Techfast aims big in oil trading and bunkering

There is also a profit guarantee of RM5mil per year from CCK Petroleum for a period of two years for financial year 2021 (FY21) and FY22. With the 35% stake, this translates to a net profit contribution of RM1.75mil per year to Techfast.

At the same time, the group is undertaking a proposed rights issue with free warrants, with potential proceeds of up to RM109.2mil, to finance its new venture of petroleum trading and oil bunkering business.

The group is also in the midst of disposing of its subsidiary, Techfast Precision Sdn Bhd, for RM6.1mil cash. Techfast Precision is involved in the manufacturing and distribution of specialised fasteners and related precision turning and machining parts.

Tan said the technological advancement in the assembly process of electronic products such as computers and televisions has rendered the main products of Techfast Precision obsolete with lower demand.

“Due to the declining prospects of this business, the group has decided that it is more favourable to dispose of Techfast Precision in order to pursue other profitable activities such as our foray into the bunkering space.”

https://www.thestar.com.my/business/business-news/2021/04/26/techfast-aims-big-in-oil-trading-and-bunkering

0.40

some good point from last analyst by kenanga

Techfast Holdings Bhd (Trading Buy)

• TECFAST – which is involved in the manufacturing of self-clinching fasteners, electronic hardware and precision turned parts, mould cleaning rubber sheets and LED epoxy encapsulant materials – is venturing into the petroleum trading and oil bunkering business while in the midst of disposing of its fasteners and electronic hardware & precision turned parts segment.

• The new venture is expected to bring in additional income streams to widen its earnings base from existing businesses, which raked in net profit of RM2.1m (-41% YoY) in FY December 2020.

• Following which, the group has recently secured contracts to supply fuels to: (i) Singapore-based Wise Marine Pte Ltd over 3 years (estimated at RM2.2b using prevailing market prices), and (ii) Malaysia-based Huang Fan Sdn Bhd for a period of 45 months (valued at RM540m based on current market prices).

vaccine injection need to be faster.. economy will slowly recover....

slow & steady win the race... hidden champion in rising

patience is virtue, to win at the game, we gonna play the long game

definitely hard time for TECFAST, stay strong TECFAST investors

minimum 0.40, 0.50 might be possible too

no need to worry my friend, Tecfast did not have same issue with serba

another contract in the bag, good sign for tecfast since the company is undergoing transformation right now, more deals is a good thing

tecfast gofast!

slowly collect... going for mid-long term...

consider urself lucky if u get below 0.30, thats the discount price lol

can only spilt at 0.4... will bounce back strongly this few weeks

strong support right now, might shoot back up any time soon

market still weak right now, collect cheap if you can, good opportunity happened when market is bad

0.40 is inevitable, buy while you can right now

sea of red but tecfast still perform ok, definitely someone is collecting the ticket eh?

QR coming soon? Expecting good result from last quarter

more time to accumulate more, thanks for pushing the price down

hoot9e....

i believe they will find a way to push to 0.4, collect while you can right now

come on, push more!!

buy below 0.37 then...

redesignation not resign la

Trading buy from Kenanga


• TECFAST – which is involved in the manufacturing of self-clinching fasteners, electronic hardware and precision turned parts, mould cleaning rubber sheets and LED epoxy encapsulant materials – is venturing into the petroleum trading and oil bunkering business while in the midst of disposing of its fasteners and electronic hardware & precision turned parts segment.

• The new venture is expected to bring in additional income streams to widen its earnings base from existing businesses, which raked in net profit of RM2.1m (-41% YoY) in FY December 2020.

• Following which, the group has recently secured contracts to supply fuels to: (i) Singapore-based Wise Marine Pte Ltd over 3 years (estimated at RM2.2b using prevailing market prices), and (ii) Malaysia-based Huang Fan Sdn Bhd for a period of 45 months (valued at RM540m based on current market prices).

• Technically speaking, the stock has likely bottomed out after rebounding from a trough of RM0.305 last Monday. With the RSI value reversing from an oversold territory and the DMI+ cutting above the DMI- thus triggering bullish technical signals, TECFAST shares could ride on the positive momentum to shift higher ahead.

• On the way up, the share price will probably challenge our resistance targets of RM0.45 (R1) and RM0.50 (R2), which represent upside potentials of 15% and 28%, respectively.

• We have pegged our stop loss price at RM0.35 (or 10% downside risk).

https://klse.i3investor.com/servlets/staticfile/422469.jsp

back to 0.40 range, lets go TECFAST

lol, if tecfast is one of the company listed, insider already sell all and pull down the price by now

congrats to anyone that collected below 0.33, what a bargain

not stable yet, just getting back on track, will move further more after all corporate action is complete

Tmr challenge 0.40

rebound rebound!!

By studying the chart pattern of TECFAST, one could easily tell it was on a downtrend, right? But that might not be the case. For value investor like me, I’m looking at market mispricing on value and price. Imagine this – TECFAST’s share price is performing even worse prior to the announcement. What on earth is wrong with the market?

I can only say so much on the share price movement. However, from multiple angles of studying TECFAST, this company is definitely a solid “BUY” for its current undervalued price of RM 0.405 per share!

As for now, the LSFO would be easily enjoying a premium over high sulphur contain oil. I believe the net margin would increase to 4% - 6% (double) easily based on the current global increase in demand!

Do note that in Bursa Malaysia, the only direct peer for TECFAST would be STRAITS. In my opinion STRAITS do not have huge contract on hand for now – comparatively with TECFAST who had 2.2 Billion worth of contract on hand, I think the winner is clear in this case.

