QR release. Revenue and PAT dropped 30%+. Didn't look into the details.

Analyst give target price of RM 17++.....

Lower borrowing cost and fuel cost due RM strengthening against USD. Increase in electricity consumption due to industrial activity and DC. Lastly, RP4 coming. Increase in electricity tariff?

China Steel is flooding the market. Local steel manufacturers in Australia, Canada, Indonesia and even India are complaining about it. They complains the dumping from China Steel where they are using the government subsidy to gain competitive edge. Not sure how long this will go on and hopefully the Chinese government will tighten it soon just like they tighten the EV market where manufacturers claim subsidies and tax benefits producing millions of EV cars but none of them are sold.

No bad news? Whole world is talking about the possibility of WW3. With the escalation of war in the Middle East and US & Russia taking sides, you better hope some nuts dun press a button and launch a big A-missile.

@YieldSeeker,
Not yet but they are building a HRC mill that the initial completion date is on Sept'24. It was shared in their last AGM and you can find it in their 27th AGM meeting minutes under section 13. Q&A. If they successfully build the HRC mill, making them the only 1 in Malaysia, I believe this will be a game changer for the company. Unfortunately, it was not mentioned in their past 2 quarterly reports or their Analyst presentation.


https://htgrp.com.my/agm-egm/

If anyone is working in Eastern Steel, it would be great if you could update them on the progress of the Eastern Steel HRC mill. I think the HRC will be the only silver lining for ES and hiaptek. There is no doubt that China is dumping steel, and some said it is selling below production cost, but such a model can sustain for how long? Furthermore, the increase in freight charges and the long port clearance time due to port overcrowding, fluctuation of HRC and steel price and currency will be an advantage for the local production of HRC. The consumption for local HRC is 2 million tonnes annually, and if ES HRC is commissioned, it should easily consume 75% of ES 2.7 million steel slab production and Hiaptek steel consumption in 200 tonnes per year. Hence, ES production should be easily absorbed. 

That is why I'm particularly interested in ES HRC mill progress. Megasteel HRC failed and was bought over by Lion Steel, and they tried to revive it in 2018, but then it failed again. Hope ES can successfully produce HRC for the local market.

I believe the selling pressure is due to uncertainty in the US and world economy. if not mistaken Jindal steel (India) recently announce QR with increased revenue but decreased PAT due to compressed margin. Furthermore, there is news that 40 of China bank have close down (absorb but larger banks). Due to all this uncertainty, many are taking off money and stay sideline.
Well, you can see this as a opportunity to buy at cheaper so that wait for the boom cycle or follow the trend to be safe.
I heard from many contractors that economy is indeed not so good but there is plenty of work out there. Only problem, many don't take to take up the job due to payment issues. Furthermore, the received news that construction material such as cement, steel will have another 10% to 15% increase by October. I'm not sure how true is that
but the contractors says their supplier asked them to factor the increased into their project bidding.

The management has set to archieve RM 2Billion revenue by 2027. I wonder how achievable is this target.

@Maxpower,
Thanks for sharing the information.

@Maxpower, That was my thought as well. Furthermore, their property venture is mostly in Kedah as they JV with state government to build commercial lot. I was wondering what is the demand like for commercial property in Kedah?

Good things is it is building a strong base between 0.48 to 0.50. Once the foundation is strong enough, it is time for it to leap to higher ground. Period between 1 to 5 months to go reach 0.80c

They trying to copy scientex and this was also briefly mentioned in their AGM (of course without citing scientex). Scientex has been successful in property. In fact there are few quarters that the property performed much better than their plastic business and helped to maintain the company earnings.

ESOS is another down factor for this counter. The constant conversion of esos dilutes the earnings.

Many construction company like IJM, Suncon & Gamuda has went up alot especially Gamuda. Some commented that it is due to the DC hype that currently everyone is talking about while others are speculating that mega project will be announce soon. Gamuda uptrend is as if it is on steriod for the past few months and constantly breaking new high. If the later is true, then construction material counter should be the next to follow.

The future FOB China price of rebar and HRC is between RM 2300 and RM 2450, but I am unable to find the price of billets or slabs. I estimate that steel slab is less expensive and based on the analyst's presentation, the production cost for Eastern Steel  is roughly RM 2430. I'm not sure how much freight charges cost, but I believe Eastern Steel's production costs are very competitive Futhermore, import good have the risk of FX fluctuation and charges. One of the reason they able to manage the cost is is they have their own power plant which cater to 90% of their needs and they have a conveyor all the way from the port to transport their raw material and product. This will be a big help especially with the rise of diesel.

