Posted by resilient911 > 2016-09-13 21:51 | Report Abuse

wealthwizard did a good post...salute....
it is not easy to make metal vibrant..
looks like your metallic post already magnetized most of the metal peers...

good job...

Posted by WealthWizard > 2016-09-13 22:55 | Report Abuse

Thank you, resilient911

Posted by lavenderong > 2016-09-14 12:06 | Report Abuse

Thank you for the explanation. Understand a bit more abt the steel industry.

Posted by WealthWizard > 2016-09-14 12:30 | Report Abuse

Thank you, KLCI King & lavenderong

Posted by WealthWizard > 2016-09-14 12:33 | Report Abuse

I guess no many people realise the powerful effect of Anti-Dumping Duties. Thank you again, KLCI King.

Posted by gthhh > 2016-09-14 13:41 | Report Abuse

wow wealthwizard, i think this is a damn good article leh, clear cut and detailed.. with articles and explanations

Onz la! thumbs up

Posted by probability > 2016-09-14 13:51 | Report Abuse

Actually THE SINGLE MOST POWERFUL information... is shown below:

(affects all the counters above.....note that the Forward 12 months Earnings caclculated above is before the Megasteel closure).


According to Choo Bee CEO Mark Tan, Megasteel will normally charge RM400 to RM500 premium per tonne for HRC over international prices.

http://www.klsescreener.com/v2/news/view/81555


Choo Bee hopes for cheaper input to resume export

TheEdge Mon, Jun 13, 2016


This article first appeared in The Edge Financial Daily, on June 13, 2016.

KUALA LUMPUR: Choo Bee Metal Industries Bhd is among the beneficiaries of the government’s decision to knock down trade barrier for imported hot rolled coil (HRC) in the downstream segment.

The Ipoh-based flat steel product manufacturer had to stop exporting hollow and gas pipes to the United States, Australia and the Middle East in 2009 as the locally sourced HRC, which is its key raw material, had weakened the company’s competitiveness in the international market due to high input costs.

“We can’t export when we purchased raw materials from Megasteel [Sdn Bhd]. If our raw material prices are cheaper, we will be more competitive in terms of pricing,” the group’s chief financial officer Mark Tan said in a phone interview with The Edge Financial Daily.

Nonetheless, it is a different scenario now for Choo Bee after Megasteel, a 79%-owned subsidiary of Lion Corp Bhd, has suspended its production again since March this year due to financial and technical issues.

But how long will this situation last, most industry players, including Choo Bee, have no clue to that.

Tan opined that, based on Megasteel’s current financial situation, it could last until the end of the year or even longer. However, he pointed out that once Megasteel resumes operation, Choo Bee will still source from it if the prices are deemed reasonable.

According to Tan, Megasteel will normally charge RM400 to RM500 premium per tonne for HRC over international prices. Raw materials are Choo Bee’s biggest cost, which accounts for about 85% of the group’s operating expenses.

As of now, the group has started to source 80% of its raw materals from other Asian countries since Megasteel, the country’s sole HRC maker, has stopped production. This may in turn help Choo Bee resume its export business to the US and Australia after the third quarter this year, according to Tan.

The group also plans to allocate about RM20 million to expand its capacity for its main factory Pengkalan plant this year, which includes adding new production line. Total output is expected to increase by 20% when the new line is completed by 2017.

“We are upgrading and streamlining production processes to enhance production efficiency for our future growth,” he said.

Choo Bee’s current capacity could produce up to 9,000 tonnes a month when supply of raw materials is available. This works out to be about 108,000 tonnes of output a year.

With an additional tube mill line, Tan expected output to increase by 2,000 tonnes per month or 25,000 tonnes annually.

Tan, however, remained cautious about the group’s financial year ending Dec 31, 2016 (FY16) outlook, as steel prices remain volatile and stiff competition is squeezing margin.

Choo Bee achieved a net profit of RM2.85 million for the first quarter ended March 31, 2016 (1QFY16), decreasing by 27.04% when compared with RM3.91 million in the previous year. Its revenue declined 30.47% to RM100.74 million from RM144.89 million in 1QFY15.

Steel prices that have come off again recently are also Tan’s concern. He foresaw steel prices to drop further after the rebound in recent months as supply levels remain high from idle capacity.

“Thus, we need to manage our cost, and make sure we are competitive in terms of raw material pricing,” he added.

