAFARGE SURMA
CEMENT LTD 75.1 2.43 38.1 87,916.0
Premiere Cement 79.6 3.83 15.4 8,414.9
average 32.4

M.I. Cement Factory


Limited 85.4 4.4 19.5 13,430.25

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2014-2015 2015-2016E 2016-2017E 2017-2018E

Stock price 85.4 81.9 81.6 81.3


earnings 648,850,994 623312524 597774054 572235584
EPS 4.4 4.2 4.0 3.9
P/E 19.5 19.5 20.2 21.1
BVPS 39.6 41.0 42.3 43.7
P/BV 2.2 2.0 1.9 1.9

M.I Cement valuation EPS BVPS


2015-2016 estimates 4.2 41.0
Multiples(P/E AND P/BV) 19.5 2.0
Target price 81.9 81.9

Exhibit:11
Weighted Average Price

Price weight price*weight


relative valuation P/E 81.9 0.25 20.5
P/BV 81.9 0.25 20.5
dividend discount model 33.5 0.25 8.4
FCFF 55.6 0.25 13.9

target price 63.2

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