Oil Prices Should Fall, Possibly Hard 07 Mar 16


Oil prices should fall, possibly hard, in coming weeks. That is because fundamentals do not support the present price.

Prices should fall to around $30 once the empty nature of an OPEC-plus-Russia production freeze is understood. A return to the grim reality of over-supply and the weakness of the world economy could push prices well into the $20s.

Saudi Arabia's Minister of Petroleum & Mineral Resources Ali Al-Naimi speaks at the annual IHS CERAWeek global energy conference Tuesday, Feb. 23, 2016, in Houston. (AP Photo/Pat Sullivan)
Saudi Arabia’s Minister of Petroleum & Mineral Resources Ali Al-Naimi speaks at the annual IHS CERAWeek global energy conference Tuesday, Feb. 23, 2016, in Houston. (AP Photo/Pat Sullivan)

A Production Freeze Will Not Reduce The Supply Surplus

An OPEC-plus-Russia production cut would be a great step toward re-establishing oil-market balance. I believe that will happen later in 2016 but is not on the table today.

In late February, Saudi oil minister Ali Al-Naimi stated categorically, “There is no sense in wasting our time in seeking production cuts. That will not happen.”

Instead, Russia and Saudi Arabia have apparently agreed to a production freeze. This is meaningless theater but it helped lift oil prices 37% from just more than $26 in mid-February to almost $36 per barrel last week. That is a lot of added revenue for Saudi Arabia and Russia but it will do nothing to balance the over-supplied world oil market.

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The problem is that neither Saudi Arabia nor Russia has greatly increased production since the oil-price collapse began in 2014 (Figure 1). A freeze by those countries, therefore, will only ensure that the supply surplus will not get worse because of them. It is, moreover, doubtful that Saudi Arabia or Russia have the spare capacity to increase production much beyond present levels making the proposal of a freeze cynical rather than helpful.

Chart-US-RUSSIA-SAUDI Incremental Prod MAR 2016
Figure 1. Incremental liquids production since January 2014 by the United States plus Canada, Iraq, Saudi Arabia and Russia. Source: EIA & Labyrinth Consulting Services, Inc. (click image to enlarge)

Saudi Arabia and Russia are two of the world’s largest oil-producing countries. Yet in January 2016, Saudi liquids output was only ~110,000 bpd more than in January 2014 and Russia was actually producing ~50,000 bpd less than in January 2014. The present world production surplus is more than 2 mmbpd.

By contrast, the U.S. plus Canada are producing ~1.9 mmbpd more than in January 2014 and Iraq’s crude oil production has increased ~1.7 mmbpd. Also, Iran has potential to increase its production by as much as ~1 mmbpd during 2016. Yet, none of these countries have agreed to the production freeze. Iran, in fact, called the idea “ridiculous.”

Growing Storage Means Lower Oil Prices

U.S. crude oil stocks increased by a remarkable 10.4 mmb in the week ending February 26, the largest addition since early April 2015. That brought inventories to an astonishing 162 mmb more than the 2010-2014 average and 74 mmb above the bloated levels of 2015 (Figure 2).

Crude Oil Stocks_5-Year AVG MIN MAX 6 FEB 2016
Figure 2. U.S. crude oil stocks. Source: EIA and Labyrinth Consulting Services, Inc. (click image to enlarge)

The correlation between U.S. crude oil stocks and world oil prices is strong. Tank farms at Cushing, Oklahoma (PADD 2) and storage facilities in the Gulf Coast region (PADD 3) account for almost 70% of total U.S. storage and are critical in WTI price formation. When storage exceeds about 80% of capacity, oil prices generally fall hard. Current Cushing storage is at 91% of capacity, the Gulf Coast is at 87% and combined, they are at a whopping 88% of capacity (Figure 3).

