JollyAndy, we can never predict the market. If you believe in the company and the valuation, just hold tight. There are so many reasons why stocks up and down and when market is bad everything will come down.

If you invest long term like an investor but cut loss like a trader, you will cap your upside. Of coz, if your wrong you can lose more, but this is where we put our money where our mouth is.

Some of us are not that worried coz our costs is 1.20-1.30 and we took the dividend too but even if you joined the party late, remember cash per share is 1.71 no matter who is selling, i think they will regret this later. Thats my take

you can see the buyers are holding back, waiting on the side. volume is low today.

Dont care what the analyst say. But dont be complacent, just read what they say and see if they are telling you something u dont know. What i expect is for the analyst to tell me what we missed during analyst briefing coz we are not allowed to attend anyway and sometimes they get info before its released and they spill the beans indirectly in the recommendation.

Is it a good time to buy since market will crash anytime soon ? Thats why we are here coz we know next quarter will have good results whatever happens to Malaysian market instead of chasing glove stocks at 100 PE. Anyway do you think market is going to crash ? Whole world govts are supporting with COVID relief with low interest rates and strong intervention. Most investors already prepared to accept bad QRs for whatever industry you can think of whether its airlines or cruise liners to recovering shale drillers.

Warren Buffet the all time 'best investor' made the biggest mistake but selling off airlines at the lowest and now it was rebounded sharply making him look like the biggest idiot in town. So dont blindly follow people without using common sense

Andy, worst case scenario the net cash per share of this is 1.71 per share roughly with their 4b cash at bank. CIMB moron recommendation is target of 1.62 even below this price.

So he/she thinks LCTITAN ( even though 2 players in Malaysia ) is such a lousy business and we should even take a discount on cash per share. You just look at objectively whether that make sense to you.

here

May 1, 2020 10:45 AM | Report Abuse

Ill try to explain this briefly. If you read the cashflow statement :-

Loss of -205m

+ main non cash items
depreciation 134.6m
write down inventory 81.3m
impairment from associate 35.1m

So you end up with a small operating loss actually of 28.5m after the rest of items. Which means the bulk of the losses are accounting losses, not cash burn.

After working capital changes, net cash after operations is 270m ( similiar to previous period ).

Did anyone notice that cash and bank balances already increased despite the loss to 4.03b from 3.91b ?

So now you know why there are big buyers when others are just shouting on the side line

Simon is right. Especially when there is a big loss and the analyst dont even correct explain the loss i.e. whether it is non cash, due to conservative accounting principle they took more provisions or impairment etc.

last quarter for LCTITAN the bulk of it was non-cash i earlier shared the post. i can reshare here. Analyst have to be careful with their words. Above the analyst core net loss earnings / loss were 140m instead of quoting cashflow

Jollyandy thanks for sharing this.

317 USD is still very acceptable compared to what it was last year and not forgetting selling prices have gone up.

I personally dont think that oil prices will go back to 65 usd in the short term. From the current of 40 usd, it should be more less volatile and more stable keeping in mind that global demand is still low even with all the cuts

Do what you think its right. Just remember these are the same shallow analyst that told you to sell PCHEM on result and lower target to 5+ or lower and it has gone the other way.

They say EV/EBITDA for LCTITAN is half the industry average due to volatility. The only other comparison is PCHEM. LCTITAN actually made a consistent 130M+ PBT for 3 consecutive quarters except the recent loss whereas PCHEM has been reporting very volatile drop in earnings you can check for yourself.

These are all kindergarten analyst which normally had an unconvincing buy or sell recommendation. What we need is some non public info that was disclosed during analyst briefing about how the company is actually doing instead of info we can google and find out ourselves.

Again, they dont talk about ASP prices going up. They dont even quote what naptha cost USD they used in their analyst

jinghee you need insider info for that. mgmt wont disclose such detail info especially pricing. And why would China party pay 5 times unless its buyer thinks the price of the commodity will jump by more than 5 times in the near term so they want to lock in now.

This counter is mainly institutional play. Retailers cant really push the share up anyway. The reason it was down yesterday was due to association with Glove related counters. It is not really related apart from the fact that they supply Butadiene but when big funds get hit they start to reduce some of their positions and this was affected.

Today was a clearer view that those that went up sharply without fundamentals, have all come down today ( ADVENTA, HLT, LKL, etc ). Its bad enough that we got stupid research houses that can promote glove stocks at 100 PE but for ppl to chase these other supporting industries at this high valuations is just a con. Just look at how much profit some of these companies actually make.

