Dear friends of i3 forum,

Last month I picked Sasbadi as a turnaround play

This month is Annjoo Steel

Why Annjoo Steel now of all the Steel Counters in KLSE?

These are some salient factors:

1) ANNJOO STEEL HAS FALLEN TO ATTRACTIVE VALUE OF 44% BELOW NAV

At Rm1.35 with NTA of Rm2.40 Annjoo is now selling at a nice discount of 44% (It was over Rm3.80 at one time)

So now Price is down more than 60% from peak and is considered Low & Cheap with Margin of Safety

2) RECENT PROJECTS AWARDED SHOW SOME DEMAND FOR STEEL

The continuation of TRX, The Pan Borneo Highway & the recent over Rm300 Millions job award for MRCB showed demand for long steel products'

Another strong booster will be the restoration of ECRL (East Coast Rail line to Tumpat in Kelantan

3) In Good Times Anjoo pays good dividends

See

27-Aug-2018	07-Sep-2018	DIVIDEND	Interim Dividend	RM 0.06
23-Feb-2018	19-Apr-2018	DIVIDEND	Interim Dividend	RM 0.13
22-Aug-2017	06-Sep-2017	DIVIDEND	Interim Dividend	RM 0.06
23-Feb-2017	08-May-2017	DIVIDEND	Interim Dividend	RM 0.09

So can expect dividend support if sales continue status quo

4) ANNJOO IS VERY TRANSPARENT

Usual AR will report Top 30 Shareholders. For Annjoo it goes the extra mile to list up to Top 50 Substantial shareholders.

I am happy to note that many Big Foreign Funds are in Top 50 of Annjoo

2 notable ones are Public Mutual Fund & Eastspring Investment Fund

I also saw Eastspring in TMakmur which was taken private.

5) POWERFUL EARNINGS PER SHARE (EPS)

Last 4 Qr were

6.40

3.88

11.88

10.82

Total 32.98 sen

At Rm1.35 Annjoo has a P/E of only 4.09

Now is Annjoo performance sustainable?

See next

6) ANNJOO IS EXPORTING STEEL TO SINGAPORE

According to i3 forum writeup...Among Masteel, Lionind and Southern Steel - Annjoo is the only one that export to Singapore Market

See

Business Background

Ann Joo Resources Bhd is primarily engaged in the manufacturing and trading of steel and steel related products. Business activity of the group is divided into two segments namely Manufacturing and Trading segment. Manufacturing segment consist of manufacturing of iron, steel and steel related products such as billets; mild steel round, angle, round, square, flat, wire rods; and black shafts; and Trading segment is involved in trading of steel products such as carbon steel, stainless steel, hardware products, building and construction materials and it also looks into the operations of steel service centers. Further, the group is also involved in investment holding and property management activity. Geographically, it operates in the region of Malaysia and Singapore.

And why is Singapore so important?

7) HUGE DEMAND FROM SINGAPORE FOR ANNJOO STEEL

Construction demand in Singapore to stay strong, reach up to $32b this year: BCA

JAN 14, 2019, 11:42 AM SGT

SINGAPORE - Construction demand is expected to remain strong this year due to sustained public sector contracts, as the industry continues to recover from a challenging three-year spell.

Total construction demand, which is the value of construction contracts to be awarded, is expected to be between $27 billion and $32 billion this year, despite additional cooling measures in the private property market and the delay in construction of the high-speed rail between Singapore and Kuala Lumpur last year.

Public construction demand, expected to be between $16.5 billion and $19.5 billion this year, is set to make up about 60 per cent of projected demand for the year.

An estimated $30.5 billion in contracts was awarded last year, according to the Building and Construction Authority (BCA). This is in line with the agency's estimate of between $26 billion and $31 billion for last year.

It represents a 23 per cent increase in construction demand compared with the year before, said Mr Zaqy Mohamad, Minister of State for National Development and Manpower, at the BCA-Redas Built Environment and Property Prospects Seminar which was held on Monday (Jan 14) at the Grand Copthorne Waterfront Hotel.

"Many firms have felt the pressure. Construction demand declined for three consecutive years from 2015 to 2017," Mr Zaqy said in a speech at the event, adding that the Government's move to bring forward $1.4 billion in public projects to start between 2017 and early this year has helped firms ride out the downturn.

