@madguy One-off gain is basic English. Don't know to explain it further to you.

RIP

price controlled by sharks today

Thanks for sharing! Good analysis, as always.

RIP

It's OK SuperPanda. If everyone already gotten into Masteel before they release the QR, then it won't jump anymore when it releases QR. We need people who stay on the sideline and only enter when QR is release. It's this group of people who make stocks gap up and we thank them in advance.

@Jeff Lee What does resin has anything to do with Superlon?
@RainT Why did you follow Jeff Lee and talk about resin~~?

What happened to this counter recently? Took steroids already?

This counter will report good profit. Just dumb dumb hold. Don't be swayed by sell down, don't be tempted by gap up.

Superlon's share price has fallen by 48% from its peak of RM2.92 to RM1.51 now. Consequently, its PE has also fallen to 12, which is pretty attractive. Of course, profitability is the most important factor that drives the share price.

@RainT As you have rightfully pointed out, we won't know if it's good or bad. If it's bad, it will continue to inch down little by little (Won't gap down because the market is currently having low expectation on Superlon). If it recovers and post a good result, it will gap up because it beats market expectation.

Arguments supporting Superlon's recovery:
1. Butadiene price has recovered now
2. Butadiene inventory bought previously at high price is used up in the past 2 quarters. Now, they are using the cheaper butadiene and thus lower cost.
3. Superlon can pass the cost to customers

Arguments against Superlon's recovery:
1. No clear/accurate data on Butadiene price thus difficult to estimate
2. Expensive butadiene still not used up in still in Superlon's inventory
3. Unable to pass cost to customer
4. Weakening USD may impact Superlon's earning (75% denominated in USD)

Make your choice...

For the benefit of all, here's how you calculate the share price after rights issue:
[Market price + (Rights issue price*rights %)]/(1+rights %)

Market price= 1.73
Rights issue price= 1.30
Rights %= 0.1 (or 10% because 1 for 10)

[1.73 + (1.30*0.1)]/(1+0.1)
=1.86/1.1
=RM1.69 per share

RM1.69 will be the adjusted price by Bursa that you will see after ex date.

The rights issue price of RM1.30 is a 23% discount from RM1.69.

Ssteel jumped 14% this morning after result is released. If you want bigger gains, stay strong, resist temptation to sell Masteel, and wait for its quarterly result. It will jump like Ssteel..

Does anyone know by what time will the bonus share be reflected in our account?

Thanks for your article kcchongnz. Hope you can continue writing and produce articles every now and then for the benefit of everyone in i3.

Ssteel result is out. Up 91.4%. Masteel should be good too.

This company has a lot of things going on. Hold tight.

Date Project From Value (RM) Contribution
7-Mar-17 Syarikat Air Darul Aman Sdn. Bhd. 5,391,088 2017
3-Apr-17 MyHSR Corporation Sdn Bhd 17,888,181 2017
1-Aug-17 NAZA Corporation Holdings Sdn Bhd 19,288,377 2017-2021
9-Aug-17 CCC (M) Sdn Bhd 16,500,000 2017
14-Aug-17 BBCC Development Sdn Bhd 6,429,000 2017-2021
11-Sep-17 Pengurusan Aset Air Berhad 5,087,313 2017-2022
13-Sep-17 PNB Commercial Sdn Bhd 10,000,000 2017-2022
28-Dec-17 CCC (ECRL) Sdn Bhd 82,500,000 2018-2024
17-Jan-18 CCC (ECRL) Sdn Bhd 25,000,000 2018-2026
18-Jan-18 Kementerian Wilayah Persekutuan 14,310,000 2018-2019

@Zhuge_Liang Steel players will report their quarterly result soon. Many are very confident that the result will be good due to higher average selling price. As usual, the speculators are coming now, driving the share price of all steel players, ie Annjoo, SSteel, Lionind, Masteel

https://www.thestar.com.my/business/business-news/2018/02/08/uob-kay-hian-research-retains-overweight-on-steel-sector/

KWAP sapu discount

KUMPULAN WANG PERSARAAN (DIPERBADANKAN) (a substantial shareholder) acquired 1,365,100 shares on 06-Feb-2018.

