Hiap Huat Holdings Berhad had been on a rise on a thin trading margin. The company is in the business of oil recycling and produces refined fuel oil, petrochemical and lubricants, all recycled and purified.

However, is the increase in share price justified? Or it is just a penny stock that is being cooked up by speculators? Let us assess:

1. Refined waste oil is of lower quality than pure refined oil (No matter how many times the waste oil has been refined)

The company has never recorded a utilisation of more than 50% in any of their factories.

Waste oil demand will shrink when oil prices are low.

Huge inventories are held at high value may be subject to write offs and value will diminish significantly.

2. Recent small improve in financial performance may potentially have erors and this might only be known in the annual report announcement

Similar to Ajiya's situation, the company may announce impairment of its inventories, similar to prior year financial year end. This may create shocks to share prices.

Could the slight improvement be cooked up?

3. Incompetent directors with strong self interest

The board of directors composes of:

CEO - Mr Chan Say Hwa (Son of founder Chan Ban Hin), age 38

Executive Director - Ms Chow Pui Ling (Wife of Chan Say Hwa), age 37

Executive Director - Ms Soo Kit Lin (Mother of Mr Chan Say Hwa and wife of Mr Chan Ban Hin)

Non executive director - Mr Wong Kah Ming (CEO of accounting firm Excelton), age 39

Non executive director - Mr Woo Yew Tim (Ex-Financial controller of BIOOSMO, which consistently had their accounts cooked up), age 39

Mr Chan Say Hwa has been studying Masters in Business in Mantissa College (Small and unknown college), Ms Chow Pui Ling has been studying MBA in an unkwnown college. Both has took up their course and spends more time studying, but failing to pass the exam on few occacions.

In fact, Mr Chan Say Hwa was once fined by the Department of Cleaning Malaysia for incorrect business conduct, along with his business partner. This can be verified in the IPO prospectus of HHHCorp.

Ms Soo Kit Lin has a personal venture in Shoppee, is her focus on HHHCorp or doing her make up business in Shoppee? Does not show up to work regularly.

Mr Chan Ban Hin has been selling his share from 20% to 0% and uses all the money to fund his Cameron Highland strawberry business.

He might have also been selling during the share price small rally recently.

4. Is Auto360.my Sdn Bhd a registered subsidiary of Hiap Huat Holdings Berhad? No announcement has ever been made to Bursa Malaysia on the creation of this subsidiary since its creation in 2015.

The marketing manager, Barry Chin, mentioned in 2015 that monetization of HHHCorp will be soon. This never happened. In fact, is this company even registered to HHHCorp?

A visit to HHHCorp's company shows that HHHCorp employees have a conflict of interest as most of their efforts are spent on marketing Auto360.my (Of course it failed), despite this Auto360.my not being registered as a subsidiary of HHHCorp.

Mr Chan Say Hwa holds Auto360.my directly and if this company were to benefit from anything (Unlikely anyway), it will not benefit the shareholders of HHHCorp.