Posted by enlistcapital > 2022-08-06 17:10 | Report Abuse

One Up on Malaysia’s Steel Industry

While there are many well-intentioned contents published on stock forums, some of them are simply based on writers' opinion and understanding may end up become inaccurate or mispresented, so to speak.

That being said, I do not wish to point fingers or lay blames to any parties, and I hope whatever I shared in this article could brighten up our reader’s mind.

To begin with, there are generally two types of steel industries player in Malaysia, namely the manufacturers and/or value add companies, and those who involved mainly in the trading and wholesaling business.

As for the value chain, the photo taken from Bulatlat had presented well on how it works.

https://www.bulatlat.com/2016/09/21/buildfilipino-developing-local-ste...

Posted by enlistcapital > 2022-08-06 17:10 | Report Abuse

Generally, Malaysia did not involve much in the iron ore mining industry, as our country’s mineral mining sector recorded a gross output value of MYR3.5 billion, out of which RM1.7 billion is attributable to bauxite and ilmenite mining (2016, Mining and Quarrying Economic Census).

And according to Trading Economics, https://tradingeconomics.com/malaysia/mining-production the mining production in Malaysia had averaged a 0.75% drop from 2011 until 2021. Hence, we do not see much iron mining activities ongoing on Bursa.

Posted by enlistcapital > 2022-08-06 17:10 | Report Abuse

While investors would generally refer “steel” prices on CNY-based rebar, which is the first search result one could find when you googled “steel prices”, flat steel and value-added products such as hot rolled coil and cold rolled coil data is relatively harder to be found. Hence, there are many misunderstood on the pricing – which is completely understandable especially for those who are new to the market.
You could also see that the application of long steel such as rebar and flat steel are much different.

Understandably, the prices for “steel” are constantly fluctuating alongside with supply and demand.

While many could argue that “steel” prices had went down from its high, the value of construction work done alone in 2022 Q1 in Malaysia had amounted to RM29.5 billion – steel, being one of the key construction materials, is poised to see an increase of demand, and at the current juncture, it is still considerably profitable for steel players in Malaysia.

For manufacturers in Malaysia, they are generally applying to a costs-plus model in terms of factoring their prices. In other words, as long as the management had been keeping a close eye on steel prices and manage their inventories well, the company should remain buoyant against the price fluctuation headwinds, while preparing rigorously for the next upcycle.

For number crunchers, we need to relook at the term “Revenue” , which obviously was made up of 2 aspects for steel companies, namely the volume supplied and selling price of the products.

In weaker steel prices time, the manufacturer or trader could rack up their volume to cover up fixed costs as well as enhance their margins, and during the steel upcycle, they could enjoy both at once. It all comes down to how well the company was managed, especially on the inventory level.

Posted by enlistcapital > 2022-08-06 17:10 | Report Abuse

Speaking of which – inventories could make a difference on the profit and loss statement, but for obvious reasons it would depend on when the goods were sold. Do bear in mind, that these inventories are not like your properties, which one could revalue to inflate its bottom line, but instead, it needs to be sold then only its bottom line can be concluded which is always tied back to the timing of sales.

Of course, for slow moving inventories and those inventories which are below its net realisable value, the steel manufacturers and/or traders may even need to impair or setting up an allowance for impairment on the books!

Therefore, I was amazed when investors are touting the idea of steel companies inflating their numbers by not doing anything on their inventories.

However, for investors, it is always about the return on investment. We all know that the stock market generally had a 6-12 months forward nature in pricing and valuation, and that would very well explain the current valuation of the steel companies. Coupled with hampered investors sentiment, there you go, low single digit PE steel companies.

It is wise for investors to normalize the company profit, and to certain extent – try to wait out for a low for companies who managed their cash flow well.

Posted by enlistcapital > 2022-08-06 17:10 | Report Abuse

Oh! Speaking of which, cash flow and debt is another commonly debated issue in the steel industry.

I think many investors may understand the basics of working capital, but not the concept of trade financing. You see, in a capital-intensive business, it is sometimes cheaper to raise a super short-term borrowing of 30 to 120 days in order to secure customers and better margins.

This is common that steel industry, or commodities related companies on Bursa had over a great deal of their debt in short-term trade financing, which is lower in financing costs, as it was prorated.

It is just sad to see that investors are injudiciously and blatantly claiming that steel makers would raise borrowings just to pay dividends to attract investors. Dividends are generally approved by the board members while for final dividends, shareholders’ approval need to be sought. The board members which also consists of independent directors must have closely monitor the cash flow of the company before approving it.

So much for saying debt-for-dividend.

I think investors need to be fair in justifying the profit and loss, as well as cash flow movement of any steel companies in Malaysia before crowning an undervalued or overvalued statement over them. It is simply irresponsible.

Remember, what is undervalued now can be overvalued in 6-12 months’ time, and vice-versa.

Cheers!

Posted by ty Y > 2022-08-09 09:51 |

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Posted by daneilchoong > 2022-08-09 11:37 | Report Abuse

keepbuying uptrend now

Posted by ty Y > 2022-08-09 23:35 |

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Posted by TanDavid88 > 2022-08-10 01:11 | Report Abuse

Kita menang million daripada Supermx di 2020.