Many ppl think that this profit taking on glove sector but i think it might be trend reversal now as it is obvious that its not worth a quarter of that. And the funds are closing their positions and buying finance / banks today, thats why banks are up 10% today. Remember Google PE is 25, Alibaba is maybe 45 times and these are market leaders with technology and competitive advantage. Glove industry is just contract manufacturing and its not really high tech.

I just added a little bit more at 2.30 earlier. My old stock is all at 1.22 plus. Not worried and im adding some coz i think there is still a lot of upside

This happened

Dear Margin clients

Kindly take note starting today there’s a revision of Price capping for the Glove counters below

35% price cut on market closing or the price as stated below, whichever lower

1) COMFORT (2127) RM2.35
2) HARTA (5168) RM8.15
3) KOSSAN (7153) RM5.65
4) RUBEREX (7803) RM2.31
5) SUPERMAX (7106) RM5.00
6) TOPGLOVE (7113) RM8.64

If you have glove counters in margin account and have Margin call, can regularise by end of June 2020

Thank you

simonalibaba i see your also here. I just sent you a private message

Decided to just top-up at 2.34

This is the main raw material for nitrile

https://www.lottechem.my/products/productGuide_view.asp?code=C224

I was looking at Genting too but I chose Suria instead as I dont want to gamble on recovery story and when it will happen. This is a worldwide issue on tourism decline due to covid and everyone including Europe, Japan, etc and we dont know if this is 6mths or 1 year or if they numbers will come back at a lower amount

I know Airasia is cheap now but i just dont like the idiot. He has no backbone seeing how he switches sides so fast, and he is obviously took a huge bribe from Airbus and got off 'scott-free'. Imagine if he has given that saving to the company and shareholders, how much interest he could have saved. So i dont feel he does things in best interest of company

Anyway Airasia success is purely political. Locally he can do well coz he can get approval for all the profitable routes. On an international stage ( AAX), see how they do when its a level playing field.

Nepo I see you are also here. I also bought suria. The only two stocks I bought since covid

You have to treat old stock as a loss and you begin new every day. If you don't, everyone will get sentimental and be tempted to average when you have higher costs. This is normally the worst decision and even im guilty of it.

What is lost is lost. You can only make it back via other means. Most stocks are technically dead coz of the economy. If you bought property, construction, building materials, oil&gas, etc the come back will be a long time waiting. Either you accept the lost or just leave it there coz it wont be coming back anytime soon

dont use good money to chase after bad money. always remember that in the market for you win someone has to lose. we have to think of how to make money from the funds coz they always kill all the retailers

This is a good example of why i dont trade. No luck for me and i dont have the time to monitor. It was trading 1.60-180 for a long time, but you would have miss this rally the past few days. This alone should be more than your trading gain

Terrorsin, patience is a virtue. I've been holding since 1.23

What other stocks u bought ? POS ?

One thing I wanted to share is that some ppl have the perception that LCTITAN is only competing locally against PCHEM for its business. LCTITAN has one 1 plant in Malaysia i think, the rest of are overseas. Their 2b+ expansion is actually in Indonesia so i dont understand why someone earlier was trying to compare with Pengerang project and PCHEM.

Posted by BornToSpeculate > May 3, 2020 10:41 AM | Report Abuse X

With the current oil prices at historical low, being an downstream user is definitely better than being an integrated player. Is anyone doubting that Petronas group is now suffering badly right now ? Is there transfer pricing to PCHEM and will this change ? What is the avg cost of oil production for Petronas ?

Why did PCHEM report a substantial drop in profits ( since 2018, it has dropped every quarter except Jun2019 ) to a low in Dec 2019 its a worrying underlying down trend but im not going to go into details. This is before MCO. They have the same financial closing as LCTITAN but the latter already reports 1 month earlier consistently. Lets see what PCHEM reports end of May.

No need to argue. You buy GLC producer, you pay 16 PE ( based on 2019 results ). LCTITAN is 7-8x ( based on 2019 results ) and has higher cash per share. Both are expanding, doesnt matter is one is bigger than the other, what matters is the EPS to shareholders and dividend. If you think 16 PE is cheap for PCHEM please go ahead.

hitgirl47 i guess you partied more than you read. They are finance / stockbroking background over a long period. Go and ask any old timer and do a proper google search before you further embarrass yourself with your ignorance

One of the reasons Im still holding this is i cant find a better safe stock to switch to that hasnt gone up already. Guys if u have any please share.