This is just my assumption with no proof, but I believe the management is issuing bonus issue because they are expecting a stellar result. As you know, bonus issue increases the number of shares and consequently lowers the EPS. However, this negative effect can be mitigated if they are reporting a high profit in the coming quarter, therefore offsetting the lowering of EPS. This is merely my belief and opinion, but it could happen.

For the steel industry, the supply factor is way more important than the demand factor. If China's cheap steel is still lying around, it will be pointless no matter how high the demand for steel is because our construction companies will just use cheap China steel. You can have all the mega projects, rail projects, hundreds and thousands of buildings, residential condo etc built but it does not mean anything to our steel manufacturers if the construction companies don't buy from them.

I noticed that most people focus only on the demand side of the equation and totally forget about the supply side. On the demand side, some argue that demand remains healthy due to a slew of mega and rail projects while others argue that property is slowing down with less residential and commercial buildings built.

While both could be true and the effects may offset each other, the optimism on the supply side does not change. Cheap steels imported from China which once killed our local steel manufacturers were long gone since the implementation of duties and tariffs. Steel price has risen to healthy and profitable level in recent times. The duties and tariffs are here to stay for at least several more years.

Another positive factor is that China remains committed to its steel capacity cut. To quote from Reuters, "China aims to meet its target for reducing steel production capacity two years earlier than planned, the industry ministry said in a statement on Wednesday, as the world’s top steel producer ramps up its years-long push to reduce excess output"
https://www.reuters.com/article/us-china-steel/china-aims-to-meet-2020-target-for-steel-capacity-cuts-this-year-warns-on-resumption-idUSKBN1FR10M

@wakarimas What Kang Yao said is extracted from SKPRES annual report. There are many voices around but I leave it to you to decide whether you want to believe the annual report or some random "sifu".

Good luck then

Down

KUALA LUMPUR: Engineering and project management consultant, HSS Engineers Bhd (HEB), is poised to emerge as a premier engineering consultancy firm in the country and in the region as it consolidates its expertise while increasing its size and scale of capabilities.

Executive Director, Tan Sri Ir Kuna Sittampalam, said with the acquisition of SMHB Engineering Sdn Bhd, the group was expected to be able to compete globally, including in India and the Philippines.

“We are looking at opportunities out there and locally we are ready to participate in the coming Mass Rapid Transit 3.

“Wherever the government infrastructure projects are, we will go because we do not choose,” he told reporters after the company’s extraordinary general meeting (EGM) here today.

Kuna, however, said the focus on the mergers and acquisitions would need to rightly and culturally complement the group’s businesses.

“We are in no hurry but we are hungry, and as Harvard Business reported, 85% of all mergers failed globally, we will not acquire if it does not fit us,” he said.

Meanwhile, its Chief Executive Director, Datuk Ir B Nitchianathan, said the group would also focus on the Building Information Modelling (BIM), which could potentially contribute substantially to the group if the government, through the Works Ministry, would enforce it in 2019.

“BIM is a big growth area and we are probably the only one that carries the in-house facility.

“So currently we are looking to find partners in this area as we want to expand further,” he said, adding that BIM was still at an infant stage of implementation.

BIM is an intelligent 3D model-based process that gives architecture, engineering, and construction professionals the insight and tools to efficiently plan, design, construct and manage buildings and infrastructure.

At its EGM, Nitchiananthan said, the company has obtained shareholders’ approval for the acquisition of the entire stake of SMHB for RM270mil.

He said the funding involved bank borrowings of RM85mil; RM89mil from private placement and rights issue; and the issuance of new shares in HEB to SMHB vendors at RM1.14 per share.

SMHB is involved mainly in the water and waste water management as well as water infrastructure related.

Nitchiananthan said after the completion of the acquisition of SMHB, the group would still allow SMHB to operate independently in the next three years to enable a better understanding between both parties’ core business.

