Jump to content

Welcome to Tezi Mandee - Community Of Pakistani Investors & Traders
Register now to gain access to all of our features. Once registered and logged in, you will be able to create topics, post replies to existing threads, give reputation to your fellow members, get your own private messenger, post status updates, manage your profile and so much more. If you already have an account, login here - otherwise create an account for free today!

Welcome to Tezi Mandee - Community Of Pakistani Investors & Traders

Welcome to Tezi Mandee - Community Of Pakistani Investors & Traders, like most online communities you must register to view or post in our community, but don't worry this is a simple free process that requires minimal information for you to sign up. Be a part of Tezi Mandee - Community Of Pakistani Investors & Traders by signing in or creating an account.
  • Start new topics and reply to others
  • Get latest news on Karachi Stock Market
  • Subscribe to topics and forums to get automatic updates
  • Registered member get added in mailing list for mailing updates
  • Get your own profile and make new friends
  • Customize your experience here
  • Be the first to know the KSE latest announcements shared by our members
  • Registered members get access to Protected Forums and topics
  • Registration is free Create Account
  • If you are already a member just Sign in
To Create Account ( Click Here )
To Sign In ( Click Here )
 

AVN -- AVANCEON

- - - - -

398 replies to this topic

#1
fasee

    Technical Analyst and Strategic Investor

  • Moderators
  • 9,302 posts
  • Joined 09-November 07
  • Skin: Main Blue
  • Offline
    • Gender:Male
    • Country: Country Flag

    Current mood: Creative
    Reputation: 1,543
    Today, we are presenting an informative piece on one of the upcoming IPOs at the Pakistan capital market.

    3rd IPO of the year - Avanceon Limited
    Avanceon Limited (AVN) intends to issue 25.17mn shares i.e. 25% of post IPO paid up capital through listing of its shares on the Karachi and Lahore Stock Exchanges. In this regard, AVN is seeking interest from select group of institutional and high net worth investors to participate in the book-building process, which will be followed by a general public offering (IPO). Floor price for the transaction has been set at PKR 14/share and formal book-building will be conducted on 27-28 November, 2013.

    About the company
    The company is a leading provider of automation, control systems integration, proprietary energy management solutions and support services. It is among the select group of ‘certified members’ of Control System Integrators Association (‘CSIA’) and is also listed on the Control Engineering Magazine's System Integrator Hall of Fame.
    Currently, AVN has offices in Dubai, UAE (covering Middle East) by their 100% owned subsidiary Avanceon Free Zone Establishment UAE (AFZE), Lahore, Pakistan (covering South East Asia) and Pennsylvania, United States of America (covering North America) by their other 100% subsidiary, Engro Innovative Inc. USA (EI). AVN at present operates in three broad categories, which are: 1) automation controls, 2) energy efficient systems, and 3) aftermarket services. As per current shareholding, the Wain Family owns ~100% of the existing 75.5mn shares of Avanceon Limited.

    Global Clientele
    AVN has been into the automation business for last 24 years and has, over the years, evolved from being an automation company to a 360-degree solution provider for automation, energy management and service & maintenance needs of their customers. The company has explored various frontiers and geographies establishing strong footprint in South Asia, Middle East and USA.

    Servicing clients over a span of two decades, AVN has completed several projects for major bluechip companies enabling it to earn strong credentials, move up the learning curve and develop a diverse client base essential for a sustainable business model.

    Pakistan operations
    In Pakistan, AVN is the only local company with the capability of automation and process controls, energy management systems and specialized solutions. International companies that used to operate in Pakistan have taken an exit due to the prevailing political / law & order situation and no other local company has the expertise to deliver such complex solutions. AVN has taken over several contracts, which were allocated to international contractors earlier due to their inability to meet on ground service requirements.

    This window of opportunity has enabled AVN to establish long term relationship with bluechip companies. AVN has implemented various solutions in different companies, including big names like Fauji Fertilizer Company (FFC), Nestle Pakistan (NESTLE), Engro Fertilizer (EFERT) and Engro Foods (EFOODS), Pakistan Petroleum Limited (PPL), Akzo Nobel Pakistan (AKZO), Kott Addu Power Company (KAPCO) and P&G Pakistan, to name a few.

