This document provides an overview of Navana CNG Limited (NCL), a Bangladeshi company that converts vehicles to run on compressed natural gas and operates CNG refueling stations. It details NCL's financial performance over the past years, with revenue growth of 5.3% in the most recent quarter but a decline in net profits. The document also notes NCL's plans to enter the liquefied petroleum gas market and provides a technical analysis of NCL's stock price.

1. Share Information
Scrip Code NAVANACNG
Sector Engineering
Market category A
Current price (as of January 5, 2017) BDT 80.0
52-week price range BDT 43.2-81.0
Cash Dividend (FY15-16) 15%
Dividend yield (FY15-16) 2%
Payout ratio (FY15-16) 46%
Market Cap, Mn BDT 5,269.8
Number of shares, Mn 68.53
Free float 57.51%
Financial year-end 30-Jun
P/E (Annualized) 25.6
P/B 2.4
Income Statement, (BDT mn) 1Q16-17 1Q15-16 FY15-16 FY14-15
Revenue 658.7 625.6 1,950.7 2,571.7
Less: COGS 453.7 417.6 1,338.2 1,774.4
Gross Profit 205.0 208.1 612.5 797.3
Operating expense 90.3 80.5 233.6 337.2
Operating profit 114.8 127.6 378.9 460.1
Other income 1.4 6.9 29.9 11.6
Interest expense 31.6 40.7 79.1 143.3
WPPF 4.0 4.5 15.7 15.6
PBT 80.6 89.4 313.9 312.7
Tax 24.0 33.7 83.9 88.1
PAT 56.6 55.7 230.0 224.6
Restated EPS 0.83 0.81 3.28 3.36
Balance sheet Performance 1Q16-17 FY15-16
Property, plant & equipment 1,207.58 1,201.15
Long term loan 1,484.40 1,256.54
Capital and reserves (Equity) 2,205.24 2,151.75
Current ratio 2.00 2.28
Debt-equity ratio 1.19 1.06
BVPS 32.18 31.40
Key Ratios (%) 1Q16-17 FY14-15
Revenue growth 5.3% 31.8%
Gross margin 31.1% 30.2%
Operating margin 17.4% 21.4%
Net Margin 8.6% -2.4%
Share holding information (%) Sponsor/Director Institute Public
Share holding (as on Jun 30, 2016) 42.49% 19.62% 37.89%
Share holding (as on Oct 31, 2016) 42.49% 19.58% 37.93%
Share holding (as on Nov 30, 2016) 42.49% 23.44% 34.07%
NAVANA CNG LIMITED
Equity Note - January 05, 2017
Nature of Business
The principal activities of Navana CNG Limited (NCL) are conversion of petrol and
diesel driven vehicles to CNG driven vehicles, CNG re-fueling station and other
related services. NCL holds 99.99% share of two subsidiaries— Navana Engineering
Ltd manufactures polymer, poly ethylene, pipes, tubes, conduits, fittings for
household, industrial and commercial use and Navana Welding Limited produces
welding electrode rod, welding and cutting equipment, cutting rod and welding.
Future business prospects
NCL is among the five companies set to roll out their liquefied petroleum gas
(LPG) business this year in a bid to capture the household segment of the market,
which is likely to witness a rush to set up LPG plants worth about Tk 900 crore in
total. The demand for LPG will certainly rise in future given shortage natural gas
both for household and industrial consumption and gas crisis while new ventures
are not getting gas connections. It is relatively new in Bangladesh and the market
is still small. But it costs several times more than natural gas and 20 percent more
than kerosene.
Double digit quarterly bottom line growth (YoY)
In 1Q16-17, NCL registered a 14% bottom line growth compared to 1Q15-15 even
though topline revenue growth was only 4% YoY thanks to dramatic fall in interest
expenses because of the lower level of interest rate. Operating profit increased by
1.5%, YoY and EPS from continuing operation rose to BDT 0.78 in 1Q16-17
compared to BDT 0.68 in 1Q15-16. NCL generated 31.8% revenue growth in FY15-
16 YoY while posting -2.4% bottom line growth owing to high interest expenses
from long term loan. Along with profit after tax, earning per (EPS) share fall from
BDT 3.36 FY14-15 to BDT 3.28 FY15-16.
Technical Analysis
NCL at the moment seems to be at a fully overbought position along with very
powerful resistance level. Smart money and/or institutional investors who actually
invested in this stock from the beginning may be trying to move the price up.
However, if they fail then they are likely to just offload their position at any level
from here. New investors may want to wait for a couple of days for a sort of
correction or a sign of sustenance at resistance level where they can enter to
follow the upper resistance, which is actually a long way from current price and
would be 2-3 times from current price. It seems that after remaining at a low level
for a long time, NCL is just beginning to move up for a while to eventually reach a
high price which it has previously touched a few times in the past.
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