https://www.facebook.com/KLSELION/photos/a.854214074738461.1073741829.848454415314427/901330610026807/?type=3&theater' target='_blank'>https://www.facebook.com/KLSELION/photos/a.854214074738461.1073741829.848454415314427/901330610026807/?type=3&theater . . Reason for picking up *nice uptrend stock *broke all time high *Moving average healthy *MACD Healthy . . . . Strategy look for entry at 1.10-1.14 zone SL if above mention zone unable to hold . . . May the trend be with you. . . Trade Safe~
On behalf of the Board of Directors of Samchem (“Board”), AFFIN Hwang Investment Bank Berhad wishes to announce that the Company is exploring the possibility of listing its subsidiary company, Samchem Sphere JSC on the Ho Chi Minh Stock Exchange. A corporate adviser licensed in Vietnam has been appointed to evaluate and advise on the Proposed Listing.
Current proposal listing subsidiary co of samchem JSC Which mean group of director confident that vietnam income source are very considerable and stable.. next QR should be new high
Chemical oil business needed in all walks of life , sustainable business model, Vietnam population 3x of Malaysia, samchem got chance to conquer major market share in Vietnam, trading sell motor black oil also kaya lo
Recently everyone is looking at the rally of crude oil price and hoping to take advantage of it. The most obvious candidates are those who are at downstream. These include refinery, petrochemical manufacturers and storage. In Malaysia, such companies include Petronas Dagangan, Petronas Chemical and Lotte Titan Chemical. All of them are well known multinational business that play on global scale and thus are sensitive to global prices. But given their well-known brand and status, they are also commanding a high level PE range 16 - 20. And some of them don't really grow to well relative to their PE and ROE. They might have reasonable dividend pattern or policy, but most are heavy-weight that offer less opportunity to grow in term of business or share price.
Looking further, people are actively investing in HengYuan and PetronM. Both are previously blue-chip names, Shell and ExxonMobile, taken over by Chinese and Philippines companies. They are refinery that command margins from their refinery and subject to world market conditions. Given the fluctuations of crude oil prices and the downtime maintenance for their refinery, there are many unpredictable factor. The recent rally of share price relative to their business nature are quite overly justified.
The key to taking advantage of the current rally of crude oil price is to capture the change of tide. This change of tide will be able to propel companies into greater height, not just enabling them to enjoy extraordinary profit in extraordinary times, but become a next level player.
Scanning the radar, an investors' favourite comes up: Luxchem. It has both manufacture and trading divisions and been enjoying growth for the past few years. Its profit margin is high, given that it's manufacturing segment commanding a 15% level margin. But the recent rally of crude oil price might have impacted the manufacturing profit, reducing its manufacturing profits before tax from RM28 mil to RM25 mil. Given such circumstances, it might not be a suitable time to go in.
But then, another company name came up: Samchem.
Established 1989, the core business for Samchem is in Distribution of Chemicals. Samchem provide the service of distribution, bulk breaking (into drums or smaller packaging), blending of specialised chemical. Samchem represents Samchem represents the largest petrochemical companies in the business today – ExxonMobil Chemical, Shell, Petronas, BASF. Products from all these suppliers are visible in wide range of products such as paints, cars, printing inks, adhesives, agriculture, household and personal care, etc.
Samchem revenue is almost RM1 billion, with 3 main market contributors: Malaysia 50%, Vietnam 35%, Indonesia 15%. Vietnam and Indonesia are both fast growing market with huge potential given their total population is 10x of Malaysia population. This is quite significant as the company would requires to grow and capture new market given that they represent established brand. Once Samchem is able to capture a foothold in the market, it will able to maintain a top 3 position in the respective country it operate.
No matter how lucrative the potential, a business can't sustain if the condition is not favourable. Fortunately, the recent rally of crude oil price create a favourable market condition that Samchem operates in. A higher oil prices lead to higher selling price for chemicals and leads to higher revenue, in turn leads to higher profits. Evidently, its profit increased and ROE has been steadily increase from 8% to 15%. Samchem 2018 profit should be RM17 mil to RM20 mil. At 220 mil shares, this translate into 8 sen EPS or PE of 14 based on RM1.16. Given the recent steady increase of oil price, Samchem should able to maintain its profit. Also, Samchem is proposing to list its subsidiary at Vietnam. This should be interpret as a confidence in its subsidiary.
All in all, I believe Samchem is a good investment based on few factor:
1) An increasing ROE, from 8% to 15%. ROE is crucial to determine the capital efficiency of the company. Fund managers will screen company based on this indicator.
2) At current price, the dividend yield is 3%, good to receive cash to purchase more shares or at least cover interest if you have margin account.
3) With 8 sen EPS, the company PE is 14, lower PE than others big brand company but also a proxy to them given Samchem is the distributor for them;
4) The listing of Vietnam subsidiary. This is crucial as the company might finally able to realise its investment there and the subsidiary can access to capital market on its own for more funding. More firepower to support other key growing market such as Indonesia;
If you are thinking of downstream refinery, think again. Samchem is the distributor of these big brand company:
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totoro_kiosk
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Posted by totoro_kiosk > 2017-12-26 14:44 | Report Abuse
why suddenly goes up ?