soojinhouI'm taking a closer look at Masteel's report. The unrealized forex loss of 4,622 is most likely the same item as other expenses 4,622. Since it is not part of revenue and cost of sales, it is definitely non-recurring.
YipmanIt's still earning but seller panic selling. just like last quarter. it will rebound soon.
probabilitymarket too high expectation..knee-jerk effect...should not take more than a week for the true effects of the results to surface.
My only concerns is the raw material cost they had used in relative to their product selling price..are they reflective of the future (or just old cheap stocks)..
If they can maintain half of the core operating margin it will be superb already.
moneySIFUAll I can say is the timing of releasing QR by Masteel is terrible.... Lunch time... no time to think & digest.... market reacted......
OOMMGGExclude forex loss, the result is the best Q in a year.
owningAgree with moneysifu, timing of releasing QR is really terrible! From the earning , although the profit not up to expectation, but dont think the market price suppose to drop that much. Afterall, it still come out with better QoQ and YoY. Price will rebound soon...market reacted due to panic selling @@
Billet production capacity: 700,000MT/annum Rolling mill, ~ : 550,000 MT/annum.
Total throughput: 1,250,000MT/annum
If we assume RM150 per ton of steel processed as an average "value addition' per ton of througput of both (this at 5% gross margin on steel price), The Gross profit is = 46 Million per qtr
Since they are taking right from the basic raw material of Scrap - the Safeguard Duty of 13.5% should be theoretically the rock bottom gross margin.
The latest qtr results seem to indicate that they are running at a approximately 40% of max throughput with a gross margin of 10.5%.
"So the current gross profit margin or at the least the absolute gross profit should be sustainable with a better throughput"
They produce the Billets via EAF method which mainly uses Scrap Steel (90%). As mentioned in SS forum earlier, the EAF users will have advantage compared to BOF users who are dependent on Iron Ore and Coking Coal. This will be the competitive advantage factor.
Some reference below ( to prove my message on Scrap Steel users advantage):
Masteel’s improved earnings in 3QFY13 was in stark contrast to the other local steelmakers, all of which reported losses for the period.
We attribute this, in part, to the company’s relatively smaller size and agility in managing its production and stock levels. Its electric arc furnace uses scrap steel as raw material. Scrap steel prices are generally less volatile compared with that of iron ore and coking coal, the main raw materials for larger blast furnaces. Case in point, iron ore prices rose more than scrap steel prices in 3QFY13 due to increased demand from Chinese steelmakers.
investooMasteel poor performance for the quarter is due to forex loss of RM11 miilion, I expect next quarter EPS of at least 6 sen, PE 3.45 at current price.
probabilitywhen new fantastic dishes are constantly being served on the table (till end of the month)...even oysters get abandoned.
many companies reporting fantastic results ma...surely many are eyeing quick short term gains.. they are more concern on latest EPS.
lets see when the waiters stop serving...
probabilityanyone who wants to have a clear understanding on the basic fundamentals of steel processing, you only need to go through the 'single page' on the link below:
culbertlimBetter don't let your people come out and attack other's stock please got one people call CALVINTANENG better call him to shutup stfu and sto attacking GADANG while promoting his super MASTEEL in his blog thank you
calvintanengPosted by culbertlim > Mar 13, 2017 08:44 PM | Report Abuse
Better don't let your people come out and attack other's stock please got one people call CALVINTANENG better call him to shutup stfu and sto attacking GADANG while promoting his super MASTEEL in his blog thank you
investooMalay Contractor Association (PKMM) has written to MITI to protest the safeguard duty on steel bar, says the protection has pushed up the price of steel bar from RM1620 to RM2450. Let see how true is their claim.
According to PKMM, Malaysia Rebar Price increase from Sep 2016 of RM1620 to Mar 2017 of RM2450, an increase of RM830.
During the same period, Rebar Price at international market increase from US$300 (USfirstname.lastname@example.org=RM1240) to US$460 (USemail@example.com=RM2036), an increase of RM796.
From the above calculation, there is no basic to claim that the increase of rebar price in our market is due to the safeguard protection. It's due to price increase at international market and weakening of Ringgit.
Beside there are a lot of quality problem on rebar from China, how are we going to ensure there are no sub-standard rebar produce by the backyard mill from China coming into our market ? Just imagine the consequences if we are using these backyard mill's rebar to build our high rises and bridges..
Most countries have imposed heavy duty on cheap Chinese steel, MITI is doing too little and too late in protecting local steel industry. They should decide what is best for the country and not seccumb to pressure of interest groups.
THE EDGE as a business and investment weekly should do some investigative journalism in their reporting, in their article on steel safeguards, they have failed in the following:
1. To highlight the real reason for the price increase of steel bar on local market from RM1620 to RM2450
2. To provide a balance view on safeguards duty, they omitted view from opposing interest group
3. To report the world practices of safeguards and anti dumping duty on Chinese Steel.
The Edge article has triggered yesterday massive sell down of steel counters, I personally felt that they owe their subscribers and investors who sold out their shares during yesterday meltdown some explanation. In order to rectify their bias reporting, they should present a balance analysis on the havoc created by Chinese steel industry to the world steel market and actions taken by respective countries to protect their national interest in the next publication.
OOMMGGGovernment know better what is the consequence of fully removing of safeguard import duty. If not maintain the current rate of safeguard import duty, some sort of protection must in place to protect local steel industry. This is government resonsibility to ensure survival of local steel industry to continue support local infrastructure building and development of property.
kanterThe damage being done! Is it a conflict of interest of lacking of professionalism ? You judge yourself.!