Start next year ES will distribute 30% profit as dividend. If Hiaptek implement the same dividend policy, it will be 4c. It is about 8.5% DY as current price. Hope the management will look into it holistically

I be using the current PE and target somewhere RM 0.80 to RM 1. I will wait till end December to see their update on the HRC. That is the moat of the company. I can't wait for the next AGM actually.

I have a look again on HTVB analyst report over the weekend and based on Estern Steel performance review. This is not a buy or sell call as there are assumption in my calculations and there is flaws as well. Anyway:


Revenue = RM1,743.7 billion
Production volume = 621.1 kMt
Therefore 1 Mt cost = RM1,743.7mil / 621.1kMt = RM 2,807


Annual production capacity = 2.7million MT
Let assume 90% production as per current quarter = 2.7mil x 90% = 2.43mil MT
Annual revenue = 2.43mil MT x 2,800 = RM 6804 mil


Gross profit margin is 13% = RM 6804mil x 13% = 884.52 mil
Can I assume Net profit margin =10%? = RM6804 mil x 10% = 680.4mil


Hiaptek percentage in ES is 27.3 and therefore = RM 680.4mil x 27.3% = RM185.75 mil


EPS (from ES alone) = RM185.75mil / 1747 mil (NOSH) = RM 0.106
EPS from Hiaptek = RM 0.12

Using current PE of 8, it should be around RM 0.96
If you think this is growth stock, it deserve a PE of 10 which will be RM 1.20

I think I'm taking very conservative calculation because the Gross profit margin should be higher as the production cost should be much lower when all their auxiliary facilities are in full operation and the GPM will be even better if they produce HRC. If I assume 13% due to HRC and operation improvement, the EPS is 13c to 15c. As for Hiaptek business, their EPS might be between 1c to 1.5c.. But at the moment, I'm just using the figures provided in the corporate presentation.

I know there are concern on the steel price has drop alot but raw material price has drop in tandem as well. For the trade war, ES only supplies 11% to US. Furthermore, product production follow country of origin. So i believe no impact. Will Hiaptek price drop lower? I don’t know but to me, i think steel price might have bottom and the world is into recovery. Many countries are building infrastructure. Malaysia alone will be rolling out mega project and with data centre hype, i believed steel will turn around soon. I would like to suggest you have a look at the hiaptek 27th AGM minutes & report. It given me a very good insight into Hiaptek operation on how the company addresses the issue price dumping. Below is the link. Again, i don’t have insider news and I based on available information on net. I hope this helps. Happy investing.

https://htgrp.com.my/agm-egm/

@PuaQW91, Thanks for sharing the information.

Is it just me or everyone shared the same feeling on the spamming on this forum? I thought the purpose of the forum is to share useful information. I don't need to know your constant buying or selling of the stock. You don't see me go telling everyone that I'm holding 5million+ units of this stock because i don't think anyone will benefit from this information.
Oh well, maybe it is just me. Anyway, I guess this is called freedom of speech and wish everyone all the best and make money here. I guess i will visit here less unless there are more constructive sharing rather than merely sharing individual imaginary buying and selling of this counter.

HTVB release corporate updates for their last Q. Kudos to their management for their transparency and prompt update. I like this type of management and I hope more company will do so. Key take away from for me is that they managed to get 90% utilisation by end quarter. Meaning they only get 90% from 1/3 quarter but next QR, they should have 90% utilisation for the full Quarter.
I was looking forward to some news on the HRC but it was not mentioned at all. Anyway, the management shared that their will be more positive outcome and maybe they will shared more when the time is ripe. Furthermore, HRC is not due to complete by Oct. December QR will be an exciting report to look forward to

"By quarter-end, we successfully utilised 90% of our new 2.0 million MT blast
furnace capacity and completed other auxiliary facilities. As a result, we
anticipate significant revenue growth and notable cost savings from
economies of scale in ESSB, expecting more positive outcomes in the coming
quarters barring unforeseen circumstances."

https://htgrp.com.my/corporate-presentation/

@ Titan @ Seekundervalued. Thanks for sharing the information.