If you been observing there is buying support for this everyday just that the buyer doesnt put it entire on the board for you to see. Everyday it goes up then fluctuates down.

Depending how you analyze, this is still a cheap stock to me with upside in next Q

Boss already selling shares

Its been going up almost everyday for a long time so its only natural it comes down a bit and stabilize. Today market is down coz of the US. A lot of counters taking a bigger drop today.

Logically nothing has changed fundamentally for Lotte Chem ( oil price remains low and end product prices high ). Powell came out and said that this crisis might take longer to recover than expected for the US

How much of an effect on Malaysian economy is subjective but our 'smart' fund managers will all take this a trading opportunity to sell down first and buy back later

Its going up coz its undervalued and probably still a lot more upside. I see most ppl here are happy except a few sour grapes that probably stop commenting coz they couldnt stand being wrong everyday

I think this can still go and at this point i dont know a better safe stock to invest in that hasnt already gone up.

jlex11 i will only comment here and not in glove forums coz i dont want pour cold water especially when im not holding the stock.

Harta at 70x and Topglove at 50x is rubbish at the current prices. They are only sustaining coz our stupid fund managers spend too much time on entertainment that they dont know what else to buy so its herd mentality. Imagine that Alibaba PE is only about 40 times and Google PE 27 times. Which you think has more potential to grow profits ?

These are glove companies that are actually contract manufacturers for medical groups where prices are negotiated every quarter. Expansion of capacity takes 3-6 months or longer. Is there Tech involved in glove manufacturing ? Go for factory visit then u have your answer there.

Traditionally we have a lot of glove manufacturers due to raw material latex. Now that everyone is moving to nitrite gloves, glove factories can technically be anywhere in the world as machinery lines can be automated and dont need much human labor.

Thats why i dont trade on especially stocks im comfortable to hold. Once you sell, you might not be able to buy back. Sometimes you get it cheaper, sometimes times you dont and you might end up being the idiot in the room. The dividend anyway is within 1 day price moving average ( up or down ) and its on a upward trend. So just think about the bigger picture

That in theory is correct that the share price should adjust by the dividend amount. The difference is when an stock in on an underlying uptrend and its perceived to be undervalued, the drop might be only for a short while and might recover sooner than you think.

Also the difference to me is that i would have gotten the cash dividend in my bank account instead of higher paper profit and i don't lose if it rides up all the up when it opens. Assuming if you sell today, you might not be able to get exact 7 cents cheaper or more on ex-date.

If you wanna huat, do to the opposite of what the expert says

I dont know what you guys think. but companies have their factories burnt down normally isnt a very good sign of management / integrity. Yes there are cases were it was due genuine cause of fire but these are more rare if u ask me. Remember this is a low risk industry for fire.

This is just another contract manufacturer using CNC machines with no real technology

Dont worry its back up already despite market being down

With the current oil prices at historical low, being an downstream user is definitely better than being an integrated player. Is anyone doubting that Petronas group is now suffering badly right now ? Is there transfer pricing to PCHEM and will this change ? What is the avg cost of oil production for Petronas ?

Why did PCHEM report a substantial drop in profits ( since 2018, it has dropped every quarter except Jun2019 ) to a low in Dec 2019 its a worrying underlying down trend but im not going to go into details. This is before MCO. They have the same financial closing as LCTITAN but the latter already reports 1 month earlier consistently. Lets see what PCHEM reports end of May.

No need to argue. You buy GLC producer, you pay 16 PE ( based on 2019 results ). LCTITAN is 7-8x ( based on 2019 results ) and has higher cash per share. Both are expanding, doesnt matter is one is bigger than the other, what matters is the EPS to shareholders and dividend. If you think 16 PE is cheap for PCHEM please go ahead.

xterrorsin thanks of sharing this

don't get emotional and always eat humble pie. I've been in the financial industry for a long time and still I always remember to stay humble

xterrorsinx hope u can make some. times are bad now but it every downturn another door opens. think positive and how to win

Remember 90% of retailers lose coz funds whack everyone. So I always think of how we can make from them

kelvin17 depends on your risk appetite but this is a good and safe stock if you ask me. Since the market tanked, i only bought 2 stocks. LCTITAN and SURIA both are net cash and have low PE. Both also have some competitive adv due to barriers of entry and i think there is sufficient upside.

