Target Invest - We Target, We Invest

Author: targetinvest   |   Latest post: Wed, 17 Jul 2019, 12:58 AM


(Target Invest) - King of Steel - Choobee, Is it undervalue enough for you?

Author:   |    Publish date:

In order to be wealthy, one of the way is through investment.

So, do you invest in potential build up story that promises the sky, or invest in solid track record but undervalue company ?
There is no right or wrong in both answer. In the commercial world, both are valid, but comes with different kind of risk. Some get it, some don't get it.
If you are the one that like to invest in company that is well managed and have a good track record, then ChooBee is your choice.
While many are talking about meltdown and crisis, it seems the US market had rebounded from that and had seemingly come back to 25000 again. There are still some bargain hunt on KLSE, and ChooBee is one of them.

Why ChooBee can be your selected picks? Here are the factors
1. Good quality product
Choobee specialized in metal / steel products. From sheets, pipes, wire mesh, as long as it is metal / steel, Choobee does it. But very important is the product quality.
ChooBee product is different from other steel producer in Malaysia due to strict quality control.
Their product is certified for use in Oil and Gas industry, and certified by TUV (High quality standard control by German) which is recognized worldwide.

So that is why Choobee business is resilient albeit the down turn in steel recently. This is because niche product that require strict production control can only be found in Choobee.
2. Recovering oil and gas sector
The recovering oil and gas industry will continue to cushion the demand outlook for Choobee product. For Malaysia, there will be a lot of repair maintenance that is carried out that will require a steel.
This will boost steel industry, especially those that are qualify to supply to this industry.
3. Good result
Every quarter is averaging 7 cents. 3 cumulative quarters with 22.98 cents in EPS.

Expecting the 4th and final quarter will deliver 7 cents, pushing financial year end 2018 EPS at 30 cents.
Valuation at PER x 10, that will value RM 3.00 for Choobee.
Now Choobee is only trading at RM 1.65, almost a 50% discount from price earning value.
4. Undervalue from tangible asset and debt free
Choobee is one of the rare metal producer - debt free. A lot of other metal/steel producer are operating at high debt nature, which will be a disaster for them when economy down turn, demand down turn, or interest rate spike up.
More over, Choobee share price is RM 1.65, which NTA is RM 3.87. That is more than 50% discount from NTA.
With all this good thing in hand, I am invested in Choobee, and will keep invested in it as long as it is under good hands of the management.
This article is for sharing purposes on such a good undervalue company. All investment, please do your own due diligence. This is not a buy sell call for you. 
Share this

Related Stocks

Chart Stock Name Last Change Volume 
CHOOBEE 1.42 0.00 (0.00%)

  Patrick13 likes this.
moneykj Buy Orion and son for q results.
Buy Fitters for mid term.
18/02/2019 8:07 AM
targetinvest Then buy choobee for short term?
18/02/2019 8:32 AM
targetinvest Only 9 more trading days for qr to be released.

Calculated risk gamble... upside swing more than downside
18/02/2019 9:40 AM
ramada Steel counters down.
18/02/2019 7:50 PM
targetinvest Life is a gamble. Some will good some will bad.
This will good or bad nobody know. But so far had been resilient
18/02/2019 10:33 PM
targetinvest Choobee very firm and steady. Not shaken by any perception
19/02/2019 2:41 PM



Top 10 Active Counters
 SCOMNET 0.880.00 
 KOTRA 1.900.00 
 UCREST 0.1350.00 
 PINEAPP 0.330.00 
 PUC 0.0550.00 
 WILLOW 0.420.00 
 IRIS 0.140.00 
 TOPGLOV-C60 0.0550.00 
 BTECH 0.2150.00 
 3A 0.7950.00 
Partners & Brokers