Hold all stake now, wait for good news and limit up share price once skin project reinstated

Skin project could be allow to continue....

buyback at 98.5sen again

selloff all at RM 1.02

buyback at 99.5sen again

sustainable above RM 1.00

selloff balance at RM 1.02

sell on strength at RM 1.00

Breakout RM 1.00 soon

add more at 94.5sen

buy prestaring on rebound at 96.5sen

The upcoming dividend 1.5 sen translates into a whopping dividend yield of 8.1%. Its strong balance sheet with RM201m net cash (7 sen/share) will allow the company to continue to reward its shareholders consecutive many more year.

buy on weakness at 18.5sen, awaiting 1.5sen dividend to be declare soon

sell on strength at 71.5sen

sell on strength 3.48 + entitle dividend 6sen

Sell on strength 1.46

limit up

strong rebound

strong rebound

Among the steel maker, only lionind is in Net cash position, others such as Annjoo, masteel, ssteel all have relative high level of borrowing and gearing. Therefore, lionind opt to better utilized its cash hoard for expansion mode, restart its previous 2 plant in Banting and pasig gudang to increase capacity volume and acquire megasteel HRC and CRC plant to expand product offering and to invest in integrated blast furnace to further increase its production yield and energy saving, resulted profit margin expansion.

In additional, lionind associate, parkson after series of business transformation, is now is its profit contributor rather than loss making dragging its earning. Future lionind is getting brighter and on expansion mode and earning growth. It is expect to deliver better EPS these year if compared to last year due to restart production on its 2 steel mill in Banting and pasir Gudang. It is also expect next year earning will further improving if compared to these year after acquition on HRC and CRC is competed end of these year.

Lion Industries EXPANSION plan that pave way for future earning growth

1. Long steel products.

A. Amsteel Mills, klang, selangor

Remark: the only steel plant continuous throughout produce rebar steel and wire rod

B. Amsteel mills, Banting, selangor.

(Remark: Amsteel mill in Banting is equip with modern Electric Arc Furnaces, Ladle Furnaces have recently restart operation in April2018, to produce high quality and higher grade wire rods)

C. Antara Steel Mills, Pasir Gudang, Johor

( Remark: Antara steel mill restarted operation last year 2017 sept, to produce steel bars and angle bars, flat bars and U-channels).


2. Direct reduce iron

Antara mill also operates a Hot Briquetted Iron (HBI) plant in Labuan which converts iron ore into high-purity Direct Reduced Iron. HBI is use as substitute to reduce the dependence on scrap as raw material for steel making and enable the production of high quality steel.

(Remark: HBI in Labuan plant mainly produce to cater for export market, earn USD denominated profit)


3. Flat steel, hot rolled and cold rolled coils. ( to start contribute end of Q4 2018 after take over megasteel assest and plant)

Lionind proposed to acquire megasteel assest and manufacture plant that is fully automated using Direct Current Electric Arc Furnace - Compact Strip Production (EAF-CSP) to produce high quality flat HRC and CRC in effort to expand steel product offering and to capitalize on current bullish price trend in HRC in global market.


4. On track in future to establish integrated Blast Furnace project with a capacity of 3.37 million tonnes capable to use raw material, iron ore which will replace scrap as the feedstock which enables it to produce high quality steel with significantly higher production yield and energy savings.

Megasteel deal with lionind is scheme arrangement mediate by Corporate & Debt Restructurining committee (CDRC) which had obtained a restraining order pursuant to Section 176(10) of the Companies Act, 1965 restraining any action by creditors pending the outcome of the restructuring scheme. CDRC was set up by Bank Negara to provide a platform for corporate borrowers and their creditors to work out amicable resolutions to resolve their debt obligations.

Megasteel is debt laiden, nil cash, it is insolvency and now under legal court protection. The creditor, lionind, in which megasteel owe RM700m to lionind, have proposed these scheme to buy megasteel asset ONLy which have NET book value RM 1.83billion, at bargain discount price for RM 538m and megasteel have to compromise in order to settle its debt obligation.

Megasteel is own by lion crop (76%)and lion diversified (24%), both control listed shareholder already delisted due to insolvency.

Lionind is buying megasteel assets/plant at huge discount and payoff its plant electricity bill in order to restart operation.

Lionind is NOT buying megasteel company, therefore, will NOT assume Megastseel company liability. megasteel will become empty shelf company will no assets backing after sold off its plant to lionind at huge discount. Megasteel will received cash payment from lionind on deferred basis and allowing megasteel to gradually repay back at 'discount' to all its creditor lionind (megasteel owe lionind as much RM 700m debt) and lender bank back.