Cushing & Gulf Coast Inventory & Utilization 6 Feb 2016
Figure 3. Cushing and Gulf Coast crude oil storage. Source: EIA and Labyrinth Consulting Services, Inc. (click image to enlarge)

Prices have fallen hard in step with growing storage throughout 2015 and early 2016. Since talk of a production freeze first surfaced, however, intoxicated investors have ignored storage builds and traders are testing new thresholds before they fall again.

The truth is that prices will not increase sustainably until storage volumes fall, and that cannot happen until U.S. production

Oil Prices Should Fall, Possibly Hard 07 Mar 16


Oil prices should fall, possibly hard, in coming weeks. That is because fundamentals do not support the present price.

Prices should fall to around $30 once the empty nature of an OPEC-plus-Russia production freeze is understood. A return to the grim reality of over-supply and the weakness of the world economy could push prices well into the $20s.

Saudi Arabia's Minister of Petroleum & Mineral Resources Ali Al-Naimi speaks at the annual IHS CERAWeek global energy conference Tuesday, Feb. 23, 2016, in Houston. (AP Photo/Pat Sullivan)
Saudi Arabia’s Minister of Petroleum & Mineral Resources Ali Al-Naimi speaks at the annual IHS CERAWeek global energy conference Tuesday, Feb. 23, 2016, in Houston. (AP Photo/Pat Sullivan)

A Production Freeze Will Not Reduce The Supply Surplus

An OPEC-plus-Russia production cut would be a great step toward re-establishing oil-market balance. I believe that will happen later in 2016 but is not on the table today.

In late February, Saudi oil minister Ali Al-Naimi stated categorically, “There is no sense in wasting our time in seeking production cuts. That will not happen.”

Instead, Russia and Saudi Arabia have apparently agreed to a production freeze. This is meaningless theater but it helped lift oil prices 37% from just more than $26 in mid-February to almost $36 per barrel last week. That is a lot of added revenue for Saudi Arabia and Russia but it will do nothing to balance the over-supplied world oil market.

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The problem is that neither Saudi Arabia nor Russia has greatly increased production since the oil-price collapse began in 2014 (Figure 1). A freeze by those countries, therefore, will only ensure that the supply surplus will not get worse because of them. It is, moreover, doubtful that Saudi Arabia or Russia have the spare capacity to increase production much beyond present levels making the proposal of a freeze cynical rather than helpful.

Chart-US-RUSSIA-SAUDI Incremental Prod MAR 2016
Figure 1. Incremental liquids production since January 2014 by the United States plus Canada, Iraq, Saudi Arabia and Russia. Source: EIA & Labyrinth Consulting Services, Inc. (click image to enlarge)

Saudi Arabia and Russia are two of the world’s largest oil-producing countries. Yet in January 2016, Saudi liquids output was only ~110,000 bpd more than in January 2014 and Russia was actually producing ~50,000 bpd less than in January 2014. The present world production surplus is more than 2 mmbpd.

By contrast, the U.S. plus Canada are producing ~1.9 mmbpd more than in January 2014 and Iraq’s crude oil production has increased ~1.7 mmbpd. Also, Iran has potential to increase its production by as much as ~1 mmbpd during 2016. Yet, none of these countries have agreed to the production freeze. Iran, in fact, called the idea “ridiculous.”

Growing Storage Means Lower Oil Prices

U.S. crude oil stocks increased by a remarkable 10.4 mmb in the week ending February 26, the largest addition since early April 2015. That brought inventories to an astonishing 162 mmb more than the 2010-2014 average and 74 mmb above the bloated levels of 2015 (Figure 2).

Crude Oil Stocks_5-Year AVG MIN MAX 6 FEB 2016
Figure 2. U.S. crude oil stocks. Source: EIA and Labyrinth Consulting Services, Inc. (click image to enlarge)

The correlation between U.S. crude oil stocks and world oil prices is strong. Tank farms at Cushing, Oklahoma (PADD 2) and storage facilities in the Gulf Coast region (PADD 3) account for almost 70% of total U.S. storage and are critical in WTI price formation. When storage exceeds about 80% of capacity, oil prices generally fall hard. Current Cushing storage is at 91% of capacity, the Gulf Coast is at 87% and combined, they are at a whopping 88% of capacity (Figure 3).

