http://www.thestar.com.my/business/business-news/2016/12/19/leader-steel-sees-improved-revenue-profit/

By refering to the coverage of the STAR as above link,  why I like Lsteel 9881 are outlined as following:-

1.       According to the STAR paper , the demand of steel pipe and related product is promising, the management spend another 2 million capital expenditure to increase the production line at Sungai Bakap new branch. The new plant has been purchased from Eonmetall initially planning for production of Steel Billets.Outlook market for steel pipe is positive according to MISIF. The new production line shall contribute positively in the coming forth quarter results.

2.       The coming 4^th quarter results shall be getting better and better, due to supply of steel product from China is getting less and less due to safeguard tax. The steel pipe price already surging 30% from it low price now. The management has guarantee the double digit growth in the coming quarter result.

3.       The management is controlling almost 75% of it share by direct or indirectly. Due to liquidity of share in the open market is less, the price can be easily push up and down.

4.       Megasteel is shut down.  Lioncorp is delisted .The safeguard of HRC also rejected. The company can sourcing the HRC  from the international market freely. It is easily saving of RM450 per tone by compulsory sourcing the HRC from megasteel.

5.       Emetall is producing CRC. LSteel and Emetall have same founder . LSteel can source CRC from its own internal company to ensure the cheaper and continuity  supply of raw material for steel bar for furniture steel usage.

6.       Lsteel have 3 factorys  ie in Penang, Klang and Sarawak which scatter strategically all over east and west Malaysia. The network for it product it mainly hardware shop and also scattering all over Malaysia. By obtaining SIRIM recently in Sarawak, it is a synergy effect in increasing the sale and popularity of LSTEEL in Eastern Malaysia. Considering a lot of new projects such as Pan Borneo Highway etc just taking off.

7.       The Theme for market investment for 2016 -2017 will be Steel and its related product. It is mainly due to China cut production and Iron ore price increase and Steel industries being compress and incur losses for so long, the cyclical season is finally back. The China has strong determination in cut production especially in Steel Insdustries considering the air pollution in the country is get worst screnario.

8.   The NTA for LSTEEL is RM1.0, now it is trading 0.4 x of NTA. More potential upside. By complying to KYY golden rule in selection of share, ie current quarter results is getting better than previous results, the share price explosion is getting near.

9. The current climbing USD has boosted the export company such as furniture company. The demand for furniture steel is increasing, this will certainly help to boost the company coming quarter results for sure.

10.   LSTEEL is a very low profile share company. But nowadays, newspaper , Kenanga , The Edge to start to do the coverage for LSTEEL to discover this undervalue GEM. When it is explode, the price will go sky high.

11.   The management keep on buy back his own share up to 1.5% of total share. The management is very confidence of its business and know the market trend very well especially the Founder, they can smell better than a lot of retailers.

12.   The really good news for LSTEEL still not yet emerge, but the price of LSTEEL has been rebound from its low of RM0.15. From budget 2017, government plan to help all small and medium size company by buying the equity. This will help to boost the liquidity and publicity of the company. One of the investing arm -Amanahraya Trustee of PNB have owned LSteel for 14%.

Potential of Share Price Explosion if the following occur :

13.   Malaysian Iron and Steel Industry Federation (MISIF) sees recovery in the iron and steel industry, and better outlook in 2017 amid the current challenging economic condition. The current steel demand in ASEAN has been positive, adding that its demand growth is between 5% and 6% annually. Steel prices will stay normalised in the fourth quarter of this year and have an upward trend in 2017.

14.   Last 3 years, I notice that there is a huge volume of LSTEEL share  traded off market. According to the Bursa record, it is about 15% of total share. This meaning the dealer is starting buying the share during at its all time low. The LSTEEL share and volume and together with the good theme, it is easily for the dealer and investor to push the share price into rocket high.

15.   One of the secret weapon for LSTEEL is trading of iron ore and manganese. The increase and stable price of iron ore will lead LSTEEL to more profitable results in coming quarters. Its contribute nearly 20% of group revenue .The price of iron ore is around USD75 at month of November/December 2016 from it low of USD38.