Other than the resumption of export markets, Tan saw the government water pipe replacement project, which will be rolled out this year, as another potential earnings driver for Choo Bee.

Based on historical record, Tan estimated the government’s water pipe replacement project could provide a boost of about 30% of Cho Bee’s revenue.

FY15 was not a good year for Choo Bee. Its net profit halved to RM6 million. Besides lower average selling prices compressed profit margin, the group was also hit by unfavourable foreign exchange rate and impairment loss.

However, Choo Bee has a healthy balance sheet which has the attention of some fund managers. As at March 31, the group’s cash balance stood at RM62.93 million against borrowings of RM2.1 million. The rather big cash coffer has enabled Choo Bee to regularly declare dividends. Choo Bee declared a single-tier dividend of four sen per share for FY15.

Choo Bee’s share price staged a mild rally in March in tandem with the spike in interest in steel stocks in the past three months. Its share price climbed to a five-month high of RM1.61 in mid-April from RM1.34 in early March.

Posted by 股海無涯 > 2016-09-14 13:53 | Report Abuse

appreciate this detail analysis

Posted by WealthWizard > 2016-09-14 15:14 | Report Abuse

Thank you, gthhh & 股海無涯

probability, thanks for sharing

Posted by WealthWizard > 2016-09-17 14:14 | Report Abuse

See something before many others see, know deeper before many others aware, look further when many others still look here & there, you will earn more than many others.

Try to look up to everyone that talk positive & negative, judge yourself, don't blame anyone if you don't get it.

Opportunities are always for those who are ready AND have ability to grab it.

Posted by Jingyang > 2016-09-21 13:25 | Report Abuse

Thank you for the sharing ,appreciate this alot =)

Posted by smartrader2020 > 2016-09-22 23:24 | Report Abuse

http://klse.i3investor.com/blogs/discoverychannel/104895.jsp

Posted by WealthWizard > 2016-09-23 11:40 | Report Abuse

My new article:
EKOVEST: Doing Great & Ready To Shine, Are You Ready? (Part 1)
http://klse.i3investor.com/blogs/wealth123/104926.jsp

Posted by smartrader2020 > 2016-09-23 15:12 | Report Abuse

http://klse.i3investor.com/blogs/wealth123/104163.jsp

Posted by bukithot > 2016-10-15 13:32 | Report Abuse

superb article with fact-based projection, very convincing! well done WealthWizard master. Looking forward to reading more of your articles!

Posted by moneySIFU > 2016-10-16 00:45 | Report Abuse

hi bukithot, long time no see, how are you?

Posted by WealthWizard > 2016-10-17 16:16 | Report Abuse

China CRC price has increased 3.4% since my my first article was published on 5/9/2016, the price was RMB3,480 now it is RMB3,597.

Bright Future for CRC Steel Producers: CSCSteel, Mycron, Eonmetal & YKGI (Part 1)
Author: WealthWizard | Publish date: Mon, 5 Sep 2016, 11:02 AM
http://klse.i3investor.com/blogs/wealth123/103741.jsp

Posted by moneySIFU > 2016-10-21 01:19 | Report Abuse

China CRC price continue to climb due to increase in car sales in China

2016-10-20 - 3716.67
2016-10-19 - 3681.11
2016-10-17 - 3621.11
2016-10-05 - 3508.89
2016-09-10 - 3485.56
2016-08-22 - 3421.11
2016-07-20 - 3111.11
2016-06-23 - 2950.00

http://www.sunsirs.com/uk/prodetail-318.html
http://www.100ppi.com/vane/detail-318.html
http://klse.i3investor.com/files/my/blog/img/bl2751_crc_price_in_china.jpg

Posted by moneySIFU > 2016-11-05 07:18 | Report Abuse

China CRC price continue to climb due to increase in car sales in China

2016-11-04 - 4013.33
2016-10-05 - 3508.89
2016-09-10 - 3485.56
2016-08-22 - 3421.11
2016-07-20 - 3111.11
2016-06-23 - 2950.00

http://www.sunsirs.com/uk/prodetail-318.html
http://www.100ppi.com/vane/detail-318.html
http://klse.i3investor.com/files/my/blog/img/bl2751_crc_price_in_china.jpg

Posted by probability > 2017-05-11 23:10 | Report Abuse

so much of information here....with hidden treasures.