Concepcion Industrial Corporation (PSE: CIC) Prospectus at a Glance

Concepcion Industrial Corporation (CIC, the “Company”) derives majority of its revenues from sale of air conditioning, refrigeration, and after sales services through its two subsidiaries. Below is CIC’s corporate structure:

CIC1

CCAC, a joint venture with Carrier Air Conditioning Philippines, Inc., not only offers Carrier and Toshiba brand air conditioners and Totaline parts but also offers Condura and Kelvinator brands. The Company operates the largest air conditioning manufacturing facility in the Philippines with 500,000 units per year capacity and a production area of 19,620 sq. m. in Light Industry and Science Park in Cabuyao, Laguna, Philippines. 

CDI offers refrigerators and freezers including Condura and Kelvinator brand. Refrigeration equipment is manufactured in CDI factory adjacent to CCAC also in Light Industry and Science Park with a capacity of 300,000 units annually.

Below is CIC’s significant financial information:

CIC2

CIC plans to spend 31% of the initial public offering (IPO) proceeds for expanding the products it offers through a joint venture with Midea, a brand leader in China, as a supplier of appliances such as air conditioners, refrigerators, and laundry and kitchen appliances.

Valuation

Computation of total outstanding shares of CIC after IPO is as follows:

CIC3

Not much information is available to thoroughly analyse the quality of earnings of CIC but assuming that CIC will report in 2013 the same earnings as of 2012 (426.1 million), CIC will be able to register an earnings per share of P1.63. At an IPO price of P26, CIC is trading at 16x PE ratio which is reasonable for a company that participates in the increasing buying power of the Philippine population.

Disclaimer: I do not claim to be an expert and nothing I say should be taken as a recommendation to buy or sell. Read more in the ABOUT page.

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3 thoughts on “Concepcion Industrial Corporation (PSE: CIC) Prospectus at a Glance

  1. Nice 1 idol Renzie! I’ve been waiting for this! Big tnx! 🙂
    Do you think this company is a solid consumer play and a monopoly too since i don’t remember any other company offering such products CIC offers? Love to hear your thoughts. Big tnx! More power! 🙂

    Reply
  2. Nice 1 idol Renzie! I’ve been waiting for this! Big tnx! 🙂
    Do you think this company is a solid consumer play and a monopoly too since i don’t remember any other company offering such products CIC offers? Love to hear your thoughts. Big tnx! More power! GODBLESS

    Reply
    • Hello,

      Yes, i think so with the addition of kitchen and laundry appliances in its product line through JV with Midea. The weakness of CIC is weakening peso as the Company imports its materials used in manufacturing. However, weakening peso increases the buying power of filipinos with OFW which in turn may benefit CIC. Probably as long as the weakening of peso is not dramatic, CIC will be just fine.

      Renzie

      Reply

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