If they successfully operate their HRC, making them the only 1 in Malaysia, i guess 80c shouldn't be a problem. According to report, each year we import about 2000 metric ton on HRC and that is equivalent to RM 6 billion. Assuming ES can capture 50% of the market share with their new HRC mill, it is about RM 3billion. I'm not sure what is the current HRC price now but 2 years ago, HTVB MD did share the projection of production cost and estimated selling price and at that time he was saying with the new blast furnace and the power plant, their production cost as low as RM 2000 while HRC can be sold around 2750. I believed this has not include administration cost. For my own simple estimation, conservatively, if the PAT is around 20%, that will gives about RM 600 million. HTVB shares in ES is 27.5% = RM 165 mil per annum which is about EPS of 10c per year. Hence, i would assume an EPS of 13c to 15c from Hiaptek and ES. If they established a 30% dividend policy, that will gives about 4c. Anyway, this is my personal projection and wishful thinking..... @^_^@

I thought tksw sold all at 0.465. Still got so many to sell? @^_^@
Anyway, you don't need to answer all of us. The most important is as long you making real money and you are happi.....

@Lee.....i do hope you are right. May your prediction come true......@^_^@

Seem like there is strong buying support at 0.465. It is a good sign

I'm more a FA person than a TA person but seems like the indicator all showing breakout. Is seems like the bull is still in the early stage. Any TA expert here?

Hi Alpha,
I like to add two more reasons.

d. Their HRC plant will be completed in Oct making them the only in Malaysia. I know that some might says that China HRC is much cheaper but with the volatile currency, higher shipping cost and long lead time due to shipping (Months compare to 2 weeks), ES has an added advantage.

e. ES will distribute 30% of earnings as div to HRC and this should improve HTVB cashflow and possible of increase in div payout.

Nice results. There will be more good news release by the JV. If government announced mega project at the same time, it will then be the fuel to propel this counter upwards. I still plan to hold this till 1Q next year.

They have finally uploaded the 29th AGM minutes but only 2 question asked. I guess not many people attended the AGM. If it was done online, I believed many will have participated and ask some tough critical question. Maybe that is the intention to have physical AGM instead. They shared that the venture into property due to the peers is doing the same. I think they are referring to scientex. Hope they really have the know how.

https://www.thongguan.com/agm/

I used to respect the management of the company for their commitment in publishing the minutes of their AGM and holding virtual AGMs. Not sure what has change and somehow feel that this company become less investor friendly. Kinda disappoint with the them.

I bought and will hold till 1st quarter 2025 and see how it perform. By then, most of the expansion will materialise, and the government should have announced most of the mega project.

https://www.thestar.com.my/business/business-news/2024/06/26/htvb-to-benefit-from-growing-demand-for-steel

me sour grapes? hehe...
ok...congrats to those bought 13.52.......@^_^@ ..... meow....

ohh dear, seem like dropping more. Instead of congrats for addining more.....will it turn into regret soon?

Scientex QR reported a better revenue and PAT for their packaging division. Hope Tguan will be the same in the upcoming QR

Drop due to the news that Malaysia plan to join BRIC and there is risk of US company pull out for the DC project?

Nobody consider Hiaptek? They took have exposure to steel via eastern steel.

1st jan 25 will be the end for RP3 and and began of RP4. The way gomen approach the diesal subsidy, most likely gomen will use the same approach and electricity tariff increase will be inevitable.

tksw, i do hope you are right...... @^_^@......

End of this month QR release.
The most recent QR code from Masteel, which was released on May 31, shows a 25% increase in revenue but a terrible profit margin, with high electricity costs being cited as the cause. According to the CEO of Eastern Steel, the company is 90% self-sufficient due to its own power plant. Will their profit margin be better?

Noted. Thank you for letting us know.
I guess we need to wait in a month time and see if there is any minutes.
Thanks anyway

Today is the AGM.
Hi Pua, if it is not to troublesome, do give us some update from the AGM. Thank you in advance.

Looks like Tguan is following Scientex footsteps by diversifying into property sector.

Hi Pua,
Hope you give us some update here after you attend the AGM. I'm not able to go because it is too far for me. Many thanks.

Buy and wait until Oct for the HRC mill to be operational. If the mill goes into operation as planned and any the announcement of HSR which not mistaken will be announce in Aug or Sept, will likely give steel counter a push. So, maybe come back 6 months later and see how this counter is doing.

Not sure what is fueling the rise of TNB. I only can think one of the reason is potential of tariff adjustment next year and high chances it will materialise. Because gomen has postponed once and doubt they will push it for another 2 years which will be very close to election year.

Hi Pua, Can you asked the director for an online AGM for next year onwards. Thanks.

RP 3 expiring end of this year. Wondering will the RP4 be approved. If approved, meaning tariff will increase and TNB revenue will increase but then many other things will increase as well.

Hi, Anyone going for the AGM?