In this market please dont buy construction, property development, building materials,O&G no matter how cheap.

Someone said LCTITAN is in a shit industry with structural issues. There are only 2 players in Malaysia and our govt gave some carrot for them to setup here and they are here to stay coz this is a profitable business long term else they wouldnt be doing a plant expansion for another 2b+.

Based on current price, its only the net cash per share ( you take 4b cash / 2.2b shares roughly ) so your getting the business for free and this is not an ordinary trading or development business. Its high barrier to entry and you can be sure that Lotte Chem Korea will support in case of anything.

This is the chance that many ppl wait 5-10 years for. Make sure you invest wisely and you make a very good return. Market has already gone up so you have to becareful with your stock selection and dont chase over priced stocks especially those in Tech and GLoves. But thats just my view.

Ill try to explain this briefly. If you read the cashflow statement :-

Loss of -205m

+ main non cash items
depreciation 134.6m
write down inventory 81.3m
impairment from associate 35.1m

So you end up with a small operating loss actually of 28.5m after the rest of items. Which means the bulk of the losses are accounting losses, not cash burn.

After working capital changes, net cash after operations is 270m ( similiar to previous period ).

Did anyone notice that cash and bank balances already increased despite the loss to 4.03b from 3.91b ?

So now you know why there are big buyers when others are just shouting on the side line

What people like Huatexpert ( or shall i say SuayExpert ) keep repeating on negative data but they fail to understand why markets today are holding even at the peak of the corona virus and low oil prices

Dow Jones drop yesterday was insignificant. Do you know how much 24k points is from the peak before Corona ? Its only 30% or less. Thats how bullish world wide markets are now and they are many reasons why this time is diff but if your lazy and refuse to read, and still want to think you know better than just sit back watch and curse..

People still cant get over the fact that price went up despite the loss. If the market proves that what you think is wrong, perhaps your analysis methodology needs a serious overhaul

See the quality of analysts in the industry. No mention on what are the ASPs upside, and worst they do sensitivity analysis instead and cut ASP by 10% and cut sales by 15%. No mentioned that raw material price drop when oil price was 65 USD per barrel in Dec 19 to present level of about 20 USD.

They talk about core loss of 218m from oeprations but without taking out extraordinary write off inventory of 80m.

When price is up, you will console yourself and hope it drops. When it drops, you lose your balls dont dare to take action. Then when it goes up you curse again. So actually when do you actually win

You all say last chance to sell or it could actually mean last chance for you to buy. Negative people will never see opportunity at their door and they whine and complain that things are unfair all their life

At current price 1.7, dividend is still good taking into account you only hold it one more week.

Just be patient. Another 2 weeks to a 1 month they will finishing clearing

titan can share cimb report thanks

The loss was smaller than expected and 80m of the loss was due to write down of inventory. One-off item, non recurring.

IF you want to be conservative just look at conversion / processing margin ( from raw material to finished goods ). But that would be accurate coz selling prices are also increasing in this case

From old article.
https://www.channelnewsasia.com/news/business/lotte-chemical-titan-debuts-on-main-market-of-bursa-malaysia-9022556


Lee said the company today is the largest integrated producer of olefins and polyolefins, as well as the sole producer of butadiene in Malaysia, and the largest polyethylene producer in Indonesia.

Although LCT may face competition from the Petronas Refinery and Petrochemical Integrated Development (RAPID) project, he noted that the industry is in a strong demand growth area, and the market should be able to fully absorb the supplied materials.

If they privatize, big funds are the losers going in at IPO at RM6.5 and now exiting about this price. Not sure if SC will allow that to happen. I would think parent co is buying back some shares now and planning to push up the price and sell some back at a higher price to comply with shareholder spread.

For those that keep thinking that a loss must always result in a gap down in share price or since first quarter EPS is negative price should drop, I hope you start doing some homework on equity valuation, just google it. People look future earnings, future growth and the loss was expected.

If you so worried about this, you have more than half of KLSE that will be reported losses / bad results for Jan to Mar2020 coming soon, and most of them are not even net cash with tons of borrowings. PCHEM is similar industry, same financial closing and has downtrend in profits 2-3 quarters before this. Lets see what they report. Sapura NRG had mt everest of debt, reported a super result yesterday did you not understand why it didnt drop ?

terrorsinx nice analysis but i think SC will grant them extension and not let them privatize