Posted by Flintstones > 2016-09-16 08:05 | Report Abuse

Be greedy when 1stock is fearful; be fearful when 1stock is greedy

Posted by warmblood > 2016-09-16 08:21 | Report Abuse

Yi Stock have good point. but those who enter earlier like april and may is already earn alot.
if u just enter or going to enter then the risk is much more higher and the potential return will be much much much more lower.

I agree with YI stock point where Q3 will be lower than Q2. previously they wrote back impairment loss last year. now the inventory worth much more higher --- Annjoo.

For long term, steel price will have to depend how much effort on CHina to cut down the production thurs the steel price can maintain on this level or going north.

Posted by soojinhou > 2016-09-16 09:04 | Report Abuse

Thank you for a well balanced article. While capacity cuts in China has supported prices, it appears that the cuts are not deep enough. That prompted the Chinese government to push provincial government to be more aggressive. So if the capacity cuts are not very severe, why did steel price shoot up? Perhaps it is due to the overheating property market in China. Unfortunately, many provincial government is now introducing measures to cool the property market. Will demand for steel drop if property in China cools?

Posted by PlsGiveBonus > 2016-09-16 09:29 | Report Abuse

Don't be so mad bro
:)

Posted by ffforever > 2016-09-16 09:56 | Report Abuse

Thanks for sharing. Indeed good analysis from different angle.

Posted by bluefun > 2016-09-16 10:10 | Report Abuse

thanks for your nice sharing and overall view in Steel segment, bro Yistock

Happy Holiday :)

Posted by murali > 2016-09-16 10:36 | Report Abuse

Good to have different views instead of having crazy high tp though most steel co r trading at 3-5 years high

Posted by murali > 2016-09-16 10:40 | Report Abuse

This is certainly much better than never tell lie sifu's sky high tp basing on his 5 formula...

Posted by Yipman > 2016-09-16 10:48 | Report Abuse

so how the steel counter going next week?
i want to go for Mycron, still got hope?
need asvise

Posted by kcchongnz > 2016-09-16 11:06 | Report Abuse

YiStock,

Good analysis. It is a tough industry, although I am not sure what would be the outcome of this industry in the near future.

There is also this contemporary behavioral finance in investing, which if used properly and correctly, can also yield good outcome in investing.

I admire your prowess in detail analysis, and most of all an independent thinking mind set.


有"己"见，"明"是非，有"胆"識，莫"盲"从，有"耐"心，成功之道也

Posted by probability > 2016-09-16 12:13 | Report Abuse

http://klse.i3investor.com/blogs/koonyewyinblog/104489.jsp

he he...KYY already buy a lot CSCSTEL last week....Murali any comment?

I predict CHOO BEE (very small float) will fly next week & it will also trigger.....you know CXXXXXX.

Posted by murali > 2016-09-16 12:24 | Report Abuse

When koon koon comes out to promote,it may go up another 10-15% n then....so jaga jaga...

Posted by VenFx > 2016-09-16 12:28 | Report Abuse

Tq Yistock, to share the less revealed but important perspective.

Posted by murali > 2016-09-16 12:28 | Report Abuse

Koon koon bought it at least few weeks ago...not last week....never tell lie sifu oredi promoted it for weeks....remember:sifu n family n his dogs bought first then koon koon then his clients then rm1000 subscribers....

Posted by PlsGiveBonus > 2016-09-16 12:30 | Report Abuse

Don't miss this potential Airasia in the making again
:)

Posted by Up_down > 2016-09-16 12:32 | Report Abuse

Finally, he has come out to do promotion for steel counters. Harvesting period. wakaka

Posted by probability > 2016-09-16 12:32 | Report Abuse

Now..in response to Yi-stock article…my 2 cents:

The whole purpose of anti-dumping is to bring the manufacturers to have realistic margins....as all these while they have been suppressed. It is more like Margins are reverting to Mean now slowly.

Steel Tube segments like those in Mycron & Choo Bee are not large scale (throughput) manufacturing process like 'commodities' where the Margin is quite standard almost everywhere...and S&A cost portion per metric ton is insignificant.

They are relatively more specialized (more value added) compared to HRC to CRC making process which is just like converting CPO (Crude Palm Oil) to RBDPO (Refined Bleached Deodorized Palm Oil)....where there is possibility for the Margins to revert to mean in a shorter span of time despite changes in the Input and Output costs in the market favorably or unfavorably.

