What I think is after the fund is done selling it will rebound. Already 60m shares past 2 days. Just be patient

I was initially planning to sell some after this quarter and switch some to pchem for another one month until the result then switch back. But look at pchem. It came down a lot too

If market crash tomorrow, you have the comfort that there is limited downside for this counter. I've been thinking to switch some to other counters but apart from gloves and tech, most of it is gambling on the virus recovery and we don't even know if they will continue to make a profit next 2 quarters

We cannot avoid short term fluctuations it happens. If your holding on non borrowed money, it will go back up just be patient.

Judging by the volume, the seller hasn't finished selling and after that hopefully it will recover quick after.

There is nothing wrong with the fundamentals of this company

stockraider haha ok. i thought i was stepping on your tail. Later kena kacau from you until koyak like rest in the other forums

stockraider you welcome criticize me lor. but please give me more factual statements that just u dont like what i wrote.

Then i should ask u why Lotte Chem Korea today still can survive as top 30 worldwide or why isnt the world only left with top 5 players in every industry. Then we see who the sohai is lor

Why dont you tell us why Petronas can survive when there Exxon, Mobil and Shell.

And finally back to the part that concerns most of us here i.e. LCT share price. If you look at the volume on the last trading day afternoon session, was it due to negative politic news, a really bad QR or perhaps one particular fund that decided to exit ? If you look at LCT top 30 shareholders and understand the fact that Lotte Korea holds 70% and they are already under-fire for compliance of shareholders spread how it is possible that retailers could generate this kind of volume.

It also means that another fund had increase their stake as the market cannot absorb so much selling down otherwise. It was 5% shares total active shares traded on that day as if you take 2.308b shares x 30% ( as Lotte Korea will not be trading so i take only the remaining 30% of tradable shares ) u get about 692m shares. 40m shares were traded on last trading day.

The only relationship between LCT and the vaccine is the premise that the cure could help to spur back global demand and consumption that would lead to a hope that oil prices can increase back to pre covid level of 65 USD .This would affect LCT as raw materials such as ethane and naptha which is a derivative of oil, would increase.

This is solely my view but looking at how most of the oil majors like Shell, Exxon and Mobil have reported bad financials this last week and took a huge beating on their share prices, I dont see oil prices jumping back so quickly and even if the cure is out today, it would take 3 -6 mths for businesses and demand to slowly adjust back to pre crisis levels. And then of course you have the unfortunate casualties of the pandemic where some businesses that close might not re-open anymore. That will obviously affect global consumption.

This is of course only part of the equation with the assumption that LCT is not able to increase cost of production to end users. To understand whether they can pass on costs to buyer you have to look at the demand for LCT polymer and monomer products which is actually very broad based. Its true, LCT products are used for masks, gloves, etc but the ultimate contribution by these sectors are not big because they do a lot of products, and they sell to a lot of different industries.

This is also a good thing to me that they are affected more by overall global demand / consumption rather than just 1 or 2 particular sectors. Then again, you have to look at supply of petrochemical plants and those are active. When some go offline for maintenance, like what LCT did in Mar / Apr 20, supply will be cut and prices can higher higher.

As for your second question, i actually answered it earlier with my explanation on operating cashflow improving from -28M in Q1 to RM195M in Q2 which is the real cash profit indicator. The reported profit is just accounting profit and you can say that in Q1 LCT decided to make a bigger than required write down on inventory, and now in Q2 they are writing some of it back. This is all non cash anyway so if you look at cashflows, they did reasonably well. I tried to explained that 1h2019 their cumulative operating cashflow was about RM490M which lets say we then use this as baseline as say its RM245M per quarter. For Q2 2020 cumulative, LCT generated RM223M ( from 195m + 28M ) so not far off

The financials can be a bit confusing coz in some places they use QoQ, some use Cumulative to and Cumulative half year

Lets just look at it objectively. They reported pre-tax profit of RM109M for Q2 2020 in COVID environment which is approx 20% down from 2Q2019 of RM138M. How can this is be bad result when 70-80% of all the companies on BURSA are reporting worst declines or worst still, losses.