Posted by koyokui > 2022-08-10 09:30 | Report Abuse

Upttrend

Posted by ty Y > 2022-08-10 15:29 |

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Posted by ironstockhunter > 2022-08-10 15:29 | Report Abuse

One Up on Malaysia’s Steel Industry

https://klse.i3investor.com/web/blog/detail/312o312j3i1/2022-08-06-story-h1627801129-One_Up_on_Malaysia_s_Steel_Industry

Posted by koyokui > 2022-08-16 08:07 | Report Abuse

Keep holding. Profit counter

Posted by daneilchoong > 2022-08-18 14:07 | Report Abuse

hiaptek goreng soon

Posted by daneilchoong > 2022-08-19 14:54 | Report Abuse

keep buyhiaptek target 40sen. same with esos 41 sen

Posted by Ahahah > 2022-08-22 16:59 | Report Abuse

GG for this counter.

Posted by arv18 > 2022-08-26 16:07 | Report Abuse

counters were pumped and dumped like a cheap sl*t, by otb and con you yin.

business all done - yam seng done - so nothing much left to see.

Posted by arv18 > 2022-08-30 15:58 | Report Abuse

someone (who deleted his comment), asked when this counter will go to 40sen. i answered with a statement of fact. nothing to do with hate or love you clown. hate or love has nothing to do with 1 + 1 = 2.

____________
Income
Who’s OTB?
Why you hate this person so much?
30/08/2022 3:39 PM
30/08/2022 3:58 PM

Posted by Jerichomy > 2022-09-05 15:13 |

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Posted by Jerichomy > 2022-09-06 03:35 |

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Posted by Jerichomy > 2022-09-06 03:36 |

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Posted by kamcheonghui > 2022-09-06 15:25 | Report Abuse

Today most of the counter share price moving Ann Joo, Hiaptek, AYS and other not moving. some sifu pls comments

Posted by Jerichomy > 2022-09-08 15:49 | Report Abuse

Pls read in klsebullsignal to know why

Posted by Jerichomy > 2022-09-08 22:17 |

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Posted by laburuntung > 2022-09-13 14:13 | Report Abuse

bila mau gap...ini kaunter

Posted by kamcheonghui > 2022-09-13 16:10 | Report Abuse

why malaysia stock market very bad leh? Most of the counter cannot move.

Posted by Jerichomy > 2022-09-16 00:15 |

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Posted by sharemarket21 > 2022-09-17 20:03 | Report Abuse

We are not just commenting here but to take over the room. To provide the best clue and direction when a stock had its day. To prevent the greedy and trapped scammers to take advantage on the naive and newbies supporting at the high price. It's been awhile and this price had landed. If you feel the steel will make a comeback, this is the time and hopefully the value and volume will surge one fine day. Not to forget, 15-20% is your first target. Your gain is someone loss as always.

Posted by kamcheonghui > 2022-09-19 10:24 | Report Abuse

Thanks sifu sharemarket21

Posted by Phoebe > 2022-09-19 11:14 | Report Abuse

@Jeri, Can't come to a conclusion yet. The Sifu said wait until the end of September. Who knows, by the end of the month, he'll magically pushed it to 90c ^_^

Posted by sharemarket21 > 2022-09-19 16:06 | Report Abuse

Not at all my friend. Hopefully it helps some big savings from .58 and until now. At least the windows opportunity for low price accumulation if the big boys are still kind for a short spike in near future.

Posted by leedavid > 2022-09-20 09:47 | Report Abuse

buy hiaptek indeks up 8 point

Posted by kamcheonghui > 2022-09-20 10:47 | Report Abuse

sifu leedavid sure or not. yesterday i bought 50.000 units at 26.5 and now drop to 26 sen. i will wait for 24 sen if possible i will buy. i will hold tight

Posted by Jerichomy > 2022-09-20 23:19 |

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Posted by skyjet > 2022-09-21 12:29 |

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Posted by Jerichomy > 2022-09-21 12:59 |

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Posted by skyjet > 2022-09-21 14:45 |

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Posted by bullmarket1628 > 2022-09-21 15:31 | Report Abuse

Sailang all my belongings till underwear to buy in Hiaptek at @0.25

Heng ah, Ong ah, Huat ah !

Posted by GoldenShares > 2022-09-21 15:45 | Report Abuse

Miss Universe very cheap, 0.25 only, LOL

Posted by sharemarket21 > 2022-09-21 22:32 | Report Abuse

Used to oppose during the obvious downtrend sentiment when the few greedy try to make from the innocents but buy all you want now and make sure there is a cut loss point. 15-20% return shall be the first target. Good luck prudent investors, traders and gambler or whoever you are.

Posted by sharemarket21 > 2022-09-22 00:19 | Report Abuse

Dude you follow me ? You also roasterated here ? Be careful with hard earned investment.

Posted by leedavid > 2022-09-22 09:12 | Report Abuse

indeks showing rebound good for hiaptek

Posted by onhands > 2022-09-22 18:57 | Report Abuse

where is that someone 1 year ago told keep this counter will be fruitful rewards this September ?

Posted by serbatipu > 2022-09-23 22:23 | Report Abuse

It is SEPTEMBER now and another week going to be October. Hello Old man where are you with the rewards you expect ? Suda nyanyok lupa orang tua tu.

Posted by Jerichomy > 2022-09-24 00:43 |

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Posted by TanDavid88 > 2022-09-24 12:04 |

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Posted by Jerichomy > 2022-09-24 22:58 |

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Posted by laburuntung > 2022-09-26 15:07 | Report Abuse

bad counter

Posted by BILLC > 2022-09-26 15:17 | Report Abuse

Manyak sifu dulu cakap ini counter top,,,1 ringit mau mari oooo,,,lu tau bohhhh,,,,,

Posted by onhands > 2022-09-27 19:11 | Report Abuse

Blog: Why is Mr Ooi Teck Bee’s Rm 1.16 target for Hiap Teck easily achievable? Koon Yew Yin

2021-10-24 21:48 | Report Abuse