Astron - ATR: A zircon player in Aus and China

If I've got this right, threads started over 2 years ago haven't been carried over to the new forum...?

So I thought I'd start a new thread for Astron since I hold. If the old thread turns up, we'll just ignore this shall we.

So for anyone that hasn't heard of Astron (which is probably most people given the illiquidity of the stock), the are a zircon materials company that operates mostly in China, but is listed in Australia. They import zircon raw materials to their Chinese factories (which are of course low cost by world standards) and do various value adding things (it's complicated) to the zircon flour and sell numerous downstream products.

They have a strong revenue that is roughly equal to their market cap at the moment which has been growing continously for many years. Their NTA are also pretty close to market cap. NPAT was growing strongly but stalled a little over the last year. However, they have quite a large capacity expansion coming online for high value fused zirconia products that is expected to increase revenue and profit in the near future.

They are also developing the Donald Mineral Sands mine in Aus, which, if it gets up and running (i think they're a year or two away from that) will make them a vertically integrated zircon producer/supplier.

They have paid a divident of 10c for the last two years, expect NPAT to be around $20 million, and at the current price of $2.35, that gives them a market cap of $140 mil and P/E of about 7.

Anyway, only wanted to find this thread to point out that there were 270k shares traded today. Now that isn't a lot by any standard, but as I pointed out before, the biggest problem with this company is liquidity (i think the top 20 shareholders own something like 80% of the company), and that's the most shares traded in a day in over 2 years! Also, they've had a couple of dodgy disclosure issues in the past, so though something might be up.

Cheers

Damo

Where do you get NPAT of $20 Mill from?

The latest guidance (released in November) was for $18mill.

Was writing from memory TLA87. I stand corrected :)

Sweet :-)

They haven't announced a change to that guidance, so here's hoping they hit it. Looking very cheap if they do.

Yup, definately hope so. I put the money I made from selling half my shares in ADY into Astron, making it my single biggest holding right now.

Wonder what happened concerning that possible 'transaction' (takeover?) mentioned a few months back?

Whoah! See this morning's announcement?

Surprised the bid is still only $2.50...

Quote:

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Originally Posted by stephen

Whoah! See this morning's announcement?

Surprised the bid is still only $2.50...

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Why would you post that before open?

Retard.

Well sellers are currently cleaned out.
Look to me that the shares are worth something north of $4.50.

After the sale they will have $3.85 a share in cash backing.

I would say it is worth anywhere between $3.60 and $4.50 depending on the value the market gives to the Donald project and the earnout component of the purchase price (could be worth another $50mill cash), less the capital costs of establishing the mining operations and the titanium processing plant.

Amazing stuff.

Well done to the patient shareholders who held on!

"Retard"

Geez, that's a bit harsh.

Ahem... Firstly - Woohoo! :)
Have increased my holding twice in the last 3 weeks. Something (blind luck perhaps) told me something could be up.
I wonder what this'll trade up to today. Given the cash position will be $3.85 a share, and that they still have a substantial busines in the the DMS and Gambia, I'm surprised it didn't open up near $4. I think I'll hold until it gets up to about that level at the very least.
Well done holders!

Damo,

Most of that cash is earmarked for investment in capital spending on Donald and the TiO2 venture, so there is likely to be a discount built in to the sp.

Quote:

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Originally Posted by stephen

"Retard"

Geez, that's a bit harsh.

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I was annoyed at the time because my leading bid for 10k shares at 2.80 on open got overtaken by bids for 60k or so of shares 1 minuted before trading started.

One thing I'm not too sure about is how much tax they'd have to pay on the sale of the plants. And whether it's under Chinese or Australian corporate jurisdiction. Management should have made some sort of indication.

So the first rule of Sharetrader is - don't say anything until it's too late. I will curb my impulses in future.

Quote:

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Originally Posted by drworm

One thing I'm not too sure about is how much tax they'd have to pay on the sale of the plants. And whether it's under Chinese or Australian corporate jurisdiction. Management should have made some sort of indication.

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Good point.

They are Chinese companies that are being sold so no Australian CGT should be payable. The question would be whether there is capital gains tax on the sale of chinese shares...

Quote:

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Originally Posted by SectorSurfa

thought you may enjoy this read TILA87

http://www.asx.com.au/asxpdf/2007082...16w8wf4l9x.pdf

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Thanks, that was interesting.

ATR's report out today shows that we are lucky a sale agreement has been entered into.

It is difficult to understand why a revised forecast was not issued to the market. Surely they would have known that the company was going to miss its forecast by 20% !!!

TLA

From memory you picked somewhere around $14m NPAT a long while back? That's been pretty accurate.

And I replied that if so I thought ATR was heading to $1.50.

I think if not for the sale agreement ATR might be trading at those levels today (where my buy order would be lurking!).

The missed profit forecast raises the question of how much you can trust this management team with large amounts of cash.

I think that as this management created the wealth in the first place they could be trusted in the future.

Clearasmud