The document summarizes an initial public offering of shares in Merex JSC, a concrete manufacturer in Mongolia. Merex JSC is offering 26 million common shares at a price of 100 Mongolian tugriks per share, raising a total of 6.5 billion tugriks. The IPO is being led by Standard Investment LLC. Projections estimate Merex JSC will have sales of 14.7 billion tugriks in 2014 growing to 22.1 billion tugriks in 2015, with net profits of 1.9 billion tugriks in 2014 growing to 3.4 billion tugriks in 2015. Contact information is provided for Standard Investment.

1. EXECUTIVE SUMMARY
IPO
Merex JSC
Company- and Listing
information
Only for qualified investors

2. Disclosure
The Financial Regulatory Commission (FRC) has approved the initial public offering
(IPO) of Merex JSC on December 18th 2013 and as a result the newly issued shares of
MEREX JSC are now publicly tradable.
Following document is part of the marketing material created by Standard Investment
LLC in order to promote the Merex JSC initial public offering.
All official information on the Securities Issuer can be found in the official prospectus
submitted to the FRC on September 18th 2013 in Mongolian language.
Investing in securities involves risk of loss that a client should be prepared to bear. An
investor must understand and be willing to accept those risks. Those risks include the
risk of changes in economic and market conditions and the volatility of securities.
IT IS NOT ALLOWED TO COPY, REPRODUCE AND/OR DISTRIBUTE PARTS OF THIS RESEARCH REPORT (OR
THE WHOLE CONTENT) TO THIRD PARTIES WITHOUT THE WRITTEN CONSENT OF STANDARD INVESTMENT
LLC.
© 2013 Standard Investment LLC

3. 3
Content
1. The Market | Concrete in Mongolia
2. Merex JSC | Company Information
3. The Offering | Critical Numbers
4. Contact | Get in touch

4. 44
The Market
Concrete in Mongolia
1

5. 5
1. The Market | Concrete in Mongolia
DEMAND FOR CONSTRUCTION MATERIAL IS HIGH
“ Strong demand from both the public and private sectors will keep Mongolia’s construction industry busy for the
foreseeable future, though the heavy calls on the building trade is stretching resources and pushing up costs.
According to a World Bank report issued in early 2013, capital expenditure in Mongolia has experienced a 35-fold increase
over the past 10 years, with the construction sector’s contribution to GDP expanding by 25.6% in 2012, mainly due to a rise
in public spending. More than 16% of all bank loans went to the construction industry in 2012, the report said, up from
11.8% the prior year, while the real estate sector’s share of lending climbed to 17.3%, higher than mining’s 14.4%. The
expectation is that demand for housing will remain high for some years to come, as citizens in lower income brackets seek
to take advantage of inexpensive loans and developers launch real estate projects aimed at the growing higher end of the
market. “ Source: oxfordbusinessgroup.com
2006 2007 2008 2009 2010 2011 2012 2013e 2014e 2015e
1,000
2,000
3,000
4,000
5,000
Concrete consumption in 1,000 m3
Sources: National Statistics Office Mongolia, Standard Investment
2014-2015e
2012
Residential Commercial Infrastructure
0.9
1.1
0.5
1.5
1.8
1.0
+100%+63%+66%
Estimated growth of market segments

6. MEREX JSC
Company Information
2
6

7. 7
2. Merex JSC | Company Information
THE COMPANY
Merex LLC was established in September 2012 in Ulaanbaatar.
The CEO of the Security Issuer will be independent and work for the company
under contract. The CEO of the Security Issuer is decided to be Munkhzolboo
MUNKHDULAM who is working with the company since its establishment. He has
graduated with a bachelor degree of International Relation from Istanbul
University, Turkey in 2007.
In 2013 the company invested 3.9 billion MNT in total into the company which
came from the shareholders capital, and chose to build the batching plant on an
area of 20,000m2.
The concrete batching plant was bought from Korea with a 5 year guarantee.
After the plant was built in Songino Khairkhan district, Korean engineers were
contracted to come to inspect the plant to check all installations for any
construction errors.
The Security Issuer also owns 5 pump trucks, 1 loader and 1 automobile. The
fleet is currently the Security Issuer’s largest asset.