“With the acquisition, we will expect a saving of about 5% to 10% in our non-core business,” he said.

On water business outlook, Nitchiananthan said, he was optimistic the group could tap into plenty of opportunities, including services to solve water shortages, namely, in Selangor and Negeri Sembilan.

“Overall, we are confident 2018 would be a much better year for us compare to last year,” he said. - Bernama

Read more at https://www.thestar.com.my/business/business-news/2018/01/30/heb-to-emerge-as-premier-engineering-consultancy-firm/#0ye7zVwm6C7GkU4E.99

Arguments supporting Superlon's recovery:
1. Butadiene price has recovered
2. Butadiene inventory bought previously at high price is used up in the past 2 quarters
3. Superlon manages to pass the cost to customers

Arguments against Superlon's recovery:
1. No clear/accurate data on Butadiene price thus difficult to estimate
2. Expensive butadiene not used up in still in Superlon's inventory
3. Unable to pass cost to customer
4. Weakening USD may impact Superlon's earning (75% denominated in USD)

Make your choice...

This counter is similar to Karex's fate. Since Karex reported compressed margin and lower profitability due to higher spending in marketing expenses few quarters ago, its share price has continued to crept down until today. Superlon will share the same fate with Karex if it continues to report circa 3mil npbt per quarter. If it recovers to the previous level of circa 6mil npbt per quarter, its share price will jump. Whether it recovers or fails to recover, depends on your research and analytical skills...

Trend reversal today?

Bonus issue coming... Almost certain Masteel will report very good result in upcoming quarter. What a waste if you lose your standing once people shake you a bit.

May I know why is CNY a risk to Superlon?

@SuperPanda nov-dec rainy and cold one, msia, vietnam dont use air cond.

Well... On this argument of yours, it is the same kind of weather every end of the year. That's why result is more frequently compared YoY rather than QoQ.

https://www.icis.com/resources/news/2018/01/17/10183875/asia-synthetic-rubber-makers-resist-higher-bd-offers/

This article may provide some indication on butadiene price. Peaked in Feb/Mar 2017 at USD3k/tonne and has since average USD1.3k/tonne.

Superlon reported poor result and low margin in May-Jul and Aug-Oct quarters. Assuming they buy raw material stock 6 months in advance, they will be using butadiene bought in May-Jul17 for the upcoming Nov17-Jan18 quarter.

I predict that they should have used up all the expensive butadiene in their production. Upcoming result announcement in March should be better.

Seems like it will stay range-bound above RM2 until next QR is released. If Superlon's profit margin continue to be slim, it will go down below RM2. If it recovers, it will shoot up. Whether it's the former or latter, depends on your research skill.

@wakarimas You are reading it the other way round. If USD strengthens, impact on NPAT is lower by rm30mil. If USD weakens, up rm30mil.

I have already clarified earlier that it's because they have borrowings and trade payables denominated in USD. USD weakens means they pay less.

If share price falls due to bad news or bad quarter, sell. If share price falls without reason, accumulate.

FYI, SKPRES benefit from stronger ringgit because most of its liabilities are denominated in USD. Stronger ringgit means they pay less in debt. source is from annual report.

Topped up 2.13. I invested heavily in various stocks during sell down in Q4 last year and was rewarded handsomely in December. Always top up during correction :)

This counter rarely has discount..

Dumb dumb hold until RM2.70 by first half of 2018

ehh... Rider is right. You have to buy one day before ex-date to get dividend. Sorry luckyjb for the wrong info. Hope I didn't cause you to make a bad decision...

Queue to top up at RM1.65

@luckyjb Yes. Ex 10 Jan. If you buy on 10 Jan, you're entitled.

Good article

Market laosai now.. Opportunity to top up emerges, at the back of bonus issue to be confirmed by Q1

This counter just keeps going up and up and up, no chance for any correction to top up

This counter started its engine

CIMB high volume every day. Feel like something is boiling.

@joeshare is right. Look at the crack spread... Future earnings uncertain now. GG. Run.

Yes @tankunee. Dividend is just 1c this round.. Peanuts..