Gamuda ---> splash take over + penang master transport plan

The main reason for such good deal between megasteel-lionind is lionind is megasteel CREDITOR in which megasteel owe lionind total RM 699m debt, therefore lionind have Upperhand and firsthand deal to bargain hunt on megasteel asset and arrange how megasteel can repay back in such arrangement in favor of lionind

Megasteel assets worth net book value RM 1.83 billion, sell to Lionind for just RM 538m and payment is base on deffer basis, The Lion Industries group is expected to pay ONLY RM132.16mil within 14 days from the date of lodgement of the court order for the Megasteel debt settlement scheme and the remaining payment shall be paid on a deferred basis. this will allow lionind to expedite and restart steel plant to full operation first, generate profit, and use such profit to gradually fully settle payment to megatseel at much later time. This in turn allow megasteel to staggering payback previous long outstanding debt back to creditor lionind and lender bank.

This is a ring fence payment scheme arrangement to eventually allow megasteel to become just shelf company, only use it to received cash payment from lionind on deffer basis and later use such cash to staggering settle debt owe to lionind, allowing it to recover back previous impairment provision.


Management’s response to Minority Shareholder Watchdog Group’s letter dated 17 November 2017

Q: As reported on page 119 of the Annual Report 2017, the Group has trade receivables due from the following two major relatedparties, Megasteel and Lion DRI which have been fully impaired in the previous year. The amount due is approximately RM700 million in the book. How confident is the Board that the amount is recoverable?

What actions have been taken to recover the trade receivables


A: Megasteel is currently structuring a scheme of arrangement (“Scheme”) with its creditors to settle its outstanding debts. The outcome would only be known upon the implementation of the Scheme by Megasteel. The ability of Lion DRI to generate sufficient cash flows to repay its debts to the Group is highly dependent on the Scheme of Megasteel, the underlying market demand, price of direct reduced iron and availability of raw materials

http://www.lion.com.my/WebCorp/licb.nsf/dbcfaa4642ae5c084825822400275bb6/$FILE/LICB_Extract_AGM2017.pdf

I think, soon or later, market will get more clarity on the lionlind-megatseel deal, which is essentially a solution scheme settlement for debt laiden megatseel to payback its outstanding debt through assets disposal in order to payback its creditor ---> lion industries and lender ----> bank

It is win-win deal for lionind and megasteel in which lionind pay first cash to megasteel to acquire its assets at HUGE discount for RM 638m. Then, megasteel payback debt RM 700m own to lion industries, maybe at 'discount' too.

In short whatever debt recoverable from Megasteel debt is NET gain to lion industires as it already in earlier make FULL impairment provision, resulted write back GAIN.

In the next Q result, Lionind will also record better earning from its associate Parkson earning as parkson have on 29 May 2018, received Rmb90 million (equivalent to approximately RM55.8 million) in respect of the Initial Compensation of Rmb100 million and the balance Rmb10 million is being withheld pending tax clearance.

Lion industries had fully impaired the entire RM699.1 million trade receivables and RM358.6 million other receivables from related parties in the previous financial year and as such would not have any further material impairment in the next financial year.

Based on reported on page 119 of the Annual Report 2017, the Group has trade receivables due from the following two major related parties, Megasteel and Lion DRI which have been fully impaired in the previous year. The amount due is approximately RM700 million in the book.

Megasteel is currently structuring a scheme of arrangement (“Scheme”) with its creditors to settle its outstanding debts. The outcome would only be known upon the implementation of the Scheme by Megasteel. The ability of Lion DRI to generate sufficient cash flows to repay its debts to
the Group is highly dependent on the Scheme of Megasteel.

Now, Lion Industries have proposed to acquire Megasteel assets and pay off its debts for total RM 638m. Such arrangement will allow Megasteel to raise cash through assets disposal at to Lionind. These scheme arrangement is important step for megasteel to monetize its assest, raise up cash and payback debt to lion industries.

In short, whatever lionind pay now cash RM 638m to megasteel to acquire its assets will eventually return back to lion industries as part of debt settlements. It will resulted significant writ-back GAIN reversal from earlier impairment provision, recover back amount owe by megasteel to lionind

Lion industries had fully impaired the entire RM699.1 million trade receivables and RM358.6 million other receivables from related parties in the previous financial year and as such would not have any further material impairment in the next financial year.

Based on reported on page 119 of the Annual Report 2017, the Group has trade receivables due from the following two major related parties, Megasteel and Lion DRI which have been fully impaired in the previous year. The amount due is approximately RM700 million in the book.

Megasteel is currently structuring a scheme of arrangement (“Scheme”) with its creditors to settle its outstanding debts. The outcome would only be known upon the implementation of the Scheme by Megasteel. The ability of Lion DRI to generate sufficient cash flows to repay its debts to
the Group is highly dependent on the Scheme of Megasteel.