Instead of looking at the movement of the non cash items like reversal on impairment on stocks, etc, I instead I look at the cashflow from operations, which looks healthy at Q2 even at cumulative level ie from -Rm28m operating loss to operating profit cumulative of RM195M. Meaning this quarter alone is around RM223M which is around average per quarter if you look 2019 as baseline.

At this price, your paying 30 cents for the whole business since net cash per share is around 1.71 and this is actually a very good business to be in, just that its cyclical. Some might argue, but there are 2 players in Malaysia and they dont necessarily produce identical products like-for-like anyway and LCT performance also includes performance of offshore subsidiaries. If you view LCT being overvalued, please share with rest of us what is of better value instead of just making a general statement.

As an investor, we shouldnt be worried about what short term spikes. Remember approx 90% of retailers lose money whereas only 10% actually make consistently. If following the herd chasing shares up and down hasnt work, maybe you need a new strategy

Do we have earnings visibility for LCT ? Naptha spreads to selling prices are still very healthy so not only do i think Q3 will be superb but probably Q4. On the expansion, for Lotte Chem Korea to invest 16B into their Indonesia plant they must have done their due diligence and obviously the financing bank will look at the project viability before they do part of the financing. So to those that think this is a lousy business, i guess Lotte Korea is only willing to bet 16b on it. How much are you betting your future ?

Except for Glove, Tech and Food, which other sector can you say with confidence that there will be stable future earnings. Most other sectors everyone is holding is on a silly promise that recovery will come soon but as to when no one has even a clue.

My take is an overreaction and obviously some fund decided to exit hence the volume. Notice how the volume spiked after lunch, doesn't look like retailers selling and anyway there are not enough retailers here for this volume

It's not a good QR and but it's not a bad QR.

I was hoping for a higher profit though. Plastic ppl tell me that the huge margin is from mid May onwards so Q3 will definitely be very good but I was hoping that q2 it could hit something like 200m, then q3 would have a better chance of hitting 400m level which is post IPO level

Babyace I gave you a like on your post

Should be end of day. So next working day only market will react

Im forecasting 150m on the basis on that was their avg profit from previous quarters before Q1. Also, margin improved in Q2 so technically should be higher. We just have to Q3 which will good for sure.

I just curious so they got distribution rights for the vaccine. But how many cases do they have in Malaysia now? Is everyone going to take the vaccination jabs for prevention ? How many people actually take the updated flu jabs every year?

We dont even know when the vaccine will be out. It could be another 2 years. And what is Dphama and Pharma doing ? 'Fill and Finish' process sound like a nice way of say bottling or packaging which you dont expect their margins to be high for this simple job.

What LCT supplie is Butadiene which i dont think PCHEM produces at the moment. This is one of the main raw materials for Gloves.

https://theglovecompany.com.au/hands-on-safety-blog/2018/nitrile-gloves-frequently-asked-questions-and-answers-faqs/

When my overseas friends ask me what it mean to be Malaysian? It means we have to accept we have the biggest crooks and we clear all of the them. Including No1 whom Im sure will be cleared. What a wayang kulit for the past 2 years when we know he wont be going to jail.

Anyway I dont want to comment anymore here. I just wanted to share another viewpoint. If AA is for you, best of luck.

@Mabel

Lets just be objective. If it was truly for branding and promotional activities, you wouldnt advertise with a lousy team that the crook owns, you would advertise with the best and see what other options to get value for dollar spent. Its a related party transaction unless you choose not to see it that way. If its was truly for this purpose, i would propose give the saving to AA, let AA decide how they want to spend this 400-500m on Advertising, Promotion and Branding and put it on their books.

I said this earlier in my post, Airbus confirmed the bribe, MACC cleared the crook.

Yes, I saw geary post. My view is that posts like this might not really mean much. Who is the reviewer, does his have any pull ? Was he paid to do this review ? It is was reported by a big news network then it would be something else.

Best budget airline doesnt have this kind of management. Most of the overseas passengers are probably on AAX, which has died from day 1 of IPO.

So you prefer good reviews from backpackers and bad financial performance for shareholders or the other way ? I dont know but i dont recall AAX ever making a profit since its listing. I have a friend who kept telling me to buy and he averaged all the way down from IPO to about 20 cents.

Posted by Mabel > Jul 12, 2020 10:31 AM | Report Abuse

Meow BornToSpeculate ...

As an Investor, I would like to see what are the actions taken by the company...

