calvintaneng
11428 posts |
 Posted by calvintaneng > Apr 29, 2015 11:35 PM | Report Abuse X
Alex Chan
That is a good question.
Lesson on NTA by Calvin Tan
What is NTA?
NTA Stands for Net Tangible Assets
1) NET tangible assets.
The emphasis is on NET.
To get NET NET you have to get the Sum Total of ALL ASSETS Minus ALL LIABILITIES.
Let's say Mr. Alex own a house worth RM1,000,000. A Merc Benz worth RM250,000 & Other Cash Plus Alll Stuff Worth Another RM250,000
So the Net Assets is RM1.5 millions. Now he has a loan of RM500,000 on the house and also a car loan on the Mercedes for RM100,000
So his Net Net is RM1.5 millions - RM600,000 = RM900,000
That means that Mr. Alex has a Net Net of RM900,000 if the house & car are sold & converted to Cash after paying off all debt.
During the Asian Financial Crisis when house price crashed by 50% & car prices crashed by 70% many are left with Assets below Debt. That means they are under water.
All the Assets if disposed at collapsed value cannot cover debt. That means insolvency & bankruptcy
Question is. Has Masteel any valuable Assets. We will come to that later.
2) net TANGIBLE assets.
The Emphasis here is on the word TANGIBLE. Something you can see with your eyes, touch with your hands. Something visible & Tangible (or touchable). These are REAL STUFF LIKE LANDS, BUILDINGS, MACHINERY OR MOTOR VEHICLES.
3) net tangible ASSETS
Assets are positive. Not liabilities. Assets like Houses & Cars are Real Cash.
Real Cash?
Yes! Cash SOLIDIFICATION.
How?
All of us start in life with a good paying job. Then we buy the first tangible asset like a Perodua Myvi. And after working for some years we buy a house by paying a down payment. (Unless you inherit it)
After a period of many years we finally pay off the loan.
The Cash we used to pay for Car & Housing Loan has NOW TURNED INTO "CASH IN SOLIDIFICATION"
There are convertible to CASH By Selling
The Car is a depreciating asset while the house is an appreciating Asset!
To be continued...
calvintaneng
11428 posts |
Posted by calvintaneng > Apr 29, 2015 07:45 PM | Report Abuse X
Good Evening
It has been 2 days of roller coaster prices for Masteel.
I have been in Masteel on and off for several years already.
These are my personal opinions
Its Salient Factors
1) Masteel is the most profitable Long Steel Players in Malaysia. The other 2 are Southern Steel & Annjoo Steel.
There are 2 Types of Steel Players in Malaysia. Long Steel & Flat Steel
Flat Steel Players are Mycron, Choo Bee & others.
Long Steel is Used In The Manufacture of Beams for MRT Pillars. So The Increase in MRT, LRT, Monorail & High Speed Rail Augur Well for Masteel & Southern Steel. Also the Mushrooming of High Rise Condo & Houses in Iskandar Require Lots of Long Steel. I bought & used long steel bars before in my construction job. They cost between RM2,100 to RM2,200 per ton weight.
Flat Steel, as the name denotes, is used as Refrigerator door, car bonnet, door and booth and all things flat.
2) Steel Companies have high borrowing as a whole. However, Masteel is wise to Give Rights Issue to raise capital. So its gearing is less than all other Steel Players. This is a wise move.
3) As Cost of iron ore has crashed 75% & scrap metal iron also dropped in price Masteel will stand to benefit
4) With the Drop of Ron95 & Diesel Masteel will also save lots of money from transport cost
5) The lower cost of electricity & coal also augur well for Masteel
6) Masteel recently activated a New Steel Mill For Increased Production to meet higher demand from Greater KL Mrt Expansion. This has increased the economy of scale for Masteel. The more you produce the cheaper is your average cost.
7) As Ringgit has crashed against renminbi the incentive to import lower quality cheap steel from China is now neutralized.
Malaysia Steel is of Higher Quality.
8) His Royal Highness The Sultan of Johor has indicated that Forest City of Pendas, Johor will be served by Mono Rail.
This reveals to us that the Masteel-KUB Consortium for Iskandar Rail Net Work might yet proceed some day.
9) The Next Agenda for Malaysia - Spore Win-Win Partnership will be The
HIGH SPEED BULLET TRAIN FROM KL TO SINGAPORE. So Masteel stand to receive increasing orders in coming years.
10) By 21st May 2015 Malaysia Will Announce its Next 5 Year plan for 2016 to 2021. The finality of all finality before Vision 2020 Will Be A WHOPPING RM250 BILLION ALLOTMENT OF MASSIVE PROJECTS. Again Lots of Long Steel will be needed
11) Director has recently exercised 2 million (3/4/2015) Masteel Warrants at the conversion price of 67 cents. They should have 1st Hand Knowledge of the actual status of Masteel Accounts
Let's see. 2 million at 67 cents = RM1.34 Millions.
If Masteel is truly in deep trouble they would not have thrown in TM1.34 millions to convert the warrants. Like many cheating directors (Magan Media for example) they would have dumped all their shares and absconded
So this act indicates hope for the Company.
However, since we still do not have 100% clarity until all is revealed I think you all have to do your own due diligence.
This could be a Great Opportunity to buy in crisis. Or it could also lead to PN17 & prolonged uncertainty.
Please do not blame me if you get into trouble. If you make I won't get a cent. So the decision and responsibility lies with each individual
As for me I have started buying.
Best Regards,
Calvin Tan Research
Now in Booming Iskandar.
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