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Minaean International Corp.(TSX-V: MIB) research and analysis

Contributed by eResearch

By eResearch

Minaean International Corp. (“Minaean” or the “Company”) was incorporated in Alberta in 1998. The Company is focused on housing and infrastructure development primarily in India and, to a lesser degree, in the USA. With its trademarked products “Vesta Quik-Build” and “Artisan Quik- Build”, the Company supplies and builds modular building and furniture for a fast-growing Indian residential market.

INVESTMENT CONSIDERATIONS

Strengths

India offers a good opportunity for Minaean’s business expansion: the country is the world’s 7th largest economy with nearly 1.1 billion in population and a recent 7%-8% GDP growth. There is high demand for quick-build and innovative technologies due to a substantial housing shortfall (estimated at 25 million units).

The Company’s products are based on light gauge steel, easy to install, expandable in the future, and easy to be relocated. Modular buildings are prefabricated and assembled in the Company’s own factories and are installed on site, which reduces costs.

Challenges

The business is cyclical and competitive. There are many competitors, most of which have stronger financial resources.

The Company must overcome its challenging financila situation. Debt levels are high ($2.86 million); cash flow has been negative since the Company’s inception; and shareholders’ equity is negative with recurrent net losses.

HIGHLIGHTS

The Company’s primary objective is to market light gauge steel building construction technologies and products that improve efficiencies and lower costs.

The Company has received new orders reflecting: (1) the strength of demand for low-cost housing in India; and (2) the reliability of the Company’s products and services

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Although its major market is India, the Company incorporated Minaean Power Structure (USA) Inc. (“MPS”) in 2005 to expand its operations into the USA. MPS’s current focus is on erecting 4-8 storey buildings in Oregon and Washington states.

MPS completed a project in Vancouver, B.C.: a 4-storey development consisting of two 2,750 sq. ft. commercial units and 16 residential units.

PRODUCTS

1. Modular Quik-Build:

 - Uses general steel framing method.

 - All works (electrical and insulation) are completed in factory.

 - Modules are then shipped to site and installed.

2. Vesta Quik-Build:

 - Uses cold-formed steel to produce wall panels and concrete fibre boards.

 - Designed for rapid distribution of housing construction kits to developing countries at low costs.

3. Artisan Quik-Build:

 - Uses thin sheets of galvanized steel to form steel studs for framing in residential and commercial construction.

 - Steel stud walls are pre-engineered and fabricated to design specification in factory and shipped to the site and installed.

CONTRACTS (Since April 1, 2009)

(1) Modular Quik-Build

Retail Outlets:

 - Completed 5 gas station retail buildings between April and August 2009 for Shell Marketing Pvt Limited, India. An additional 8 gas stations were awarded and completed in December 2009.

 - Received a purchase order valued at C$200,000 for supply and installation from Indian Oil Corporation Limited.

 - Supplied and installed 2 two-storey modular gas station buildings for Bharat Petroleum Corporation Limited and further orders are under negotiation.

Bus Queue Shelter/Street Furniture:

 - Awarded an order for a total of 75 units of steel bus queue shelters in Bangalore and received a purchase order for 13 bus queue shelters and 112 units of modular bins in Lavasa, having a total value of C$210,000.

ATMs:

 - Received 12 ATM kiosks from State Bank and other banks across India.

 - Secured a purchase order for 27 new ATMs in Gujarat, valued at C$220,000.

 - Received a purchase order from Axis Bank for 1 ATM in Mumbai.

(2) Artisan Quik-Build

 - Secured a contract for the turnkey design and construction for the hostel and library in Valsad, valued at C$1.04 million.

 - In North America, a proposed contract of US$1.65 million is expected soon for a housing complex in Portland.

 - Received a letter of intent from Palm Hotel for the development of a four-storey hotel in Grenada.

KEY INFRASTRUCTURE SECTORS

 - India is expected to invest US$345 billion in infrastructure over the next several years in oil and gas, power, roads, ports, airports, railroads, urban infrastructure, and telecom.

 - This presents good opportunities for growth for Minaean.

 - Rapid growth in infrastructure in the past year (power 60%, road 100%, airport 400%, ports 160%, and railway 250%) emphasizes the strong demand for the Company’s products.

OUTLOOK

India has an aggressive plan for investment in infrastructure with US$65 billion planned for 2010.

The Company has completed most of the contracts for production and installation of 300 bus queue shelters for Mumbai City and is negotiating a new contract with the city.

Shell Petroleum re-entered the Indian market in 2005 with a licence to set up 2,000 gas stations. This has generated orders for the Company, which has become a preferred contractor for Shell.

The Company has successfully completed the Valsad hospital project and is a leading contender for execution using its Quik- Build light gauge steel buildings.