Yes, I agree the cost savings from the airbus deal for AA shareholders would have been great to add on the list of action taken. From what I read the deal is to cover promotion and marketing expenses to promote AA as a Global Brand. Based on what geary posted last night it's working.

@geary BY DAVE BRETT

5 Reasons why Airasia are the best budget airline in the world.

Budget airlines often come along with no frills, for the low price you pay, all you expect is to get from A to B as safely as possible. After my experience of flying with budget airlines around Europe and North America and Oceania I was shocked when I first discovered Airaisa on my backpacking trip around South East Asia.

Here are my 5 reasons why I think Airasia is the best budget airline in the world:
https://traveldave.co.uk/why-airasia-is-the-best-budget-airline/
11/07/2020 6:11 PM

As for Crook, the board has cleared them. Beside, it's not my call to judge as I don't have all the facts. Let's leave this to the relevant authority to take action upon them if it warrants..

I hear what you are saying on your last point. However, I always believe what the great Confucius used to say..." A journey of a thousand miles, begins with a single step..."

Meow..

I think the most important question is what was the previous RPS used to finance / invest. They have some good investments like Inari, but i think they have some bad ones too.

@Mabel

All that its just management lip service. 2Q costs reduced but this is not due to good management, its due to COVID whereby every company is cutting staff salary, cost cutting and scaling back on operations. So you wanna give them a pat on the back for this

Good management would be to get the cost savings from the airbus deal for AA shareholders instead of going to the crook whos been milking the company. Thats why AA from a shareholder funds of 6.6b in 2018, is down to only 1b and u guys now have to go for a rights issue.

With this, share price should only tank as even the crook might sell some and buy back later and subscribe at super discounted price. However, i hear that he has some existing loan arrangements with a floor on AA share price, so he cant let it crash too.

I dont have the data on fares. But as flights resume, fares will only drop. During MCO a flight to Kuching might have costs 200-300% the normal fare and now that has normalized. You just do the math, worldwide most countries are trying to save their national airlines and what that means is you have excess capacity ( scenario before COVID ) and now a big drop in passenger demand as ppl avoid travelling for at least the next 1 year, what you think will happen to air fares.

Dont forget AA was doing promo on free tickets or something like that a month ago so dont take their ticket booking as indicator of recovering demand / profitability.

Posted by Mabel > Jul 11, 2020 11:16 PM | Report Abuse

@koowakzai Next qr will eat into their nta. Further reducing the nta. Cash call soon. Wait till 0.50 only enter. The worst is yet to come.
11/07/2020 11:09 PM

Sure..unless if they implement Right Issues. Please scroll up what I have shared earlier.

Fares is actually rising and flights resumed in most countries. AAGB is actively managing costs. As at 31 Mar 2020, it has a MYR1.6b cash balance. Through a combination of debt and equity financing, it expects to ‘outlive’ the COVID-19 pandemic. Positively, it also stated that average fares have been rising (1Q20: +8% YoY) as the COVID-19 pandemic has caused airlines to cut capacity and competition. As of today, AAGB has resumed flights in five of the six countries it operates in. Japan will resume flights in Aug 2020.

In 2Q20, 60% of fixed costs have been reduced. For FY20, AAGB hopes to halve cash expenses YoY. Here are some of action which is under progress

1. AAGB targets to reduce CASK from 3.80 US cents in FY19 to 3.60-3.70 US cents by FY21.
2. As at 6 Jul 2020, 70% of its Brent fuel hedging contracts have been restructured. The FY20 average Brent hedge price is USD61.41/bbl.
3. AAGB expects to record more losses on settlement of fuel hedges in 2Q20 but does not expect to record as much in 3Q20 and 4Q20.
4 Other measure to preserve liquidity in FY20 are to:-
a) Defer operating lease and maintenance payments - AAGB may return 38 aircraft in the next 3 years. It is also exploring lease rates based on utilisation rather than a fixed lease rate per month or year.
b) Get customers to accept credit shells instead of cash refunds – 80% of customers have opted for credit shells.
c) Delay taking delivery of new aircraft – In fact, AAGB is cajoling Airbus to refund some of its aircraft purchase deposits.
d) Rollover working capital loans
e) Review pilots’ allowances
f) Institute pay cuts across the board including that of directors
g) Seek debt, equity and hybrid financing
f) Encourage associates to seek their own financing
g) Get fuel vendors to refund prepayments
h) Renegotiate IT and maintenance contracts

Meow..