What is so special about TECFAST then? Well, TECFAST had recently announced to acquire 35.0% stakes in an oil bunkering company. I’m amazed by the foresight of the management to venture into this sector even before the Suez Canal incident, which is prone to happen every time when vessels are highly loaded into the most important route in the world, where 15% of maritime activities would need to use this passage.

Following the acquisition, a wholly owned subsidiary of TECFAST had also received a MGO supply agreement from one of the industry giants in Singapore – Wise Marine Pte. Ltd. The contract sum was RM 2,222,856,000.00. To be fair, the contract would not contribute fully onto TECFAST’s revenue and most likely would be recognized under a share of associate profit. Historically, the industry was seeing a acceptable margin for costs-plus business model of 2 – 3% net margin. Now, due to the high demand for LSFO, the price gap had increased substantially.

The latest IMO 2020 sulphur cap requires shipowners to reduce the maximum sulphur contents in the fuels from 3.5% to 0.5%, which are mainly Low Sulphur Fuel Oil (LSFO) that would be in demand for them. Traditionally, this industry has been using “dirty” and cheap, but environmental damaging illegal oil. Now shipowners or operators are left with 2 choices:



1. Purchase LSFO with approximately USD 500 per MT, which is on average 60% - 70% more expensive than High Sulphur Fuel Oil (HSFO).

2. Install capital extensive exhaust gas system.


Seeing how busy the shipping industry is currently, I believe these vessels do not have the leisure to stop and install an exhaust gas system to comply with the IMO sulphur capping. The easier solution around would be purchase LSFO straight and achieve the 0.5% capping easily.

A simpler translation to the said matter is – E&E sector’s shipping activities or maritime activities is booming, and earnings would follow soon. I suspect the Dry Bulk shipping rates could recover to at least 50% - 60% of 2007 – 2008’s peak following the supply strain of vessels. But let’s be realistic, the share price of MAYBULK and TASCO had already moved quite substantially and finding a good chance to enter is difficult.

As an investor, we must always think one step ahead of the general market. Who are the beneficiaries of huge heavy shipping activities apart from ports, which we do not have strong counters in Malaysia? Once again, the answer don’t have to be complex, it would be:


Supplier of fuels for these shipping giants – Marine Gas Oil.

My Latest Value Investing Stock Pick – TECFAST (0084)

In order to be successful in stock investment, one must always be the friend of the trend. So the one question I always have in mind is – what is the next trend in the market? Based on my observation, recently shipping themed counters have some movement or accumulation activities on their shares. Company such as MAYBULK might see a huge turnaround in earnings due to market prices in Supramax and Panamax charter rates had recovered strongly.

The last time that this happens would be in the year of 2007 to 2009, where charter rates has broken through the roof – now coupled with another blockage in Suez Canal, I believe demand for container and dry bulk shipping would spike even further, and so would company’s earnings!

nothing wrong in sharing your opinion, this is not kanger and xox counter anyway

0.39-0.40 is a good price range to accumulate, just collect while you can

Too bad vivian, should have accumulate here around this price range

hahaha so many different opinion here, better be sceptical, don't take comments and spams too seriously

wow 0.395, so ambitiuos

As you can see from the share price movement, TECFAST has been trading in a tight range of 45.5 cents and 54.0 cents for quite some time. I believe investors had yet to recognize its value and due to leakage of information on the contracts the company secured and caused the share price to being manipulated by some of the "gurus". Nevertheless, the underlying profit for the company would gradually increase.

You may begin to accumulate around the support level of 45.5 cents. Any breach of the 54.0 cents might result in TECFAST flying again. Now it’s the best chance!

https://klse.i3investor.com/blogs/tbhinvest/2021-03-27-story-h1543017740-MULTIPLE_CONTRACTS_SECURED_BY_THIS_COMPANY_WHY_HASN_T_ITS_SHARE_PRICE_F.jsp

In this contract, the subsidiary of TECFAST would continue to delivery up to 6,000,000 liters each month for a total contract period of 45 months. Based on my rough calculation on MGO prices as well as monthly delivery, the MGO price should be calculated at USD 500 per MT.

However, the recent Suez Canal blockage had sent offshore support vessels (OSV) demand higher, and OSV in turn, would require MGO to sustain their business. Hence, aside from the contract itself, TECFAST is poised to benefit from the multiple contract it secured as well as the additional demand from OSVs.

MULTIPLE CONTRACTS SECURED BY THIS COMPANY, WHY HASN’T ITS SHARE PRICE FLYING?

Little does investors know that TECFAST had successfully procured another contract with a value size of RM 540,000,000.00. Similarly, this agreement was inked between a wholly owned subsidiary of the company, Fast Energy Sdn Bhd with Huang Fan Sdn Bhd, where the subsidiary of TECFAST will supply marine gas oil (MGO) to the new client.

If you are wondering who is this “Huang Fan Sdn Bhd”, they are primarily engaged in the sub-contracting for sand related businesses. Their work includes but not limited to sand barrier projects, dredging, drilling, blasting, land reclamation, marine sand, reclamation, marine construction and subsea structures. Upon further due diligence, I had founded out that this company owns several vessels and one of them is Sierra Leone OCEANLINE 5001. You may check the vessel transportation line over here.

https://www.marinetraffic.com/en/ais/details/ships/shipid:3515515/mmsi:667001391/imo:8656972/vessel:OCEANLINE_5001

Haiya don't care, will set some buy order at 0.43, hope can grab some cheap stuff

good timing to buy in? looks cheap

Something is brewing silently....