I dont see any reason why our local large throughput manufacturers (HRC to CRC) cant compete with China given a fair ground to play...while having the advantage of local presence and even more certainly with a small (%) of duty imposed on foreign CRC / HRC.

As they only need a small margin to survive.

This is certainly even more evident for the Steel Tube segments. They would have the potential to benefit even more.....as mentioned by below article.

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

If a company had survived with suppression level of RM400 to RM500 level... one can clearly see the impact of just RM100 per ton of raw material gain for plant having a capacity of 108,000 ton.

Posted by moneySIFU > 2016-09-16 12:57 | Report Abuse

Interesting, the following are not discussed or deeply enough in the article:

1. Effect of anti-dumping duties on CRC from China, Korea & Viet Nam over Malaysia CRC market
2. Local comsumption of CRC vs imported cheap CRC for past years
3. Saving in raw material mainly HRC due to closing of Megasteel
4. Chance of Megasteel to be up & running again
5. Progress and latest development of China government's effort in cutting down its steel procudtion capacity
6. China's CRC & HRC market
7. Malaysia's CRC & HRC market over all above development & effects.

While the whole article is sharing many good points to think about and many questions raised, but no further discussion on the points or questions raised.

Think as business owner who is running the steel company, especially CRC companies, you will have to dig deep on how to capitalise all advantages & positve development into the company's strengths and try all efforts to contain all negatives and competition.

Posted by probability > 2016-09-16 13:01 | Report Abuse

$$-sifu...you are the greatest:)....i am just scratching the surface...he he...

Posted by moneySIFU > 2016-09-16 13:03 | Report Abuse

It is always good to stay aside if you are not sure what would be the outcome of this industry in the near future.

Posted by murali > 2016-09-16 13:05 | Report Abuse

My 2 cents questions: Wouldnt the end users ask for discount after knowing the saving of RM400-RM500?

Posted by murali > 2016-09-16 13:06 | Report Abuse

Just like other commodity products, when price comes down then the end users will expect a lower selling price...

They can only make good extra profit from their old stocks

Posted by wallstreet82 > 2016-09-16 13:07 | Report Abuse

hi moneysifu and probability sifu,
i have been doing research on steel companies too. since we are all keen in steel stocks, shall we create a whatsapp group?

Posted by wallstreet82 > 2016-09-16 13:07 | Report Abuse

so that we may share info instantly to not miss out any chance :)

Posted by probability > 2016-09-16 13:07 | Report Abuse

murali...end consumers are always the victims...its not like they have a choice to demand for reduction...well if they did...they would not have been their customer all this while.

The manufacturer had been good damn suppressed....

Posted by murali > 2016-09-16 13:10 | Report Abuse

I still have heavy position in steel co..infact ard 70% of my investment money are still in it...but just be a bit cautious...after seeing the history of all the previous theme play (oil n gas , property, export etc), especially steel biz is kind of tough biz all this while

Posted by ooihk899 > 2016-09-16 13:13 | Report Abuse

Check out this article, I think it is very informative.
I think the major factor is the close down of Megasteel n also the price increase for the commodity beginning this year. China ia not a major factor.

http://cn.reuters.com/article/china-steel-coal-idCNKCS11K0JV

Posted by murali > 2016-09-16 13:13 | Report Abuse

Except CSCSteel and maybe one or two more which are cash rich and pays some div, most steel co's balance sheet doesnt look good as compare to export co....

Posted by probability > 2016-09-16 13:19 | Report Abuse

International Market pricing of tubes is not going to change due to local major events like Megasteel closing down.....

Posted by murali > 2016-09-16 13:22 | Report Abuse

Unless the end user has no bargaining power at all, or else as soon as they knew the RM400-RM500 savings thanks to Mega Steel close shop, they sure will make noise....solely some logical thinking

Posted by murali > 2016-09-16 13:23 | Report Abuse

In short as long as hot money is flowing in steel co the party shall continue, just like what happens to export co last year...enjoy the party and dont be the last one to stay....

Posted by probability > 2016-09-16 13:26 | Report Abuse

I dont think the buyers of Choo Bee products which are exported gives any damn how they are sourcing their raw material...their only concern is end product specification as whatever JIS or DIN or ANSI standards.

The same applies to local consumer...if they could source any cheaper tubes internationally..they would have done long time ago. The keyword here is Local manufacturers had been suppressed....as they were forced to take from Megasteel.