Cushing & Gulf Coast Inventory & Utilization 6 Feb 2016
Figure 3. Cushing and Gulf Coast crude oil storage. Source: EIA and Labyrinth Consulting Services, Inc. (click image to enlarge)

Prices have fallen hard in step with growing storage throughout 2015 and early 2016. Since talk of a production freeze first surfaced, however, intoxicated investors have ignored storage builds and traders are testing new thresholds before they fall again.

The truth is that prices will not increase sustainably until storage volumes fall, and that cannot happen until U.S. production

Oil Prices Should Fall, Possibly Hard 07 Mar 16


Oil prices should fall, possibly hard, in coming weeks. That is because fundamentals do not support the present price.

Prices should fall to around $30 once the empty nature of an OPEC-plus-Russia production freeze is understood. A return to the grim reality of over-supply and the weakness of the world economy could push prices well into the $20s.

Saudi Arabia's Minister of Petroleum & Mineral Resources Ali Al-Naimi speaks at the annual IHS CERAWeek global energy conference Tuesday, Feb. 23, 2016, in Houston. (AP Photo/Pat Sullivan)
Saudi Arabia’s Minister of Petroleum & Mineral Resources Ali Al-Naimi speaks at the annual IHS CERAWeek global energy conference Tuesday, Feb. 23, 2016, in Houston. (AP Photo/Pat Sullivan)

A Production Freeze Will Not Reduce The Supply Surplus

An OPEC-plus-Russia production cut would be a great step toward re-establishing oil-market balance. I believe that will happen later in 2016 but is not on the table today.

In late February, Saudi oil minister Ali Al-Naimi stated categorically, “There is no sense in wasting our time in seeking production cuts. That will not happen.”

Instead, Russia and Saudi Arabia have apparently agreed to a production freeze. This is meaningless theater but it helped lift oil prices 37% from just more than $26 in mid-February to almost $36 per barrel last week. That is a lot of added revenue for Saudi Arabia and Russia but it will do nothing to balance the over-supplied world oil market.

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The problem is that neither Saudi Arabia nor Russia has greatly increased production since the oil-price collapse began in 2014 (Figure 1). A freeze by those countries, therefore, will only ensure that the supply surplus will not get worse because of them. It is, moreover, doubtful that Saudi Arabia or Russia have the spare capacity to increase production much beyond present levels making the proposal of a freeze cynical rather than helpful.

Chart-US-RUSSIA-SAUDI Incremental Prod MAR 2016
Figure 1. Incremental liquids production since January 2014 by the United States plus Canada, Iraq, Saudi Arabia and Russia. Source: EIA & Labyrinth Consulting Services, Inc. (click image to enlarge)

Saudi Arabia and Russia are two of the world’s largest oil-producing countries. Yet in January 2016, Saudi liquids output was only ~110,000 bpd more than in January 2014 and Russia was actually producing ~50,000 bpd less than in January 2014. The present world production surplus is more than 2 mmbpd.

By contrast, the U.S. plus Canada are producing ~1.9 mmbpd more than in January 2014 and Iraq’s crude oil production has increased ~1.7 mmbpd. Also, Iran has potential to increase its production by as much as ~1 mmbpd during 2016. Yet, none of these countries have agreed to the production freeze. Iran, in fact, called the idea “ridiculous.”

Growing Storage Means Lower Oil Prices

U.S. crude oil stocks increased by a remarkable 10.4 mmb in the week ending February 26, the largest addition since early April 2015. That brought inventories to an astonishing 162 mmb more than the 2010-2014 average and 74 mmb above the bloated levels of 2015 (Figure 2).