Now, Lion Industries have proposed to acquire Megasteel assets and pay off its debts for total RM 638m. Such arrangement will allow Megasteel to raise cash through assets disposal at to Lionind. These scheme arrangement is important step for megasteel to monetize its assest, raise up cash and payback debt to lion industries.

In short, whatever lionind pay now cash RM 638m to megasteel to acquire its assets will eventually return back to lion industries as part of debt settlements. It will resulted significant writ-back GAIN reversal from earlier impairment provision, recover back amount owe by megasteel to lionind

KUALA LUMPUR (July 1): The Selangor state government will impose reasonable water tariffs once the restructuring of the state’s water industry has been finalised, which is soon, said Economic Affairs Minister Datuk Seri Mohamed Azmin Ali......

http://www.theedgemarkets.com/article/selangor-impose-reasonable-water-tariffs-after-restructuring-%E2%80%93-azmin

Sapura Energy Berhad (“the Group”) today announced its first quarter results for the period ended 30 April 2018, recording a revenue of RM
1,055 million, EBITDA of RM228 million and loss-after-tax of RM137 million. The Group’s E&C and E&P businesses have made positive contributions to this quarter’s results whilst the Drilling business made a loss-before-tax amidst a slower recovery anticipated in this segment.

To-date, the Group has won a significant number of contracts bringing the accumulative value in contract wins to-date to RM4.5 billion, including two contracts for its Drilling business.

The Group continues to maintain a healthy bid book that will enable its order book to grow further in view of the increase in the global opportunity funnel.

“Fuelled by the continued positive industry outlook, our growth strategy is on track. The Group has been successful in securing a significant number of global contracts since the start of FY2019. Our bid book will continue to remain healthy as we continue to compete in bidding opportunities in an effort
to boost our order book,” said Tan Sri Shahril.

“Staying competitive and resilient have been central to our success. We expect to sustain our growth momentum with the same rigour and discipline that will propel the Group to turn the corner and build a sustainable long-term future,”he added

Strong crude oil above USD 78, heading to breakout again USD 80

Shahril said this was a significant milestone for Sapura Energy in reinforcing its position in the industry, establishing its presence in Mexico and growing its E&P portfolio.

“We are proud to be the only Malaysian-owned company to be awarded during this bidding round, together with our partners.

“This is a significant milestone for Sapura Energy Group in reinforcing our position in the industry, establishing our presence in Mexico and growing our E&P portfolio,” he said.

Read more at https://www.thestar.com.my/business/business-news/2018/06/29/sapura-energy-jv-inks-contract-with-mexico-for-block-30/#zKM1AhJFBa1zuXVl.99

Sapura investment is worth of investing as its future growth prospect is promising based on openly available crude oil price and strong orderbook contract secure, ensure future clear earning visibility. Sapura on track turnaround to make more profit in the current year than last year loss making.

In year Q4 FY 2016, Sapura make significant impairment worth RM 1.5 billion provision off for its oil an gas assets due to slumping in global oil price.

In year Q4 FY 2018, Sapura make significant impairment worth RM 2.1 billion provision off for its drilling assets due to low utilization rate at 33%, below breakeven point.

All such impairment provision are Reversible if global crude oil continue recover and offshore exploration capex continue recovery

Already in sight of hope of reversal provision impairment in its drilling asset is recent Sapura manage to secure additional drilling contract. Drilling - increase rig utilization from earlier 33% to 40% after additional tender rig on contract in April. Sapura drilling division utilization rate will further improved to 46% with additional New contract from petronas and extension contract from shell, allow sapura total tender rig on contract increase to 7 out of 15, to eventually BREAKEVEN its drilling division, allowing its other two profit generating division E&C and E&P to contribute NET profit to sapura.

Another sight of hope of reversal provision impairment in its oil and gas impairment continue recovery in global brent crude oil to above USD 76, already up more than double if compared to 2016 crude oil of just USD 36

Fundamentally, the year of 2018 is UPSTREAM oil and gas industry recovery

Today is last day for first half year ended 30 June, many fund are doing WINDOW DRESSING to boosts up their fund performance.

The improved oil prices are expected to trigger an increase in of shore capital expenditure between 2018 to 2025 to meet global demand. Total
global of shore projects to be sanctioned in 2018 are projected to be around US$90 billion.

Sapura have year to date already secured RM 4.5 billion of new orders in the Services and drilling segment, resulting in a stronger orderbook position of RM 18 billion, ensuring at least 3 year earning visibility.