    Middle East operations
    In the Middle East, AVN has gained dominance through its unique international execution model. The company is able to compete with several major competitors through its aggressive pricing and, therefore, has managed to come in the league of major automation and control provider in the Middle East. Saudi Aramco, Dubai Metro and Kuwait Petroleum are few big names to whom AVN has successfully provided and implemented various automation solutions.

    Outlook
    Automation and process control companies on a global level have expanded their horizon from core automation to training and implementation of safety systems. Going forward, AVN intends to capitalize on its inherent strengths to further penetrate the Middle East market by setting up offices in Qatar, Kingdom of Saudi Arabia (KSA) and the UAE. The management is committed to quality and to deliver exceptional service standard in the operating segments. AVN’s growth strategy is horizontal; they are committed to horizontal expansion and will enter new markets with the existing service offerings. Management is of the view that there is a lot of unmet demand for automation, energy efficiency systems and aftermarket services in South Asia and Middle East and providing significant growth potential to the company.



    AHL Research
    It is not the strongest of the species that survive, nor the most intelligent, but the one most responsive to change.


    #2
    fasee

      Technical Analyst and Strategic Investor

    • Moderators
    • 9,302 posts
    • Joined 09-November 07
  • Skin: Main Blue
  • Offline
    • Gender:Male
    • Country: Country Flag

    Current mood: Creative
    Reputation: 1,543
    Avanceon: Technology play to hit the market

    Automation services provider Avanceon Ltd intends to issue 25.16mn shares at a floor price of PkR14/share to raise funds for business development projects in the UAE, where 75% of these shares will be offered via book building. With a history of 24 years and presence in Pakistan, UAE and North America, Avanceon has built a strong clientele spanning a host of industries globally. After successive losses, the company witnessed a phenomenal financial turnaround in CY12 as a result of sizable revenue growth from UAE operations, de-leveraging and cost optimization ala the International Execution (IX) model. Going forward, management expects a 5-year revenue and earnings CAGR of 21% and 13%, respectively, driven primarily by prospective infrastructure projects in the UAE. At a floor price of PkR14/share, Avanceon implies attractive valuations - CY13F P/E of 2.9x, P/B of 0.8x and D/Y of 14%.

    The transaction: Avanceon Ltd intends to issue 25.16mn ordinary shares, 75% of which will be offered via Book Building (Nov 27'13 - Nov 28'13) at a floor price of PkR14/share while the remaining will be offered to the general public at the strike price determined through book building. Funds raised through the transaction will primarily be utilized for business development projects in the UAE.

    The company: With a market footprint in Pakistan, UAE and North America, Avanceon has been a prominent provider of automation, control systems integration, energy management solutions and support services for the last two decades. Core services of the company spans across a wide range of industries including oil & gas, FMCGs, power and cement (local as well as international) while After Market Services (AMS) allow for stable recurring income. Notably, Avanceon's International Execution (IX) model offers a cost competitive approach for cross-border projects, whereby the company leverages local resources while enjoying international pricing. .

    Financial turnaround: Avanceon posted consolidated NPAT of PkR763mn (EPS: PkR7.6) in CY12 after successive losses, where de-leveraging and cost optimization viz the IX model along with a 67%YoY growth in revenue to PkR2.1bn and gains from a one-off loan settlement led to the phenomenal turnaround. Going forward, management estimates revenue to grow at a 5-year CAGR of 21% with increased focus on the UAE market. In this regard, major prospective projects include infrastructure ventures in Qatar and Dubai while contract backlogs and gains from PkR devaluation (majority of the projects are billed in US$) are expected to further augment revenues. Moreover a de-leveraged balance sheet and tax concessions (CY13F-CY18 average projected effective tax rate: 8%) results in a 5-year earnings CAGR of 13% for the company, according to management estimates. In 1HCY13, Avanceon posted NPAT of PkR210mn (EPS: PkR2.09) while management expects CY13 earnings at PkR474mn (EPS: PkR4.71), which implies a CY13F P/E of 2.9x at a floor price of PkR14/share. .

