Golden Son Limited (GSL) yesterday emerged as the top market leader at Dhaka Stock Exchange.
Its turnover valued more than Tk23 crore was changed hands, making up 6% of the total DSE turnover.
On the day, its stock prices rose 2.35% to Tk65.6 each before rising as high as Tk65.9 and falling as low as Tk64 during the trading hour. The company’s face value is Tk10 each.
The stocks registered a gain of more than 36% during the past four weeks.
Stock brokers say recent disclosure by the company on building a toy-manufacturing factory drove the current stock to 52-week high.
Earlier, the company has obtained a positive credit rating from Credit Rating Agency of Bangladesh Limited (CRAB).
The company obtained a rating of “AA3” based on audited, unaudited financial statements and bank liability up to September 2013.
Diversifying business model
On December 22, the company announced that it has already approved to set up a toy-manufacturing factory in its premises in Chittagong by its subsidiary, GSL Export Limited. The subsidy was previously known as M/S GSL Dyeing Limited but changed according to a company disclosure on September 2, 2013.
The Bangladesh-Taiwan joint venture company has signed a memorandum of understanding with Stephen Christenson, a German industrialist and businessman, to commence production by April next year.
The fully export oriented toy-manufacturing venture came to existence only after Stephen decided to shift his business to Bangladesh. He said recent increases in labour and production costs in Latvia and China drove them to Bangladesh for availing better resources at a lower expense.
Under the agreement, Christenson will own 50%, Golden Son will own 40%, and GSL managing director, Belal Ahmed will own 10% stakes in GSL Export Limited.
GSL Export has taken over a floor space of more than4,645 square metres from Golden Son to set up the factory.
The new produce line will be in addition to the existing factory premises.
Currently, the GSL makes an array of products: CPU casing, LED light, aerosols, household items, perfumes, body sprays, air-fresheners, garment accessories, sporting toys, fans, fan accessories, and garment accessories.
“I formed the GSL Export Ltd a long time ago, to explore a new business for a better diversification in order to lower business risks, but political uncertainty delayed the overall process,” Belal Ahmed, managing director of GSL, told the Dhaka Tribune earlier.
Company financials
An increase in the cost of sales along with a decrease in non-operating income has resulted in lower profits both in the third quarter and the first nine months of the current year.
The company’s sales stood at Tk139.5 crore in the first nine months of the current year against Tk130.8 crore in the same period last year.
According to its unaudited half-yearly reports, the company has reported an increase of Tk6 crore in its cost of sales that was mainly due to un-proportional increase in raw materials than in sales. In addition the cost of factory overhead has also increased by Tk1.3 crore within a year.
Increase in expenses has lowered the recent quarterly profit despite higher sales.
The GSL’s third quarter (July-September) net profit was Tk9.3 crore against Tk12.3 crore in the same period a year earlier. Its nine months (January-September) profit has declined to Tk30.6 crore from Tk39.7 crore in the corresponding period a year ago.
According to its latest unaudited reports, the company listed under the engineering segment at the bourses has earnings per share of Tk2.51 each and a price to earnings ratio of 19.6 as of yesterday.
The company has net asset value of Tk28.69 as of 2012.
Currently the sponsors hold 45.29%, general public 33.71% and institutional investors rest stakes of the company.