Sapura upcoming Q1 result for FY2019 is expect to deliver positive result underpin by

1. E&P division - higher production volume with maiden profit contribution from gas production in sk310 B15 gas field + higher selling price for brent crude oil

2. Drilling - narrow depreciation cost after massive impairement done in previous Q4 + increase rig utilization from earlier 33% to 40% after additional tender rig on contract in April

3. E&C - to rover back to positive profit due to higher progress billing as activity have picking up significantly after earlier monsoon season in Q4

4. Orderbook replenishment up to date to RM 4.5 billion, boosting outstanding orderbook to RM 18.5 billion, render clear earning visibility for next 3 year

5. More gas production from sk408 to boost up E&P division to triple next year, paving concrete fundamental for upcoming IPO listing

Sapura drilling division utilization rate will further improved to 46% with additional New contract from petronas and extension contract from shell, allow sapura total tender rig on contract increase to 7 out of 15, to eventually BREAKEVEN its drilling division, allowing its other two profit generating division E&C and E&P to contribute NET profit to sapura

Establishing trend reversal, turning to uptrend soon.

Iran sanctions could soon push oil prices above $90 a barrel, Bank of America Merrill Lynch says

“We are in a very attractive oil price environment and our house view is that oil will hit $90 by the end of the second quarter of next year,” Hootan Yazhari, head of frontier markets equity research at Bank of America Merrill Lynch, said.

On Tuesday, the U.S. demanded that all countries halt imports of Iranian crude from early November. The Trump administration’s hardline position comes as part of a broader push to try to further isolate Tehran both politically and economically.

International benchmark Brent crude traded at around $78.18 on Thursday, up around 0.7 percent while U.S. West Texas Intermediate (WTI) stood unchanged at $72.72.

Awaiting for quarter result now.....

DATO' LIN YUN LING Get Gamuda board extend his serivice as managing director for another 5year. Lin is founder and key person deriving Gamuda success and he also recently exercise his 1.5 million ESOS entitlement at RM 3.84, boosting his direct stake in Gamuda to above 3%. The ESOS price is much higher than current market price of just RM 3.22

Gamuda record breaking revenue in Q3 result, above RM 1.2 billion, but profit offset partly due to net foreign exchange loss of RM256 million. The net foreign exchange loss resulted from the loss on foreign currency translation of the Group’s overseas net assets due to the stronger Ringgit Malaysia.

Remark: the loss in foreign exchange loss due to stronger RM will be reversal back in next quarter as RM have significantly weaken recently from earlier before election RM 3.85 to currently RM 4.02

Gamuda as the Project Delivery Partner for the implementation of the Penang Transport Master Plan. The proposed Light Rail Transit; and the Environmental Impact Assessment (EIA) reports for the Pan Island Link 1 and reclamation works have been submitted to the relevant Federal Government agencies. Discussions with the relevant State and Federal Government agencies have intensified, and target to obtain the approvals by Q4, 2018.

Gamuda 40% associate, Splash, the concession holder of the Sungai Selangor Water Supply Scheme Phase 1 and 3 is awaiting the offer from the Selangor State Government on the takeover of its water assets and operations, the deadline is next month July.

Gamuda land record breaking in property sale RM 2.6billion and on target to hit record sale RM 3.2 billion supported mainly from Vietnam resilient market.

Gamuda will release its Q3 result very soon, expect record breaking profit

based on higher progressing billing from MRT2 and stronger property sale, Gamuda upcoming Q3 result should be able breakout EPS 10sen + declare interim dividend

Expect gamuda upcoming Q3 result to deliver stronger result as MRT2 underground work is expect to reach 30% completion after tunnel drive have commence in 1 Mar. The above ground in which gamuda earn 6% PDP fees is also expect to reach above 20% completion.

Gamuda land is also expect to deliver stronger profit after achieved record sale in Vietnam, Singaporeans and Australia, sale to break record above 2.5 billion

Splash offer solution is on track toward completion before deadline next month July 2018

Penang transport master plan also on track to seal agreement before deadline next 2 month Aug 2018

https://klse.i3investor.com/blogs/savemalaysia/162066.jsp

Sapura drilling division utilization rate will further improved to 46% with additional New contract from petronas and extension contract from shell, allow sapura total tender rig on contract increase to 7 out of 15, to eventually BREAKEVEN its drilling division, allowing its other two profit generating division E&C and E&P to contribute NET profit to sapura

Sapura upcoming Q1 result for FY2019 is expect to deliver positive result underpin by

1. E&P division - higher production volume with maiden profit contribution from gas production in sk310 B15 gas field + higher selling price for brent crude oil

2. Drilling - narrow depreciation cost after massive impairement done in previous Q4 + increase rig utilization from earlier 33% to 40% after additional tender rig on contract in April

3. E&C - to rover back to positive profit due to higher progress billing as activity have picking up significantly after earlier monsoon season in Q4

4. Orderbook replenishment up to date to RM 4.5 billion, boosting outstanding orderbook to RM 18.5 billion, render clear earning visibility for next 3 year

5. More gas production from sk408 to boost up E&P division to triple next year, paving concrete fundamental for upcoming IPO listing

LRT3 is well progressing

https://www.youtube.com/watch?v=hxP8rVuVTEY