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.
Hi paperplane2016, as mentioned above, HUAAN has suffered losses last time is because the industry is not doing well and the Metalurgical coke price are too low until there is no way to cover the cost of production. This is similar to Malaysia steel industry few years ago, especially company like LIONIND where it suffered so many losses every quarter.
However, when the Industry start to change, LIONIND start to posted profit result, and its share price increase from 28 sen to 125 sen. I believe same story will be apply on HUAAN, when its Metalurgical Coke industries start to uptrend, its profitability and share will move together as well.
Remember, HUANN share price used to be at RM1.70, and now it only RM0.155, so please don;t think that RM0.155 is very high.
For me, the accumulated losses is not a big issue, as I'm not expecting this type of company to distribute dividend in the next 2-3 years. For me, the biggest concern is:-
This Is a CHINA company, so I can't 100% trust their accounting figure, so I have set a discounted target price of RM0.40 only (my original target price is RM1.00).
I bought this stock many years ago and traps long enough and soon I realized it is a china company. Just goreng will do but try not beyond it NTA. Those who buy at low can wait to unload at higher price lolz. Good luck all.
Yes, I remember it was mid-'08 and I was still slaving at my job in SG and even Sinkies were talking about this stock and so were my own family - it was that hot. But the price then was 1.30-1.50 and despite all the excitement, it stayed around that level for a while & then when down. And down & down & down... I played one round contra around July '08 when I bought & sold for a small profit around the 80-86c range but never touched it again until Aug '14 when I thought I could profit from a likely double bottom @ 15.5c. Well, it took another 3 years and more than a little anxiety before it returned to the same level I started buying. Fortunately I averaged down the largest lots @ 3.5c :D
Good history Mind sharing bro, i notice capital change ratio 4:1 during 2007, is that a bonus issue? Ermm i see still profiting during 2007 and 2008. Qr4 2008 then rhe disaster come yaa..!?
To buy the stock you need to monitor price movement all day. As the stock is up 287.5%, profit taking will start near future. The stock price is expected to fluctuate much.
As I see ....too long at the bottom without moving,suddenly rocket up due big shark oledi sapu all the cheaper price below 15 sen.....now is the battle time between small player with big shark....if you dare to take risk....''tis is the time otherwise stay away from it
The stock price was around 0.14 in March 2014 after an QR with a net profit of RM 16,179,000 was released on 27 Feb, 2014. The EPS was 1.44, then. Don't expect too much.
I admit I was deceived by the fairly OK qtr results when I started buying in Aug 2014. But the market was already anticipating a plunge in steel demand from China and so the price dropped to price in that outcome. The drop to 2c was pricing the stoppage of their factory and the possible delisting due to cessation of biz and the huge qtr losses due to writedowns.
The company has been losing $ for 11 quarters in a row and this June qtr is the first in the last 12 where it made profits, and very convincing profit too - the price of met coal has reached the highest since 2011($300/tonne) and it will probably not collapse back to 2016 lows of $80/tonne in at least a year.
Post a Comment
People who like this
New Topic
You should check in on some of those fields below.
Title
Category
Comment
Confirmation
Click Confirm to delete this Forum Thread and all the associated comments.
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....
tronx
1,172 posts
Posted by tronx > 2017-09-01 12:25 | Report Abuse
If I know huaan will reach 0.16, I confirm go pinjam loan (business loan) and sai lang this counter hehe