Crude Oil Stocks_5-Year AVG MIN MAX 6 FEB 2016
Figure 2. U.S. crude oil stocks. Source: EIA and Labyrinth Consulting Services, Inc. (click image to enlarge)

The correlation between U.S. crude oil stocks and world oil prices is strong. Tank farms at Cushing, Oklahoma (PADD 2) and storage facilities in the Gulf Coast region (PADD 3) account for almost 70% of total U.S. storage and are critical in WTI price formation. When storage exceeds about 80% of capacity, oil prices generally fall hard. Current Cushing storage is at 91% of capacity, the Gulf Coast is at 87% and combined, they are at a whopping 88% of capacity (Figure 3).

Cushing & Gulf Coast Inventory & Utilization 6 Feb 2016
Figure 3. Cushing and Gulf Coast crude oil storage. Source: EIA and Labyrinth Consulting Services, Inc. (click image to enlarge)

Prices have fallen hard in step with growing storage throughout 2015 and early 2016. Since talk of a production freeze first surfaced, however, intoxicated investors have ignored storage builds and traders are testing new thresholds before they fall again.

The truth is that prices will not increase sustainably until storage volumes fall, and that cannot happen until U.S. production

aax coming down soon.. oil price keep going up

if it is not him, who is selling so heavily

uncle koon sell like crazy... he is a big goreng person.. say the stock very good. when the directors don't agree to come out with share split, he is stuck. then he quickly sell his shares.

Quote from you:

Faye Tan..

I am saying what my buy and what my sell is... not what i ask u to buy or what i ask u to sell.

You are really cheating yourself!

Your main title. "SELL all export theme counters, TIME to BUY OIL & GAS."

Are you not asking people to sell all the export stocks?

Are you not asking people to buy oil and gas stocks?

And you list out that you have bought SKPETRO. If you don't have to wish to promote this counter, why put it up. Just keep it to yourself la..

friends, even if oil price up..

i think will be ard USD 40. New competitor like the shale oil companies are great impact to oil price.

Some more Iran and Iraq is pumping more oil. Cos they want to snatch the market shares.

Even so i dun think export stocks should drop by 30%. That's over and too much.

usd vs myr go back to 3.00?

friends, tell me how much usd vs myr you expect will be in 6 mths to 1 year time?

i dun understand why most export stocks drop but superln didn't drop

friends... latitude drop from RM 8.00 to RM 5.70, but if you realistically and logically think about it.. USD VS MYR only from 4.30 to 4.07. A 30% drop vs 5% drop.

It is almost like USD vs MYR go back to 3.00.

Do you think that is possible?

it is definitely uncle koon selling...

already drop near to nta RM 5.10

taann bonus issue 5 for 1 !

