My remiser client just sold 100 big lot of Air Asia to buy 1500 big lot HUAAN, and still have extra cash to go book a 7D6N trip to Japan with his wife.
The frenzy buying could be due partly to Sino Hua-An’s net profit of RM21.99 million in its second quarter of financial year 2017 (2QFY17) — the first quarterly profit in at least two financial years.
However, the metallurgical coke producer had warned that it had no development on regularisation plan, which it must submit to Bursa Malaysia by Dec 15 or face delisting. Sino Hua-An is a Malaysian company that produces and sells metallurgical coke in Shandong, China.
The Edge news reporting is trying to scare investor by highlighting that HUAAN has no regularistion plan and will be subject to delisting.
Q&A Session come again:-
1) Q: you guys need to understand why BURSA put HUAAN under Paragraph 8.03A of Main Market Listing Requirement? A: This is because on Year 2015-2016, HUAAN has lease it entire factory to 3rd party for 1 years, and this cause HUAAN has no operation revenue for the whole year. According to Paragraph 8.03A, a company must maintain a level of operation in order to continue to listed in Main Market. For HUAAN, since it has no operation revenue at all at the period, that why it fall under the Paragraph 8.03A.
2) Q: Will HUAAN be delisted soon due to non-complied with Para 8.03A? A: Of course NO la, as HUAAN has take back the factory and re-start its own operation since Feb 2017. Please look at last two quarter report, revenue is up to RM259mil and net profit is RM21mil, there is no reason for Bursa to delist such a good revenue and good profit company.
Commodity Sectors Price Date Coke Energy 2095.00 2017-09-05 Coke Energy 2045.00 2017-09-04 Coke Energy 1995.00 2017-09-03 Coke Energy 1995.00 2017-09-02 Coke Energy 1995.00 2017-09-01 Coke Energy 1995.00 2017-08-31
Charles, why their previous result so sucks?? is it because their china coke operation asked to stop operating? until Feb2017 resume back?
Which explain the recent surge in profit. Their Q report very positive, seems like record high result as production resume. if sustainable, then the price will only go up and up
their liability very low oh. if sustainable results, plus if their cash are real, inventory real, I am bullish loh. need to wait next quarter to see if sustainable not loh.
At certain extent it looks like HengYuan..cyclical and thanks to the current commodity price movement..but it doesnt require heavy CAPEX at least in the next few years..so cash flow should be good as long as gross profit is good
1) Q: What businesss HUAAN is doing? A: HUANN is producing Metallurgical Coke.
2) Q: What is Metallurgical Coke? A: Metallurgical Coke is one of the key material used in Steel Production, especially the Blast Furnace.
3) Q: Why HUAAN share price increase 300% in one day? A: Price increase is because HUANN posted a very very excellence profit, so market realised that this counter has been undervalued.
4) Q: Why HUANN is lost making for the past few year, then suddenly back to Profit? A: For the past few years, CHINA has too much excess capacity for steel, and this cause the steel price very very low for the whole world. When steel price low, every raw material that related to steel are not doing well, such as coal, iron ore, as well as metallurgical coke. When the selling price of metallurgical coke is low, then all the producer including HUAAN are facing loss. However, situation has change since year, CHINA government start to control the environment pollution, and cut the capacity of steel production. When steel supply decrease, steel price surge up. When steel price up, every raw material related to steel production go up as well. That why suddenly HUAAN make huge profit.
5) Q: I checked the past year record, there is no revenue generated by HUAAN, why? A: Last year, as the China Government has tighten the rules on environment control, and Metallurgical Coke price is at multiple year low, HUAAN has no choice to make a decision to lease out its production site and facility for 1 years @ RM12mil. This is why there is totally no revenue generated by HUAAN on last year. The lease was expired on Feb'17, and HUAAN has take back factory and production site, that why you start to see it generate revenue start from Mar'17.
6) Q: Is it too late to invest in HUAAN now, since its share price has go up 300%. A: If you compare the share price, yes, it is too late and too dangerous to jump in now. However, if you look at its profit, you will realised that it is still very undervalue. For example, it quarter profit is 21mil, and now its market cap is only RM174mil. If we assume HUAAN has acheived annual profit of RM75mil, then its PE is only 3 times.
7) Q: It is possible to achieve RM75mil annual profit? A: Yes, very likely based on current steel price and metallurgical coke price. If you refer to China Stock Market, many counter that related to Metallurgical Coke has their profit increased few fold, and their share price are also increase few fold already.
wow! Charles, you da man, thanks for all the info. This stock over traded, it will flush weakholders out first I guess, then rise towards RM0.40?? 0.40 is my TP for next year end. hehe.
This book is the result of the author's many years of experience and observation throughout his 26 years in the stockbroking industry. It was written for general public to learn to invest based on facts and not on fantasies or hearsay....
nekosan
3,637 posts
Posted by nekosan > 2017-09-06 09:04 | Report Abuse
to close 0.3 today