I just dont understand about some so called "investors".
Why would you even consider this counter? Why dont one even take effort to look at its earnings.
For one... negative PE...losses 5 years in a row and worsening! So what if there is some new MoU? this company has been making losses despite its RM2bil in revenue is a clear indication of its inability to manage its operational and non-operational costs (although i have not looked into their detailed income statement)... but losses extending 5 years back !!
Remember...share price is a reflection of Future dividends! Financial Management 101! Regardless of the various valuation methods out there... P/E... EPS... DCF/future growth...they all have one thing in common which is the ability of the entity to generate EARNINGS in the future. And earnings translate into DIVIDENDS (one example is BJCORP. Fantastic earnings; NCAV is few times share price ; PE extremely low among peers... but why Share price still depressed? simply becz their dividend payout is disappointing)
This case... despite Billions in revenue but still inabilty to generate profits speaks volumes. I am no expert in steel industtry and you may come and tell me about raw mat costs or its overheads etc etc etc...end of the day its the CONSISTENT EARNINGS and CASH that we should look at in a company. Only then the share price will SUSTAIN.
Stop chasing prices. Retailers were the mangsa in this stock (Same case in VSOLAR... PERWAJA...ASIABIO). this counter was clearly manipulated and the small fishes were caught high up.
Please people.... dont chase prices and be manipulated by the sharks. Yes, high risk = high returns... but chasing value that doesnt exist is plain stupidity and merely asking for trouble.
Shellhouse...i kind of agree with you but not always as sometimes doesnt not jive with share price...look at ifcamsc.....its earnings was a few million a qtr but price shot up so high...
Shellhouse views are very fair and correct, for any value and smart investor looking at mid or long term gain. Besides the above, look at their extremely high debt and their corporate guarantee of RM700M of Perwaja debt. Please check on their Bursa announcement on their debt settlement agreement with their banks in order to understand the situation this counter is in.
Somehow, still many die hard quickly jumping into the big trap on hearing some news such as signing of MOU or MOA to study this and that, but legally non binding. Remembered 100 over MOU were signed between many Malaysian companies and Chinese companies in the 1995 (Dr Mahathir visit to Beijing)? 99% of it were still MOU and nothing went into definitive agreement for implementation. Many got burnt.
This company, I remembered well, when reading its IPO, within 15min, the IPO prospectus went into my rubbish bin already. Those still having it, please re-read it. Then you should know by now why a company wanted to go for listing, why some companies de-list here and re-list other country. If you want to be an advanced super-trader in equities, then learn the charts from this stock over the years since IPO. Their kungfu getting better and better over the years. If you want to learn to be a profitable investor, you still can learn from this stock, ie learn to be "NO ACTION".
Just think that if you are a China counterpart, being a prudent businessman and investors, how would you select your investment partners ? They are so many local steel companies here, or even direct foreign china-owned steel companies which had been based and operated in Malaysia for many years. Why not others ? U believe ? MOU or make fool of you ?
Amid all media publicity and euphora on Perwaja/Zhiyuan, as stock investors, cool down and think carefully on below, as reported in Starbiz & The Edge this Saturday, (1) " It is just an MOU with no real commitment" "I don't know the deal, just an MOU, not sure a done deal yet" supposedly said by 61% owner of Perwaja Tan Sri Abu Sahid (2) Due diligence has to be done by Zhiyuan which takes at least 3 months. By then, on careful study, Chinese will find out more about how bad or good the situation Perwaja was in (3) As reported, even if Zhiyuan wants to get involved, after due diligence and signing definitive agreement, there is no real injection of "real hard cash" to settle the massive RM2.2B debts. First phase, as reported, will involve import of equipment (their old equipment evaluated at higher price to get more Perwaja share?) only to produce items on a "leased land" in Perwaja, probably under their company name. Nothing to do with Perwaja and or is addressing the huge debt issue, probably this way. Even for 2nd phase involving RM200m, it is also equipment injected not hard cash. To quote Starbiz, "will this RM300m investment in equipment enough to get operational profit to pay off the massive RM2.2B debt?". Very smart Chinese, use a separate leased land and own imported equipment to produce things while avoid getting messed up with the debt loaded Perwaja. (4) Require major creditors like banks, TNB, Petronas, etc, and regulatory authorities to approve the plan, especially on the viability of injection of merely RM300m equipment and its subsequent operational cash flow to repay them and, perhaps, massive haircuts proposed on their debts, especially after more than 2 years. (5) Continual very bad local and global market condition, including stainless and in fact all metallic commodity, and Chinese cheap imports or dumping of steel products will be a serious factor to consider. In conclusion, will not touch this counter due to very high uncertainty and risks associated as it may delisted if the scheme does not work eventually and our investment is worth a scrap paper.
With chinese investors coming in, it will be a new lease of life for perwaja and kinsteel ..this is what we hope for...they need to push up the price then contra the shares to chinese investors...
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Posted by Bilis Bilis > 2015-05-06 16:23 | Report Abuse
4.00-4.30pm...train start 0.255 to 0.200 drop 5 cents!!! cheap buy ahhhh