Kingfa Science & Technology (India) Ltd - The biggest proxy to EV revolution in making?
A thread ๐งต๐
A thread ๐งต๐
About the company
Kingfa is a leading manufacturer and supplier of high quality Reinforced Polypropylene Compounds,Thermoplastics Elastomers, Fibre Re-Inforced composites and all engineering plastics.
Kingfa is a leading manufacturer and supplier of high quality Reinforced Polypropylene Compounds,Thermoplastics Elastomers, Fibre Re-Inforced composites and all engineering plastics.
Financials (Last five years)
SALES
2016 : 314 crs
2017 : 427 crs
2018 : 602 crs
2019 : 702 crs
2020 : 742 crs
PAT
2016 : 11 crs
2017 : 12 crs
2018 : 25 crs
2019 : 19 crs
2020 : 25 crs
CWIP
2016 : 41 crs
2017 : 10 crs
2108 : 02 crs
2019 : 79 crs
2020 : 115 crs
SALES
2016 : 314 crs
2017 : 427 crs
2018 : 602 crs
2019 : 702 crs
2020 : 742 crs
PAT
2016 : 11 crs
2017 : 12 crs
2018 : 25 crs
2019 : 19 crs
2020 : 25 crs
CWIP
2016 : 41 crs
2017 : 10 crs
2108 : 02 crs
2019 : 79 crs
2020 : 115 crs
Forex Losses
Company has suffered huge Forex losses earlier on account of unpredictability on exchange rate as they imports majority of their Raw materials (RM). Still somehow they managed to stay in Profit.
Company has suffered huge Forex losses earlier on account of unpredictability on exchange rate as they imports majority of their Raw materials (RM). Still somehow they managed to stay in Profit.
Automobile Slowdown
The auto sector contributes nearly 80% to the kingfa's revenue. As we seen in FY20 was bad for the entire auto industry where the overall production come down by around 15% yet kingfa has able to grow and sustain it's topline even in such bad market.
The auto sector contributes nearly 80% to the kingfa's revenue. As we seen in FY20 was bad for the entire auto industry where the overall production come down by around 15% yet kingfa has able to grow and sustain it's topline even in such bad market.
Total Market Share
The companyโs current market share for auto in India is 24%. In a couple of years, it has a target of winning over 50% market share. This would help them to be the Market leader and the cheapest cost producer in India.
The companyโs current market share for auto in India is 24%. In a couple of years, it has a target of winning over 50% market share. This would help them to be the Market leader and the cheapest cost producer in India.
Revenue Mix
Currently, around 80% revenue comes from auto segment and another 20% from non-auto segment. This mix may be revised to 60:40 (auto and non-auto) in next few years. This is going to minimize the risk and would help them in diversifying.
Currently, around 80% revenue comes from auto segment and another 20% from non-auto segment. This mix may be revised to 60:40 (auto and non-auto) in next few years. This is going to minimize the risk and would help them in diversifying.
Key Focus Area
The company's key focus and objective continues to be the growth by aggressively pursuing all the opportunities. The company going forward will also be focusing on the Engineering Plastics (EP) and improve margins.
The company's key focus and objective continues to be the growth by aggressively pursuing all the opportunities. The company going forward will also be focusing on the Engineering Plastics (EP) and improve margins.
Engineering Plastic Market size
The Engineering Plastic (EP) has huge potential in India. The total engineered plastic market in India is 50 KT and currently Kingfa India sells 3-4 KT out of that.
The Engineering Plastic (EP) has huge potential in India. The total engineered plastic market in India is 50 KT and currently Kingfa India sells 3-4 KT out of that.
EV Proxy
The EV revolution would be the biggest beneficiary to Kingfa India.
Was speaking to one of my closest Mentor and he said, "What's 1x in normal demand for kingfa in auto segment would be 3x the demand for Kingfa in EV segment.
The EV revolution would be the biggest beneficiary to Kingfa India.
Was speaking to one of my closest Mentor and he said, "What's 1x in normal demand for kingfa in auto segment would be 3x the demand for Kingfa in EV segment.
