Fund managers love counter with consistent dividend. When the recent quarter reported with another 1 cent dividend (date to be announced), which make Samchem paying at least 4 cents per year or 6.8% at RM0.57. On top of the two continuously improved quarters. Now everyone is rushing into this counter and I curious why there are ppl selling at 0.6x. If the share price shot up 3 days continuously with large gap, then you may have to sell to lock down your profit and buy back at lower price later when it retreat. However, for Samchem, it shot up very steadily, then rest for 3 days (to clear off those margin accounts holders), then after T3 it shot up again. This is a uptrend and should be a sustainable one. Anyway, just my 2cents, trade at your own risk.
Samchem is a good example of value trap. Although its Revenue and Net profit is at near record high, its share price suffer because of its poor OCF and increase in debts. Dividend payout through debt is not sustainable.
Also, its OCF for last two quarter was around RM11-12millions (before capital changes). Meaning Samchem is making 11-12 millions cash from its operation and each quarter, samchem declare 1 cent dividend which only took Rm2.72million from its account to pay back to the share holder. Making 11-12millions each quarter but pay Rm2.72millions to shareholder you consider not healthy??
I respect that everyone may have different view on the same report. However, what if the company is spending large sum to expand their business in Vietnam for past 2 years, then only this two recent quarters, their vietnam business is getting rewarded, that's making their CF getting better??
What I see from the CF and the report is that Samchem 1) is paying less bank interest starting last 2 recent quarters (reduced in loan) 2) vietnam business is recovering and growing 3) declare dividend every quarter (dividend never lie) 4) Cash flow is positive and healthy, making 11-12mil per quarter and paying ~2.3million bank interest every quarter. 5) I don see Samchem taking up any new bank loan.
With those information above, I personally think that the negative cashflow for pass 1-2 years was mainly due to business expansion but not the fishy things. Unless next quarter suddenly they took a new loan again without any huge improvement on their cash flow or venture into new market.
big boss is buying in until holding more then 45% shares showing samchem is good to invest and history show that when his family buying ,share price will shoot
You are saying that expand business do not need to pay rent? salary and marketing and administrative expenses? When Samchem venture into Vietnam, they spent a lot to in marketing.
shpg22, everything in the report may be right or fake. We as an outsider can only guessing. As from your previous posts, you only keep emphasize on History of past two years data, but tend to ignore samchem is doing well in the recent 2x quarters. FCF and OCF(only become negative cause they paid off their bank loan, which is good) both are positive.
Last year, samchem business and CF are not looking good, that's the reason why shareprice was down from RM1.2 to 0.53 at one point. However, due to the recent good quarters, the shareprice had climb from 0.5x to 0.7x. You may just wait for two more quarter reports for you to cross check the yearly CF or business performance, but remember at that time, even you decided to buy in, you have to pay RM1+ as many ppl already act way ahead of you while you are so conservatively waiting for the green signal.
G-boy, it is the cash flow per quarter before "changes of working capital". Another 1 cent was announced together with the report but date to be announced later.
bear118, no body should actually give any buy/sell/hold call in i3 forum. We will share our information and you guys should judge based on your own. Do some homework or paid some tuition (losing money after each mistake), then only you will gain your own confidence and knowledge.
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striker888
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Posted by striker888 > 2019-11-18 15:57 | Report Abuse
So new TP 1.0? Ha-ha