Jolly can share the KAF report link here thanks

When you look at the financials, you'll realize how incompetent this management is. In FY2018, declared almost 100% of their profits out as dividend ie paid out 1,7b out, in FY2019 they reported a loss of 550m but paid out a dividend of 3.4b. I still recall everyone was singing praises about AA then for this super dividend but no 1 really asked if this was sustainable or right thing to do.

TF really wants to the milk the company. Taking Airbus bribes wasnt enough. Now the company only 1.6b cash left and networth is only 1.1b. Their liabiilities are only 24b, no wonder auditor raised this concern. One more big quarter loss and the company will be negative networth

Now the crook tell us AA is still viable coz after he milked the company, he wants you to subscribe for his rights issue. End of the day, he bought the AA for RM1 through cable and he has milked it enough, if it dies tomorrow only shareholders suffer. This is kind of scum that we should throw in jail for mismanagement and integrity.

AA is only successful in short haul mainly due to cable ie by taking all the profitable routes that MAS has, they dont do not profitable routes. TY is a true Malaysian businessman thats needs cable to do business thats why AAX which is on a level playing field internationally is dead from day 1

If he was a steady at all, he would loan or advance some of that bribed money from airbus and the dividends he took to Airasia to show his support for the company and putting his money where his mouth is. If he does that, im sure market will look at it positively.

Good luck to you guys

I too have old stock so I hope this recovers to pre-PH govt levels :-(

I hope DNEX gets it but lets be realistic too. Experienced never mattered. Its all about bribes and cable for who gets the job. I heard IRIS has a strong cable despite what most ppl think of new shareholder.

MyEG has tons of rosmah cash to throw too and im sure they will continue throwing.

If DNEX doesnt get it, profitability might be at about this level for a while. I hear ppl say that DNEX portal is good but i dont see it churning out a lot of profit or increase profits past 2 years.

I dont know how more defensive we can be. Stock with dividend, net cash, no borrowings, benefit from low oil price, spread / ASP healthy, strong parent company, established business with good track record. Lotte Chem is top 30 worldwide. They are not the biggest but they are definitely not small.

If you invest into an unknown company with good financials, you might be worried about directors integrity of even business disappearing overnight. This you should be able to sleep well with

Even if market tanks LCT will hold or will come back for sure.

Last time they make a meaningful profit was Sept 2018. It just shows what kind of management you got. The boss takes 500m in airbus bribes instead of saving the company this money and company doesnt have good results after Sept 2018. For a company this size, you cant say he didnt foresee this potential going concern issue with auditors when everyone knew what happened to oil prices. He even delayed reporting financials by 1 month for Q1 and still bad result.

As an investor, I think this is incompetence. I think SK Network might change their mind on investing a small portion. I think that banks would be worried to lend them anything with this negative auditor red flag. If your currently holding the share, you have to prepare that a rights issue will eventually come.

Its not that the business is not viable, its the management.

So he takes more than 500m in bribes by overcharging the company, get off 'scot-free' and now the company needs money and he's asking you all to put in more money ? Why not just give back all that money he took and maybe you guys can do without further dilution now.

Airbus confirmed it but MACC cleared him. You wanna put more money in his hands ? Do they even have a plan for return to profitability by when and how this rights issue funding will be spent

He is probably got a margin call today, so im sure he will have to use some of that bribe money to support the share and likely he will get another margin call tomorrow.

Thanks for sharing Andy i read that earlier.

Good that everyone here is positive, the forum feels more constructive and refreshing compared to some other forums

Shows that our market is full of insider trading. Announcement of financial Q2 is 2 weeks so ppl starting to buy already. So i expect price will continue to move.

Another example is that ppl knew to buy Topglove before the super result.

When it was listed at 6.50, LCT makes about 400-500m per quarter. Since then it has come down to about half or less thats why the price dropped. This is consistent with the industry as PCHEM has also dropped profitability in 2019.