Public sector demand contributed $18.4 billion last year due to projects such as civil engineering works and institutional buildings. Private sector demand was $12.1 billion, supported by projects such as the redevelopment of en-bloc sites, the sales of which were concluded in 2017 and the first half of last year.

"We have also encouraged government agencies to parcel out large infrastructure projects to create more opportunities for local firms and to diversify risk," said Mr Zaqy.

Total construction demand is estimated to be between $27 billion and $34 billion per year for 2020 and 2021, and between $28 billion and $35 billion per year for 2022 to 2023.

8) NO WONDER INSIDERS ARE BUYING LIKE NO TOMMORROW

DATO' LIM HONG THYE	12-Sep-2018	Acquired	30,000	1.770
DATO' LIM KIAM LAM	06-Sep-2018	Acquired	270,000	1.940
MR LIM SIN SEONG	06-Sep-2018	Acquired	270,000	1.940
DATO' LIM KIAM LAM	05-Sep-2018	Acquired	170,000	1.928
MR LIM SIN SEONG	05-Sep-2018	Acquired	170,000	1.928
DATO' LIM KIAM LAM	03-Sep-2018	Acquired	40,000	1.912
MR LIM SIN SEONG	03-Sep-2018	Acquired	40,000	1.912
DATO' LIM KIAM LAM	12-Jul-2018	Acquired	16,000	1.650
MR LIM SIN SEONG	12-Jul-2018	Acquired	16,000	1.650
DATO' LIM KIAM LAM	11-Jul-2018	Acquired	110,000	1.667

MR LIM SIN SEONG	11-Jul-2018	Acquired	110,000	1.667
DATO' LIM KIAM LAM	10-Jul-2018	Transferred	1,500,000	-
DATO' LIM KIAM LAM	09-Jul-2018	Acquired	240,000	1.673
MR LIM SIN SEONG	09-Jul-2018	Acquired	240,000	1.673
DATO' LIM KIAM LAM	06-Jul-2018	Acquired	45,500	1.738
MR LIM SIN SEONG	06-Jul-2018	Acquired	45,500	1.738
DATO' LIM KIAM LAM	04-Jul-2018	Acquired	180,000	1.800
MR LIM SIN SEONG	04-Jul-2018	Acquired	180,000	1.800
DATO' LIM HONG THYE	04-Jul-2018	Acquired	80,000	1.790
DATO' LIM KIAM LAM	03-Jul-2018	Acquired	35,000	1.844
MR LIM SIN SEONG	03-Jul-2018	Acquired	35,000	1.844
DATO' LIM AUN CHUAN	29-Jun-2018	Transferred	308,000	-
DATO' LIM HONG THYE	29-Jun-2018	Transferred	462,000	-
MR LIM HONG HOCK	29-Jun-2018	Transferred	107,000	-
DATO LIM KIAM LAM	05-Jun-2018	Acquired	110,000	-
LIM SIN SEONG	05-Jun-2018	Acquired	110,000	-
YAM TUNKU NAQUIYUDDIN IBNI TUANKU JA'AFAR	31-May-2018	Acquired	50,000	2.100
YAM TUNKU NAQUIYUDDIN IBNI TUANKU JA'AFAR	30-May-2018	Acquired	50,000	2.048
DATO' LIM HONG THYE	30-May-2018	Acquired	50,000	2.038
DATO LIM KIAM LAM	19-Apr-2018	Others	3,000,000	-
DATO LIM KIAM LAM	19-Apr-2018	Others	3,000,000	-
LIM SIN SEONG	19-Apr-2018	Others	3,000,000	-
LIM SIN SEONG	19-Apr-2018	Others	3,000,000	-
DATO LIM AUN CHUAN	20-Mar-2018	Acquired	50,000	3.300
DATO LIM AUN CHUAN	05-Mar-2018	Acquired	50,000	3.300

Lately some stocks have been force sold at lowest prices. But generally INSIDERS cost are anywhere from Rm1.70 to over Rm3.00

SO AT THIS LOW PRICE OF RM1.35 ANNJOO IS AN OUTRIGHT BUY

BEST REGARDS

Calvin Tan Research

Singapore