After I read the article from theedgemarket.com which I have reproduced for investors’ benefit, I have to revise my article. Before weak shareholders start to sell their holdings because Hiap Teck reported reduced profit, they should read this article and the one by theedge.com. 

Hiap Teck just reported PAT Rm 60,484,000 or 4.26 sen for the quarter ending July. Its previous quarter EPS was 4.79 sen, a small reduction despite of 2 month shut down in its factory in Klang and 1 month shut down in its Blast furnace of Eastern Steel plant.

Despite of the 2 months and 1 month shut down, Hiap Teck can still report reasonably good profit.

On a quarter-on-quarter basis, however, net profit shrank 8.25% from RM65.93 million in the third quarter, as revenue dropped 50% from RM329.64 million, arising from lower sales at both the trading and manufacturing divisions due to the imposition of lockdown measures.
 
For the full financial year (FY21), Hiap Teck’s net profit saw a whopping jump to RM163.43 million from RM4.29 million in FY20. Twelve-month revenue rose 15.98% to RM1.08 billion from RM932.87 million.  

“Despite all the challenges, the group recorded its highest profits ever with a profit after tax of RM163.5 million for FY21. Management is also positive on the group’s performance in the coming quarter due to the longer operating period, as the group resumed operations on Aug 16, 2021, the continued strength of steel prices and the expected recovery from the reopening of the economy,” the group said.

You can see the details below.

The reasons why I say Hiap Teck should perform much better in the next few quarters.

Vaccination

The number of people has been vaccinated is increasing very rapidly as shown on the chart below. 72.6% of our population have 1 dose and 62.4% of our population are fully vaccinated.

Covid 19 cases

The number of daily new Covid 19 cases is reducing rapidly as shown on the chart below. On 29 August the number of new daily Covid 19 cases was more than 20,000. Currently the number of daily new Covid 19 cases is about 12,500.   

Based on the rapid increase of vaccination and the rapid reduction of the daily new Covid 19 cases, Hiap Teck factory and Eastern Steel Blast Furnace should be able to perform much better than last financial year. Clever investors with good foresight should be able to foresee that Hiap Teck can make more and more profit in the next few quarters. 

I am obliged to inform you that 80% of my investment portfolio is Hiap Teck and 20% of my investment portfolio is AYS. I am not encouraging you to buy Hiap Teck to push up the share price to make me richer. In any case, the daily average number of shares traded is about 50 million. Whether you buy or sell will not make much difference.