    Investment Perspective: While Avanceon's business model shows promise given the company's competitive advantage and a hedge against PkR devaluation, we highlight that much of the growth in revenue is projected from prospective infrastructure projects in Qatar (FIFA World Cup 2022) and Dubai (Expo 2020), which are still in the pipeline. That said, with a CY13F P/E of 2.9x, P/B of 0.8x and D/Y of 14% at a floor price of PkR14/share, valuations seem compelling.
    It is not the strongest of the species that survive, nor the most intelligent, but the one most responsive to change.

    #3
    fasee

      Technical Analyst and Strategic Investor

    • Moderators
    • 9,302 posts
    • Joined 09-November 07
  • Skin: Main Blue
  • Offline
    • Gender:Male
    • Country: Country Flag

    Current mood: Creative
    Reputation: 1,543
    The Bell

    Avanceon – Unique business on offer

    An engineering solutions provider

    Avanceon is primarily involved in providing automation, control systems integration, energy management solutions and support services. It has been in the automation business since 1989 and has grown to become Pakistan’s premier automation service providing company, catering to various industrial conglomerates and blue chip companies including Nestle, Aramco, Engro, and OGDC etc.

    Increasing visibility – the key rationale for IPO

    The company highlights that its rationale for going public is that: i) It would enhance company’s visibility in the international market and allow it to augment its existing client base ii) It will unlock value of Employee Stock Options (5mn shares at a strike price of PKR1/share) and thus enable AVN to retain its existing human resource and iii) The cyclical industry in which AVN operates warrants minimum use of debt financing.

    ‘IX’ Model – Linchpin for Avanceon
    AVN’s International Execution (IX) model allows the company to execute a significant portion of its offshore projects from Pakistan, thereby enabling it to take advantage of lower labor costs.

    Attractive valuations; recommend subscribe
    Management estimates suggest CY13/14 EPS of 4.7/7.1. The stock seems attractive at the offer price of PKR14/share, at which CY13E/14E PER comes to 3.0/2.0x.

    Key Risks
    Despite stellar earnings growth potential, we highlight some key risks including 1) Employee turnover and 2) volatile earnings stream. .

    Elixer

    It is not the strongest of the species that survive, nor the most intelligent, but the one most responsive to change.

    #4
    Zahir Shah

      Advanced Member

    • Member
    • 484 posts
    • Joined 08-August 07
  • Skin: Main Blue
  • Offline

    Current mood: None chosen
    Reputation: 0
    IPO Avanceon coming 7-8 january. Source LSE

    seniors plz recommend that should we go for it or not

    #5
    fasee

      Technical Analyst and Strategic Investor

    • Moderators
    • 9,302 posts
    • Joined 09-November 07
  • Skin: Main Blue
  • Offline
    • Gender:Male
    • Country: Country Flag

    Current mood: Creative
    Reputation: 1,543
    After successful book building, Avanceon is now available for general public

    After a fully subscribed successful book building process on 26th and 27th Nov’13 where the company offered 18.9mn shares which was set at its floor price of 14.0/share, Avanceon Ltd (AVN) will be offering an additional 6.3mn shares through an Initial Public Offering (IPO) to general public scheduled on 7th and 8th Jan’13. Below is a brief over view of company’s operations, nature of business, clientele and future outlook.

    About the company

    The company is a leading provider of automation, control systems integration, proprietary energy management solutions and support services. It is among the select group of ‘certified members’ of Control System Integrators Association (‘CSIA’) and is also listed on the Control Engineering Magazine's System Integrator Hall of Fame.
    Currently, AVN has offices in Dubai, UAE (covering Middle East) by their 100% owned subsidiary Avanceon Free Zone Establishment UAE (AFZE), Lahore, Pakistan (covering South East Asia) and Pennsylvania, United States of America (covering North America) by their other 100% subsidiary, Engro Innovative Inc. USA (EI). AVN at present operates in three broad categories, which are: 1) automation controls, 2) energy efficient systems, and 3) aftermarket services. As per current shareholding, the Wain Family owns ~100% of the existing 75.5mn shares of Avanceon Limited. The company also currently doesn’t have any long debt with only a minor PKR 55.2mn short loan (unsecured) from a director on its books.