Posted by murali > 2016-09-16 13:28 | Report Abuse

I wish i was wrong too. Let's c how far it goes

Posted by murali > 2016-09-16 13:29 | Report Abuse

If this is true steel co shall be able to trade at PE 15-20 as long as Megasteel closed shop

Posted by murali > 2016-09-16 13:30 | Report Abuse

It will be a different ball game then

Posted by yeekarwai88 > 2016-09-16 13:31 | Report Abuse

haizzzz,why not think to another way?
discount RM400 per ton from raw material, why not discount RM100 or RM200 to end user?why must discount total of RM400?

ermmmmmmmmmmmmmmmmmm......

Posted by Lulu La > 2016-09-16 13:33 | Report Abuse

i believe if there is no price war between the industry..the steel company shud hv more bargaining power to the price...i think the most important is the market demand over the long run...

Posted by murali > 2016-09-16 13:33 | Report Abuse

Yeap. It's more on bargaining power between the buyers n the sellers

Posted by murali > 2016-09-16 13:34 | Report Abuse

It could be Rm50 to Rm500...lol

Posted by murali > 2016-09-16 13:34 | Report Abuse

At least now we talk more sense...

Posted by murali > 2016-09-16 13:37 | Report Abuse

This is brainstorming...not simply giving some skyhigh TP basing on 4-5 formulas...

Posted by probability > 2016-09-16 13:38 | Report Abuse

Devil's advocate is indeed a very important asset - just like Murali to i3...:)

Posted by murali > 2016-09-16 13:39 | Report Abuse

Lol, is that a compliment or a curse?

Posted by probability > 2016-09-16 13:41 | Report Abuse

he he....luks like a curse to murali....but i am sure all those quiet appreciates deeply.

Posted by murali > 2016-09-16 13:43 | Report Abuse

Haha, but i found yr remarks on Choo Bee does make some sense, maybe the overseas buyers are less sensitive on that as compare to domestic buyers

Posted by Stockwatch > 2016-09-16 13:50 | Report Abuse

It is precisely what I had highlighted to Wealth Wizard earlier on although his article is good.I do agree with YiStock as he had taken the trouble to dissect the components into manufacturing and trading which bares all the profit margins from each component.

The Malaysian economy is weak and these steel companies are targetting the domestic market and not export markets.

What I like to raise are some thoughts for your consideration:
The government has inked already some of the construction jobs for MRT/Lrt extention lines with the usual suspects and these contracts are firmed contracts for the next 3 years.If the cost of steel escalates due to a combination of factors like the ringgit weakness against the US dollar or the renminbi...which is happening now ..and the steel component in these infrastructure jobs could be between 25% to 35% (assumption) and if it is out of whack...you mean the steel manufacturing companies will laugh all the way to the bank and the construction players will come in with less than 7% margins ?Will these construction players go back to the government and ask for variable adjustments even before the project has yet to start?
Worse still these construction companies can approach the Chinese steel companies if the local steel players refuse to mark down their cost?
If it happens the whole steel industry will be in dire straits.

Eversendai has secured new contracts to fill up its order books.What is its costing for steel works fabrication like?Would it be at mercy to the steel players?

Eventually......everything will revert to its mean.

Posted by moneySIFU > 2016-09-16 13:59 | Report Abuse

Hi probability, I am still thousands miles away to be there yet, just a bit of luck to aware something in it only.... :)

Posted by moneySIFU > 2016-09-16 14:00 | Report Abuse

So, let's talk about business, godd question from murali.

Posted by probability > 2016-09-16 14:03 | Report Abuse

Firstly i think one needs to remove this illusive 'barrier' we have created between local & international market....

it only exist politically...and may had a small impact. You can go through Mycron's YR15 annual report to see the local demands and what capacity we have to supply locally...

so to me...it has been a free open competition all the while EXCEPT for the large major CRC producers which had been closely monitored on their raw material sourcing - to be from Megasteel.

So..its like they have a restriction on whom their Supplier has to be....but there were less restriction for their customers to buy from them.

now...the constraints on their suppliers will be removed as per their expectations and requests.... so benefits isn't that hard to see.

Posted by JN88 > 2016-09-16 14:09 | Report Abuse

What happen to PERWAJA and KINSTEL? This two brother very strong 10 years ago.