8. 8
2. Merex JSC | Company Information
MANAGEMENT
COO
Byambabayar Gombajav
Ex Sales Manager at Remicon JSC between
2008-2013
CEO
Munkhzolboo Mukhdulam

9. 9
2. Merex JSC | Company Information
PROFILE AND PRODUCTION CAPACITY
Capacity
150 m3 /hour
252,000 m3 /year
Land
20,000 m2
Equipment
5 Pump Trucks(36m, 43m, 44m)
24 Mix Trucks
Employees
12 Employees (planned 79 in 2015)
Competition
45 concrete manufacturers exist in Ulaanbaatar. Many of them are owned by
construction companies. The majority of competitors do not own their own fleet.
Merex JSC is one of the only 4 companies who own batching plant, mixer trucks and
pump trucks. The high number of mix trucks and pump trucks allows Merex JSC to
deliver quickly and finish its work at the construction site fast.

10. The Offering
Critical Numbers
3
10

11. Merex JSC
Type of Security: Common Stocks
Offerting Price: MNT 100 (~ USD 0.06)
Number of shares offered: 26’000’000
Placemenet: 40% of Total Capital
Lock-up Periode: none
Bookrunner: Standard Investment LLC
Stock Exchange: Mongolia Stock Exchange (MSE), Ulaanbaatar
Listing: February 2014
Release Date of Prospectus: 18.12.2013
Dividend Policy: 25% of Net Profit
3. The Offering | Critical Numbers
THE IPO

12. 3. The Offering | Critical Numbers
THE IPO
Rationale for Merex JSC’s valuation
The offering price of 100 MNT per share gives the Security Issuer a total
market cap of 6,500,000,000 MNT at the IPO. This amount almost equals the
amount directly invested into the business with no additional value added.
Merex JSC basically lists at book value.
№ Investing items Investing money Percentage
Investment amount
Pre IPO investment IPO investment
1 Land 948,000,000 15% 948,000,000
2 Batching plant 1,118,000,000 17% 1,118,000,000
3 Office and infrastructure 130,000,000 2% 130,000,000
4 Equipment 3,594,000,000 55% 1,833,500,000 1,760,500,000
5 Furniture 50,000,000 1% 50,000,000
6 Current assets 660,500,000 10% 1,000,000 659,500,000
Total amount 6,500,500,000 100% 3,900,500,000 2,600,000,000

13. 13
The only other MSE listed concrete manufacturer is Remicon JSC.
Remicon JSC, which started with the same production capacity as Merex JSC
became one of the MSE TOP 20 companies with a current market cap of 13.2
bln MNT (December 30th, 2013)
3. The Offering | Critical Numbers
COMPARABLE COMPANIES
Remicon JSC Merex JSC
Market Cap at IPO 7.8 bln. MNT
in 2008
6.5 bln. MNT
in 2014

14. Projections for 2014
3. The Offering | Critical Numbers
PROJECTIONS
2014e
(in MNT)
2015e
(in MNT)
Sales income 14,773,836,000 22,160,754,000
Cost of Sales 10,396,992,467 15,595,488,701
Gross Profit 4,376,843,533 6,565,265,299
Operational Cost 2,167,502,000 2,540,867,600
EBIDTA 2,209,341,533 4,024,397,699
Cost of Tax 220,934,153 556,099,425
Net Profit 1,988,407,379 3,468,298,274
Dividend Distribution 25% 497,101,845 867,074,569

15. Contact
Standard Investment
4

16. Standard Investment LLC
Jargal Chuluuntulga
CEO
+976 9906 5017
info@standardinvestment.mn
4. Contact | Get in touch
CONTACT