    Global Clientele

    AVN has been into the automation business for last 24 years and has, over the years, evolved from being an automation company to a 360-degree solution provider for automation, energy management and service & maintenance needs of their customers. The company has explored various frontiers and geographies establishing strong footprint in South Asia, Middle East and USA.
    Servicing clients over a span of two decades, AVN has completed several projects for major blue-chip companies enabling it to earn strong credentials, move up the learning curve and develop a diverse client base essential for a sustainable business model.

    Pakistan operations

    In Pakistan, AVN is the market leader of automation and process controls, energy management systems and specialized solutions. International companies that used to operate in Pakistan have taken an exit due to the prevailing political / law & order situation and no other local company has the expertise to deliver such complex solutions. AVN has taken over several contracts, which were allocated to international contractors earlier due to their inability to meet on ground service requirements.
    This window of opportunity has enabled AVN to establish long term relationship with blue-chip companies. AVN has implemented various solutions in different companies, including big names like Fauji Fertilizer Company (FFC), Nestle Pakistan (NESTLE), Engro Fertilizer (EFERT) and Engro Foods (EFOODS), Pakistan Petroleum Limited (PPL), Akzo Nobel Pakistan (AKZO), Kott Addu Power Company (KAPCO) and P&G Pakistan, to name a few.

    Middle East operations

    In the Middle East, AVN has gained dominance through its unique international execution model. The company is able to compete with several major competitors through its aggressive pricing and, therefore, has managed to come in the league of major automation and control provider in the Middle East. Saudi Aramco, Dubai Metro and Kuwait Petroleum are few big names to whom AVN has successfully provided and implemented various automation solutions.

    Outlook going forward

    Automation and process control companies on a global level have expanded their horizon from core automation to training and implementation of safety systems. Going forward, AVN intends to capitalize on its inherent strengths to further penetrate the Middle East market by setting up offices in Qatar and Kingdom of Saudi Arabia (KSA). AVN’s growth strategy is horizontal; they are committed to horizontal expansion and will enter new markets with the existing service offerings. Management is of the view that there is a lot of unmet demand for automation, energy efficiency systems and aftermarket services in South Asia and Middle East and providing significant growth potential to the company.



    AHL Research
    It is not the strongest of the species that survive, nor the most intelligent, but the one most responsive to change.

    #6
    hammad iqbal

      Regular Member

    • Senior
    • 1,399 posts
    • Joined 04-April 07
  • Skin: Main Blue
  • Offline
    • Gender:Male
    • Country: Country Flag

    Current mood: Breezy
    Reputation: 199
    Avanceon Ltd was having problem with funding.....thas why they launched share and its obvious companies offer IPO for funding....


    Now why they were asking now, it was happened in last couple of year this company back to Wain Family, as it was previously held by Wain Family in start it build up with very gr8 pace and in last 10 year 49% shares with Wain Family and 51 % taken by Engro but in last couple of years Engro lay's off the share and ask Wain Family to take it back.....now they are collecting funds .......although the business industrial automation is nice and unique one.....but
    investing in it would not give us gr8 benefit.... it might get early gain but may settle down around same price and after 1 year its build from these funds can show the way......
    Note:
    Put your money on your Analysis don?t fall on others wording.
    Think before my statements that just a Assumption.






    Karachi Stock Exchange (KSE) Daily Reports


    Top Pakistani Sites        Haroof Top Sites    Promoted at Global Promote

    Indemnity, Disclaimer & Disclosure Notice:
    • By visiting TeziMandee.com you indicate your acceptance of our Forum Rules Disclaimer & Disclosure and indemnify TeziMandee.com, its associates and related parties of all claims howsoever resulting from the usage of the forum.
    Disclaimer: Trading or investing in stocks & commodities is a high risk activity. Any action you choose to take in the markets is totally your own responsibility. TeziMandee.com will not be liable for any, direct or indirect, consequential or incidental damages or loss arising out of the use of this information.
    Disclosure: The information in this forum is neither an offer to sell nor solicitation to buy any of the securities mentioned herein. The writers may or may not be trading in the securities mentioned.
    • All names or products mentioned are trademarks or registered trademarks of their respective owners.

    Copyright © 2006 - 2012, TeziMandee.com All Rights Reserved.
    eXTReMe Tracker