It was a breaking news when UAV Global Public Company Limited (UAC) announced that the company had invested THB 1,000 million in its waste management project to produce renewable energy and process recycled products in Laos for 45 years. UAC planned to book THB 350-400 million in revenue per year and five years of payback period.
The added benefits from this investment were:
1) 6 MW waste power plant (selling to the government)
2) Being able to sell recycled plastic to private companies at 13,200 tonnes/year
3) Being able to sell organic fertilizer to farmers in Laos
The initiation of UAC to penetrate a new business lineup is something new and interesting as there is yet a waste management business in Laos. This advancement is the beginning of expanding “waste-gold mine” for future business.
Looking 7-8 years back, UAC was well-known in “biogas from pig manure” and the development of biogas power plant using napier grass and corn as raw material. It can be said that UAC is the biogas innovator of Thailand.
Currently, the revenue structure of UAC comprise of 60% from trading, 20% from chemical products, and 20% from energy business. The newly acquired waste management will be a major profit for UAC. Thus, the company has set its target to reach THB 3,000 million in revenue by next year.
More importantly, UAC has a constant growth in both revenue and profit. In 2016, UAC recorded THB 1,381 million in revenue with THB 29.64 million of profit. In 2017, the company showed THB 1,659 million in revenue with THB 100.39 million of profit, while reported THB 2,668 million in revenue with THB 139.58 million of profit in 2018.
Which makes UAC’s target of reaching THB 3,000 million in revenue within its reach, and possibly achievable by this year!
As for the share price, UAC’s P/E is lower than 20x from the average previously of 40x. The lower P/E may be partly due to the decline of its share price. However, the increase of EPS is also a major factor for its P/E to record at 15-16x.
For medium-term and long-term investment, the decline of share price is an opportunity for investment, but require a lot of patience as well.
A dividend payment of 4-5% should stir up some interest for investors more or less.