EV Proxy (Contd.)
Also, Kingfa China supplies to Tesla in china and in US. If Tesla makes a start in India, it's obvious Kingfa India would supply to it."
This makes Kingfa an interesting bet for the EV theme.
Also, Kingfa China supplies to Tesla in china and in US. If Tesla makes a start in India, it's obvious Kingfa India would supply to it."
This makes Kingfa an interesting bet for the EV theme.
Two Steps Ahead
The company has successfully able to build capacity ahead of the growth curve so that they have the capacity to fully capture the growth opportunity.
This indicates that the company is thinking two steps ahead of it's competitors.
The company has successfully able to build capacity ahead of the growth curve so that they have the capacity to fully capture the growth opportunity.
This indicates that the company is thinking two steps ahead of it's competitors.
(Contd.)
The company is also investing heavily in people, technology, & capacity ahead of the demand curve
They said in a statement, "We are supremely confident that this objective would put us in the right place to fully capitalise & upswing in Manufacturing growth in India"
The company is also investing heavily in people, technology, & capacity ahead of the demand curve
They said in a statement, "We are supremely confident that this objective would put us in the right place to fully capitalise & upswing in Manufacturing growth in India"
Proxy to Manufacturing Theme
Few weeks ago was speaking to one of my another Mentor
He said, "Manufacturing moving out from china and going else where WILL bring mother of all Manufacturing bull run. Companies whose capacities are under utilised will be the biggest beneficiary"
Few weeks ago was speaking to one of my another Mentor
He said, "Manufacturing moving out from china and going else where WILL bring mother of all Manufacturing bull run. Companies whose capacities are under utilised will be the biggest beneficiary"
Scuttlebutt Update
The co's capacity is going to increase upto 4 lakh tonnes which will give them like 5000 crs revenues going forward. The realisation which is at 105 per Kg would increase to Rs 140-150 per kg, once the value added high margin products chip in from Chakan plant
The co's capacity is going to increase upto 4 lakh tonnes which will give them like 5000 crs revenues going forward. The realisation which is at 105 per Kg would increase to Rs 140-150 per kg, once the value added high margin products chip in from Chakan plant
New Chakan Plant Update
The co's new global Scale Manufacturing center has latest facilities for new products development & would enable the company to develop materials & formulations within a short period. The newly setup facility has already started it's commercial production
The co's new global Scale Manufacturing center has latest facilities for new products development & would enable the company to develop materials & formulations within a short period. The newly setup facility has already started it's commercial production
New Development
The company has established a robust supply chain team and IT enabled process to manage the entire order to delivery process which is a key to managing larger capacities and multiple production lines in the coming years.
The company has established a robust supply chain team and IT enabled process to manage the entire order to delivery process which is a key to managing larger capacities and multiple production lines in the coming years.
Overseas Market Potential
They seems to understand the potential for biz in overseas market. They started to relocate their front end team at overseas locations to give them exposure to overseas market. This is also essential for utilising the enhanced capacity they have built.
They seems to understand the potential for biz in overseas market. They started to relocate their front end team at overseas locations to give them exposure to overseas market. This is also essential for utilising the enhanced capacity they have built.
Foray into Construction Industry
The company has also become a major supplier to the construction industry by successfully developing the right materials for the same.
The company has also become a major supplier to the construction industry by successfully developing the right materials for the same.
Foray into Health and Sanitation
The company has also successfully developed a special compound called 'Melt Blown PP' to cater to the health sector for making masks and sanitary items. The need for personal protective equipment is on the rise with COVID-19 threatening the world
The company has also successfully developed a special compound called 'Melt Blown PP' to cater to the health sector for making masks and sanitary items. The need for personal protective equipment is on the rise with COVID-19 threatening the world
(Contd.)
The co's 'Melt Blown PP compound' will be a key ingredient for the manufacture of filtering layer that forms part of the masks to make them effective against infection.
The cloth mask do not offer protection as the cloth layer cannot filter the germs.
