The above property which has a net book value of RM203.856 million has been revalued to RM461.503 million, thereby creating a revaluation reserve after deferred taxation and minority interest of RM120.786 million for incorporation into the financial statements of Kinsteel.
If you read the audited accounts, you find that Perwaja have sold off almost all the stocks of raw materials and finished goods to generate cash to pay creditors. What else will they sell to pay the banks, or will there be any cash injection from other parties.
Reader, if stocks are sold to pay creditors, please compare the amounts of creditors and borrowing between previous year and 2014....any reductions or still the same amount?
Reader, the borrowing in latest audited account remains RM1.3B for Perwaja and RM1.8B for Kinsteel, which are more worrying. Yes, July-Sept will be more revealing, with Kinsteel in danger of PN17. Perwaja is done as it is already under PN17 and faced delisting if its restructuring plan due 23 Nov is not accepted.
Perwaja should not be delisted, now worker still received RM450 as monthly allowance , rumours says Mahathir son MUKHRIZ will give a hand for saving the PERWAJA ,since his father hv corrupt a lot of money...............fr PERWAJA
Reader, u are sharp, yes escape PN 17 because of revaluation of land and machine.... but difficult to escape under coming 2Q or 3Q results. Please look at the massive short term borrowing and its guarantee of Perwaja debt.
MickeyMouse: Noted with thx! Sigh ...Really get burned as I bought at 0.70 think no way to reduce my losses better switch to earn back my loss. SENDAI for mid to long term investment ?
The Edge (16-22 Feb 15).....Perwaja (Fundamental: 0, Valuation: 0) Kinsteel (Fundamental: 0, Valuation: 1.2)...maximum score is 3.0....... Kinsteel and Perwaja are Siamese twin due to Kinsteel guarantee massive debt of Perwaja.
Looking at the MOA, seems like they are going to build more plants to save the old ones. This is a repeat of the Eric Chia story two decades ago when he built plants in Gurun to save those in Kemaman.
The RM200 million mentioned in the MOA is way below what other steel companies spent for similar blast furnace facilities in Malaysia.
Gurun plant stopped operation already for 24 months, caused by cheap imports from China. Setting up blast furnace is more than RM200m. This is also not enough as you also need new steel making furnace to produce billets to feed current facilities in Gurun. MOA is only not a legal binding document. Nothing will happen at the end. Wait n see.
I was wondering how they got the RM200million estimate or what exactly it is for. Just to have an idea how much money is required for the MOA's proposed "installation of new blast furnace facilities and related downstream manufacturing facilities and related infrastructural work", here are the costs announced by other steel companies in their annual reports for their blast furnace projects :
Lion Diversified Holdings / Lion Blast Furnace Sdn Bhd : USD500 million
Ann Joo Resources : RM650 million
Hiap Teck Venture Berhad / Eastern Steel Sdn Bhd : RM750 million
Somebody is maintiaing the price of RM0.16 with only 200 units done last minute....So, it is not the trap. "They" have not exit. Still a good time to gamble with them. The current price (below RM0.25) is still a good bet ! (Please note Kinsteel has no fundamental at all to talk about, but it is still worth to take the bet....better than going to casino. Buy between RM0.16, Sell at RM0.25, you still have 56% profit against 12% loss (if we cut loss at RM0.14). So, it is 5x bet !
Kinsteel makes profit by deconsolidation - Kinsteel reduces its share in Perwaja changing it from a subsidiary to an associate, so with this change it wash hands off the liabilities of Perwaja and result in a paper gain???
We should focus on its net asset rather than the profit figure. Its latest NTA/share goes to RM0.47 which is much higher than the current price of RM0.15. The debt restructuring is a good move to clear the cashflow pressure and can allow the white knife to move in and focus the operations. The next issue to look for will be its Rights Issue price and the unit price of the placement amount of RM50 mil. These 2 numbers are important to access the overall stock valuation on this counter. In conclude, it is still a "safe" bet given its determination and government effort to lift up the industry.
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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....
tjhldg
27,218 posts
Posted by tjhldg > 2014-11-07 21:13 | Report Abuse
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