TPI: new cement capacity needed

TPI: new cement capacity needed
Published: 20 July 2004

TPIPL’s three existing cement plants are reportedly running at near full capacity with a utilization rate of 95% in 2Q04. TPIPL will need to build a fourth cement plant line, a plan put on hold for quite a while. Total investment cost is US$450m for another 3.3m tons-per-year cement capacity. However, the company has already invested US$300m for this project and will need only another US$150m in new investment. Valuations remain attractive at PER of only 6.5x based on normalized EPS of Bt5.0 for this year. TPIPL is valued at Bt46.0 per share based on DCF valuation and an Outperform rating is maintained as shares offer a 43% upside.