at least half of the 30 largest shareholders are funds

30 Largest Shareholders as at 16 November 2015

No. Name No. of Shares %

1 KENANGA NOMINEES (ASING) SDN BHD
JUBILEE INDUSTRIES HOLDINGS LTD (023)
18,872,616 9.8112

2 MAYBANK NOMINEES (ASING) SDN BHD
PLEDGED SECURITIES ACCOUNT FOR TERENCE TEA YEOK KIAN
10,000,000 5.1986

3 MAYBANK NOMINESS (TEMPATAN) SDN BHD
PLEDGED SECURITIES ACCOUNT FOR KANG PANG KIANG
8,000,000 4.1589

4 KENANGA NOMINEES (TEMPATAN) SDN BHD
PLEDGED SECURITIES ACCOUNT FOR KOON YEW YIN (002)
4,500,000 2.3394

5 MAYBANK NOMINEES (ASING) SDN BHD
PLEDGED SECURITIES ACCOUNT FOR JUBILEE INDUSTRIES HOLDINGS LTD
4,000,000 2.0795

6 LEE PAK HOONG 3,841,537 1.9971

7 GIAP SENG AUTO SUPPLY SDN. BERHAD 3,732,714 1.9405

8 TAN AH LOY @ TAN MAY LING 3,300,000 1.7156

9 HSBC NOMINEES (TEMPATAN) SDN BHD
HSBC (M) TRUSTEE BHD FOR CIMB-PRINCIPAL MALAYSIA EQUITY FUND
3,116,300 1.6201

10 RHB CAPITAL NOMINEES (TEMPATAN) SDN BHD
PLEDGED SECURITIES ACCOUNT FOR FONG SILING (CEB)
3,100,000 1.6116

11 CITIGROUP NOMINEES (TEMPATAN) SDN BHD
UNIVERSAL TRUSTEE (MALAYSIA) BERHAD FOR CIMB ISLAMIC SMALL CAP FUND
3,005,200 1.5623

12 MAYBANK NOMINEES (TEMPATAN) SDN BHD
MAYBANK TRUSTEES BERHAD FOR CIMB-PRINCIPAL SMALL CAP FUND (240218)
2,594,800 1.3489

13 CHUAH AI YIN 2,279,000 1.1848

14 LOW SUAN KONG 2,150,000 1.1177

15 MAYBANK NOMINEES (TEMPATAN) SDN BHD
PLEDGED SECURITIES ACCOUNT FOR SHAIFUL HAMIDI BIN BASIRDIN
2,150,000 1.1177

16 JUBILEE INDUSTRIES HOLDINGS LTD 2,100,000 1.0917

17 CITIGROUP NOMINEES (TEMPATAN) SDN BHD
UNIVERSAL TRUSTEE (MALAYSIA) BERHAD FOR CIMB-PRINCIPAL BALANCED INCOME FUND
2,069,000 1.0756

18 CARTABAN NOMINEES (TEMPATAN) SDN BHD
RHB TRUSTEES BERHAD FOR KAF VISION FUND
2,000,000 1.0397

19 M & A NOMINEE (TEMPATAN) SDN BHD
PLEDGED SECURITIES ACCOUNT FOR COLIN CHUAH CHIN YU (M&A)
2,000,000 1.0397

20 SU MING YAW 1,680,000 0.8734

21 TAN AH LOY @ TAN MAY LING 1,600,000 0.8318

22 DB (MALAYSIA) NOMINEE (TEMPATAN) SENDIRIAN BERHAD
DEUTSCHE TRUSTEES MALAYSIA BERHAD FOR UNITED INCOME PLUS FUND
1,525,900 0.7933

23 UOBM NOMINEES (TEMPATAN) SDN BHD
UOB ASSET MANAGEMENT (MALAYSIA) BERHAD FOR GIBRALTAR BSN AGGRESSIVE FUND
1,430,400 0.7436

24 UOBM NOMINEES (TEMPATAN) SDN BHD
UOB ASSET MANAGEMENT (MALAYSIA) BERHAD FOR GIBRALTAR BSN STRATEGIC FUND
1,371,000 0.7127

25 AMANAHRAYA TRUSTEES BERHAD
CIMB ISLAMIC EQUITY AGGRESSIVE FUND
1,236,900 0.6430

26 CARTABAN NOMINEES (TEMPATAN) SDN BHD
RHB TRUSTEES BERHAD FOR SP TACTICAL INVESTMENT FUND
1,200,000 0.6238

27 LOW SOOK MENG 1,191,100 0.6192

28 HSBC NOMINEES (TEMPATAN) SDN BHD
HSBC (M) TRUSTEE BHD FOR PERTUBUHAN KESELAMATAN SOSIAL (UOB AMM6939-406)
1,137,700 0.5914

29 LOW CHOON YEN 1,000,100 0.5199

30 TAN LEE SOON ENTERPRISE SDN BHD 1,000,000 0.5

friends, no need to keep argue, looking over the market. What stocks you think can buy?

Malaysian ringgit you think so easy can climb against USD? With so many bad news from our country and high household debt, high government debt, corruption, wastage of taxpayers money.

