bravorat: 20 Oct-MARC

MARC

Outstanding shares: 1,735,676,781

1Q earnings: loss 24,797,585 (Jan-Mar)

For the period January-March 2012, MMDC had no mining or extraction activities due to seasonal heavy

rains in the area. Operations focused on preparatory activities for the beginning of its mining season that

coincides with the relatively drier months of April-November. Preparatory activities consisted primarily

of maintenance operations for the various mountain roads that form part of the haulage network, as

well as the Company’s causeway. Rehabilitation works were also performed on the Company’s fleet of

heavy equipment.

2Q earnings: 136,763,848 (April-Jun)

Drier months of April-November..tuloy operation till 4Q (weather cooperating)

Initial Annual EPS: 0.13

PE 15= 1.95

PE 20=2.6

PE 6.5 (NIKL)= 0.84

Consider that this should not be the real picture since there was no operation on 1Q

A better picture on price appraisal would be practical when we can get 3Q report.

However, we can do some estimation out of their latest disclosure:

Revenue increased 56%

14.2M USD- 9M 2012

9.09m USD-9M 2011 (this was the 381M sales)

Consider that MARC has bought their own transportation equipment mainly to minimize cost..that means more earnings- hopefully

14.2M usd * 40php =568M- 315M (6months ending sales of 2012)

=253M sales for 3Q 2012.

We don’t know the cost but we can estimate

Ratio:

3Q 2011 - 381sales against 203 cost=1.87

2Q 2012- 315 sales against 169 cost= 1.87

Projected earning 3Q 253M/ 1.87

=135M earnings for 3Q

New Annualised earning: 329M/shares

=0.19

PE 10= 1.9

PE 15=2.85

PE 20=3.8

at 2.10/eps 0.13 (2Q 2012) = PE 16
using PE 16 on projected 0.19 Annaul EPS

Target price= 3.07pesos

Projected retained earnings:

306,531,009 + 135M 3Q= 341.5M (1 yr ops)

A must dividend declaration in 4 years time at this pacing. However they can declare when they like...

MARC is now hanging on my wall...you are being framed!

Source:

http://pse.com.ph/resource/corpt/2012/MARC_17Q_Mar2012.pdf

bravorat