The co's 'Melt Blown PP compound' will be a key ingredient for the manufacture of filtering layer that forms part of the masks to make them effective against infection.
The cloth mask do not offer protection as the cloth layer cannot filter the germs.
Mask Division Update
The Company is expected to fetch around 50 Crores Topline and 10 crores bottomline from their mask division alone in the next Financial year.
The Company is expected to fetch around 50 Crores Topline and 10 crores bottomline from their mask division alone in the next Financial year.
Tie-up with New automobile Brands
Kingfa has been successfully able to get new business from all the new entities that have set up manufacturing recently. This has offered a big opportunity for the company to benefit from their new requirement.
Kingfa has been successfully able to get new business from all the new entities that have set up manufacturing recently. This has offered a big opportunity for the company to benefit from their new requirement.
Tie-up with new appliances brands
The company has also partnered with all the new brands from abroad entering into Indian space in the appliances segment. The company will play a key role as a suppliers to their materials needs.
The company has also partnered with all the new brands from abroad entering into Indian space in the appliances segment. The company will play a key role as a suppliers to their materials needs.
Partnered with IKEA
The company has entered into furniture market through IKEA, as the sales of IKEA grows it will have benefits. IKEA raw materials requirement is unique and they got approval for the said. It also has many products in wood and metal replacement category.
The company has entered into furniture market through IKEA, as the sales of IKEA grows it will have benefits. IKEA raw materials requirement is unique and they got approval for the said. It also has many products in wood and metal replacement category.
Chinese Parent Support
Kingfa China is a 75000 crore company in China. They owns 75% stake in kingfa India. The technical know-how and expertise of the parent company will help the Indian baby to go at a fast pace.
Kingfa China is a 75000 crore company in China. They owns 75% stake in kingfa India. The technical know-how and expertise of the parent company will help the Indian baby to go at a fast pace.
Impact of Anti-China Sentiment
There's been talk of anti-china issues and how operationally this will impact Chinese companies.
Firstly, please be aware that kingfa India is an Indian company manufacturing everything in India through Indian labours with a Chinese Parent.
There's been talk of anti-china issues and how operationally this will impact Chinese companies.
Firstly, please be aware that kingfa India is an Indian company manufacturing everything in India through Indian labours with a Chinese Parent.
(Contd.)
Secondly, It caters to B2B from Maruti to Hyundai to every big names in the industry, who doesn't care about all this but anything which can help them to save costs and become more efficient.
Secondly, It caters to B2B from Maruti to Hyundai to every big names in the industry, who doesn't care about all this but anything which can help them to save costs and become more efficient.
Parent plans in India
Kingfa China planning to strategically shift some export business from China to India.
All their products will be slowly produced in Chakan plant. They are planning to make Kingfa India a global export hub for kingfa Group.
Kingfa China planning to strategically shift some export business from China to India.
All their products will be slowly produced in Chakan plant. They are planning to make Kingfa India a global export hub for kingfa Group.
(Contd.)
The global Parent is very high on its Indian Baby. The parent does around 30,000 crores sales and guided of selling each and every kingfa China products in India. Also, China and US concerns are also creating a long term strategic push for such a move
The global Parent is very high on its Indian Baby. The parent does around 30,000 crores sales and guided of selling each and every kingfa China products in India. Also, China and US concerns are also creating a long term strategic push for such a move
Recognition Award
The company has received the award of Best Supplier - Resin 2019 by SMRC Automotive products.
The company has received the award of Best Supplier - Resin 2019 by SMRC Automotive products.
Conclusion
The Parent company seems to be very aggressive and hunger for growth. They have grown at a CAGR of 25% over the last 25 years
I won't be surprised if they replicate the same in India as well. The company has got a dynamic promoter who knows his stuff pretty well.
The Parent company seems to be very aggressive and hunger for growth. They have grown at a CAGR of 25% over the last 25 years
I won't be surprised if they replicate the same in India as well. The company has got a dynamic promoter who knows his stuff pretty well.
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