After so much story, USD vs MYR still 4.20.

1.50 coming

icon 8888.

can i ask you?

How do we create our blog and post?

they only follow market price if you see back the historical trend.

When price go down, they downgrade. When price go up, they immediately upgrade.

Like this who doesn't know.

I think thong guan conservative price should be RM 4.50. (1 year target)

EPS 50 cts x PE ratio 9

We have to see thong guan has a NTA of 3.70.

There might be a future growth of EPS generating from the high nta.

so many mistakes made by kenanga analyst.

1. the 4 cts dividend should be last yr 2014 dividend.

They said this year dividend is 13 cts.

Should be 2015 (9 cts) 2014 (7 cts).

2. I dun think thong guan net profit will be 30cts in 2016 financial year. (as expected by kenanga)

I think it will be 50cts, factoring in the growth by the new technology.

soon ppl will realise latitude is still a cheap and bargain buy!

geshen free fall today!

any research report from CIMB? Can attached here?

anyone has latitude company email? i think we need to write to the director and voice out opinion

eps 27.23 cts

taann 4th quarter eps 15.65

eg industries is moving!

robert must have many personal interest with hevea...

Robert

有料爆料，懲奸治恶！
Dare to Reveal without Fear

Do you dare to reveal on 1MDB?
With the recent law on life sentence + whipping on whistleblowers and revealers.

Do you dare to reveal without fear???

flying!

optimusdap,

of course BN is running dog for jibby. but they get br1m, asb, affordable houses, rm25 year schools, free books etc. What Dap and Amanah can offer? Keep asking for help and donation only

Based on your above comments,

I may ask you a question, can i ask RM 10,000.00 from you? and i return RM 500.00. And you have to say thank you to me...

What do you think?

Since Amanah is trying to do some good things, we should support. For Malaysia to become a moderate country.

optimusdap, why do you say the comment is moron?

bigheadsheng,

Do you know the main difference between clever and foolish people?

The answer is:

** They will never understand each other **

No need to ask for further explanation from others. Because you will never reach an agreement.

bigheadsheng,

you see, i dun think they are collecting vs-wa in a whole plan, vs-wa volume amount traded is only less than RM 1 million.

It looks more like big funds selling VS- mother shares. Once they finish selling, than VS mother shares will rebound.

That's why VS-WA didn't drop ;like madness.

If really got company profit problem, i dun think the VS-WA can even survive

friends, let's speak a frank word.

you calculate VS-WA, RM 0.33 + RM 1.65 to convert. = RM 1.98

if VS going to doomed, VS-WA already drop to zero right now. Do you think anybody will still hold VS-WA.

VS mother RM 1.16, VS-WA after converted is RM 1.98. Think about it

Looking at all past articles, i have a feeling that Robert has been paid by some of the enemies of Hevea. If not, why would he spent so much time biting on something that doesn't bother him so much.

Friends, first i can say small investors has take into account of the realised forex gained as in the other income. Of cos, when ringgit to usd still above 4.00, so revenue can be high and good.

One more thing have to take into account, when ringgit is cheaper, there will be more opportunities for more sales and order to come in. Just imagine, a US client will prefer to buy goods from Malaysia compared to Singapore and China. Because their currency is higher. There is a competitive advantage coming here.

GADANG TARGET PRICE GIVEN BY JF APEX = RM 2.86

FY 2016 EPS 0.34 x 8.4

kenanga research give latitud fair value RM 9.55. First investment bank research on latitud