Topglove make 300m a quarter everyone jumping and screaming. If this can go back to IPO profit level hopefully in Q3 ( as Q2 profits will not be able to fully recognize the increase in ASP ), imagine what the price could be

Every industry is cyclical so there are good times and they are bad times, at this price can only be upside

Butadiene

I have some info from plastic industry that good profit will only from q3 onwards coz prices went up in may and there is a price lag and orders taken in advance. I expect a profit for sure for q2, let's see.

Nothing much to worry at this level

Nesty, cash per share is the floor price. Even you use any super financial theory, if they discount cash, discount the theory.

Unless of course, you think that this is another Wirecard fraud. And on this, we get to fall back on Lotte Group reputation

There is a link on the announcement for the e invite. Please share for those who are going, as I wont be joining.

Suayexpert is back.

If prices go up for Naphtha, ASP should go up as well. Anyway, reporting quarter is for Apr May June 20. If it goes up now it will only affect next quarter and i just checked the spread earlier it is still healthy.

nesty, just hold on tight and check back later. LCT result should be out by end of next month ( normally its 1 mth after, i dont knohw they they are so efficient ) but PCHEM will be 2 mths after closing. Both have same financial year end.

https://www.thestar.com.my/business/business-news/2020/06/22/foreign-funds-offload-rm6007mil-off-bursa-for-18th-straight-weeks#cxrecs_s

Even if KLSE dropped 2k points and everything goes to bad due to 2nd wave of covid, net cash per share is 1.71 at least discounting upside of the business. How wrong could you go. For other good counters, if market is bad.. price can drop and you cant predict due to so many variables, and its hard to establish the bottom.

For this, you are very close to the bottom. Even if it does, you can be sure that it will come back coz its cash.

Nepo, to console you. Just like you sold your old property at a good profit and like all property investors i know, they went to buy something else. And normally that something else is already inflated like what happened to everyone who bought property past 3-4 years.

You might have gotten out and bought a better stock, but looking at the overall market most things have also taken a beating. For example, pchem was 7 bucks recently when LCT was 1.85 i think or lower. look at it now.

Investors will win consistently in the long term whereas traders wont. You tried trading before im sure, i will call it gambling or luck whether its stocks, FX, crypto, commodity. Even ppl who claim that they are skilled i dont see them doing better than long term investors as they cannot predict when it goes up in larges spikes.

What dumpinglee did, im also guilty of which is the worst. Buy for short term but dont cut loss when it hits your target and hugging the stock to death. And now when its recovering from the the bottom you cut loss. If it goes back to above his cost in one day, he still curse and say he made the right decision to console yourself but he was not consistent in his strategy. If he had cut loss in the first place when it dropped 30% from RM4, and bought in again at 1.20, he would have made.

I wanted to raise this earlier. So if it was scheduled maintenance doesn't it mean that the first quarter small operating loss of 30m-40m ( after adding back non cash items ) was partly due to this instead of the reasons analyst gave ?

Analyst didn't even mention this although the Korean CEO said this

Short selling will hit glove counters more coz more retailers. Mostly funds holding LCT and they are not on margin

There was an article stating that full capacity since Apr. I think first Q they had some disruption either maintenance or internal reorganization of production

Thats the plan. Hopefully when this happens the stupid funds will realize what an idiot they have been and start buying back and pushing the price up. Thats when we should sell

Are you sure you guys are reading this correctly. Looks like ESOS conversion to me. I dont think stingy fella is gonna spend 5m to buy his own shares.

Nepo dont worry. If you hold 70% of your subsidiary and its listed you wont be trying to siphon profits out. In fact, you might consider doign the opposite to boost share prices since its so far below IPO, so that in the future if you want to raise more funds you can do it with a higher price

Futures up 899. Tomorrow will be green

I like suria it's a good stock and made money many years ago also from this. But trade vol will take a while to recover and the JV development won't material soon and bumi run sometimes gives me some worry.

I could be wrong but I'm more confident on recovery here

Yah made small profit although dividend next month coz im more confident with this counter. I went in suria 90. Sold 1. Didn't make much but it's ok

Yes nepo remember I said today might drop coz I expect this to take a while for market to drop. Us futures now down. But keep in mind that cash per share value so it's only a matter of time it comes back. I sold my suria last week to add more here and suria dropped today too

I was thinking to buy so other stocks that dropped a fair bit today but went back to added more here