OGC: A Historical Comparison
Ocean Glass (OGC - 65 baht) is a glassware manufacturer and exporter. A financial analysis has been perfromed below, following the format of looking at the results of the last two bullish periods in Thailand's economy (1990 to 1993 and 2001 to 2004).
For those unfamiliar with the company, OGC is a manufacturer of various type of glass products. The company has three kinds of products: Blownware (drinking glasses) , Pressware (glass bowls, tea cups, etc.) and Stemware (Wine glasses). These are high quality products that are often presented with a decorative twist. The quality of their glass products is very high. Approximately 50% of the company’s sales come from Asia with China and India being the two largest export customers. Another 30% come from within Thailand and 16% from Europe. The company’s vision is to be the Market Winner in the world through innovation, value image and operational excellence while maintaining sustainable growth and profitability, besides top quality products. Ocean Glass has been a long time favourite of Thaistocks.com. Recent stock price performance has been disappointing. There was positive news a couple months back when the company announced that it will be adding another glass furnace (they currenlty operate two furnaces). This is a fairly large and expensive project, but will increase capacity by up to 50% when it is completed. OGC has had steady revenue growth in both time periods, EPS growth has been a bit erratic, but still at high attractive levels. OGC's PE ratio was 24 times in 1993. In recent years it has been in a range of 7 to 10. Investors have placed less of a premium today than in the last bullish period. There does not seem to be any micro-cause of this devaluation as the company has strong growth prospects with the upcoming capacity increase. In general, there seems to be a macro-devaluation of many of the mid to smaller value and growth companies Thaistocks.com follows, from the early 90's time period to present. Financial ratios 2004F 2003 2002 2001 1993 1992 1991 1990 Sales (Bt mn) 1,408 1,323 1,215 1,190 471 457 337 378 Gross margin (%) 42% 39% 44% 40% 45% 44% 44% 44% Net profit (Bt mn) 216 180 216 274 54 82 48 76 EPS (Bt) 10.44 8.72 10.45 13.22 3.43 5.1 3.17 5.09 EPS growth (%) 20% -17% -21% 105% -33% 61% -38% - PER (x) 8.6 10.3 8.6 6.8 24.05 - - - Dividend (Bt) 6.26 5.23 6.27 5 1.79 2.87 - - Dividend yield (%) 7% 6% 7% 6% 2% - - - ROA (%) 17% 14% 18% 24% 4% 12% 8% 18% ROE (%) 22% 20% 27% 46% 9% 30% 21% 43% Best Regards, Thaistocks.com