On Our Radar – Furniture Manufacturers
Riding on the USD Bandwagon

By Voon Yee Ping / voonyp@kenanga.com.my; Sarah Lim / sarahlim@kenanga.com.my

We view the Malaysian furniture industry as a potentially undervalued sector which is
poised for re-rating, driven by: (i) their high proportion of export sales, (ii) margin
expansion on strengthening USD, (iii) sector-wide capacity expansion, (iv) long-term
growth riding on the TPPA, and (v) healthy balance sheets. We peg the sector
valuation at an average of 10.6x Fwd. PER, which is at a premium to board makers'
average Fwd. PER of 9.5x as the sector shares similar positives (consistent EPS
growth, steady margin expansion) but enjoys better fundamentals (higher dividend
yields, stronger balance sheet positions). Our valuation is applied to annualised latest
quarters' EPS, with adjustments for growth and seasonality. The resulting fair values
indicate strong return potential for furniture makers averaging +15%. Among the
furniture players, we see above-average return potential for:

LATITUD (Fair Value: RM9.55; Total Return: 20%),

LIIHEN (FV: RM4.01; TR: 55%),

POHUAT (FV: RM2.54, TR: 34%)

flying!

ADD (no change)
Current price: RM1.46
Target price: RM2.00
Previous target: RM2.00
Up/downside: 37.3%
Reuters: HEVE.KL
Bloomberg: HAVE MK
Market cap: US$145.7m
RM638.8m
Average daily turnover: US$1.15m
RM4.96m
Current shares o/s 397.8m
Free float: 56.5%

HeveaBoard Bhd

Stick to the fundamentals
■ We organised a conference call with management and institutional clients to
address three negative allegations made by an investor blog over the past week.
■ The civil suit at HW (Hevea’s largest shareholder) the non-payment of dividends.
■ Management dismissed the allegation of 700 containers of particleboard stuck in
Korea.
■ The intercompany loan from HW will be repaid by mid-2016.
■ We maintain our Add rating and SOP-based TP, with 4Q15 results as a catalyst.
Conference call to address negative newsflow
Over the past week, the investor blog i3investor.com carried three negative allegations
against Heveaboard (Hevea) that resulted in a share price decline of 15%. We
organised a conference call between Managing Director, Yoong Hau Chun and
institutional clients this morning to address these concerns.
Non-payment of dividends
A civil suit was instituted by HeveaWood Industries (HW) (Hevea’s largest shareholder
with 27% stake) minority shareholders against the Yoong family for the non-payment of
dividends at HW. Hau Chun explained that HW was not in a position to pay dividends
from 2009-12 as Hevea’s financials were stretched following the collapse in the
particleboard industry. The high court have decided in favour of the defendant.
The Korean debacle
Another allegation was made that 700 containers of particleboard was held up for
Korean Customs in Oct 15 due to non-conformance of quality standards. Management
dismissed this as untrue. Korea had changed its orders from E2 boards to E1 boards. As
Korean E1 testing standards differed slightly, Hevea delayed shipment to Korea pending
clarification of its new testing standards. This issue has since been resolved.
Discrepancy in intercompany loan
The third allegation made was that Hevea “beautified” its accounts to hide an €890,000
inter-company loan made by HW to Hevea in 2005. The blog quoted discrepancies
between amounts owed by related parties to HW vs. the amount owing by Hevea to
related parties. Management explained that HW had made other inter-company loans to
other related parties in addition to Hevea and hence, the amounts would differ. All of
Hevea’s debts will be repaid by mid-2016, according to management.
Stick to the fundamentals
We felt that management addressed the issues very well and sensed that institutional
investors were comfortable with the explanations. We urge investors not to be distracted
by these ongoing non-fundamental and frivolous allegations. In our view, any share price
correction is an excellent opportunity to bottom fish as our earnings forecasts are
conservative (RM/USD of 4.0 vs. current spot rate of 4.4). A 1% depreciation of the
ringgit increases Hevea’s EPS by 7.5%. Maintain Add.
▎

frens... he still hold 5,000,000 shares.. is equivalent to almost RM 40 million

just think about yourself. if you hold a stock so much, sell 300,000 shares out... nothing big deal lar

Balance shares: 5,079,700 shares

SC, what announcement today?

guys.. all rich people family have these kind of problems lah..

since the case already in 2014, old story... why bring it out now?