wahh...so fast support a'dy ah?.....i still park at 5.50 le......currently petrochem future doesn't look good la...fertiliser down, country ging toward single use plastic. More supply than demand......crude price no good.
eloo...mr philips says he did all the calculation ok. He know how much raw material cost, how much needed. He has all the numbers. U all dun doubt him. Wait for Pchem rebound to RM9.
Firstly, we look to the business itself. ? Is PCHEM sustaining plant utilisation level above industry benchmark. YES. What about the sales? While sales are dropping everywhere due to the virus, all production on hold, factories shutting down, businesses dropping, did it go down? No, the revenue of salesactually went up ( due to inventory clearance).
How about profits? Did Pchem lose money during this quarter? NO.
What happened to the profits? Margin compression due to MYR increase vs USD, Pchem clearing stock With the incoming slowdown at bargain prices. Still profitable, while maintaining 7.37% margins during the worst of times.
What is my qualitative view?
It is always an interesting question, sell more at a lower margin, or Sell less at a higher margin. In my view, if the long term demand is there and there is profit to be made, don't lose your existing customers and sell it to them at best market price. At 7% margins, they can do 4.2 billion sales in a world market slowdown, excellent! Drive the other competitors out of business into deep losses and production cuts, then when supply is cut short and demand normalizes, increase price and profits.
The qualitative impact here is this: while all the competitors are losing money and selling less, PCHEM can still make a profit and sell more.
The very definition of a economic juggernaut.
Now: will covid continue, trade war resume? I find it highly unlikely in the next couple of years. Is this a permanent condition for PCHEM, or a salad oil crisis for AMEX? I firmly believe IPIC would not have existed if the damand was not there.
Will product prices normalize? Yes I believe so, in the long run Pchem will be ok. This is probably a perfect storm, trade war+covid19+ soft supply market. But just as much, many petrochemical companies will declare huge losses, cut production and reduce supply in the wake of these factors, leading to a big turnaround when IPIC production picks up by 2021.
I know many of you may be upset and angry at the results, but bare in mind:
In this worst of times, PCHEM is still maintaining revenues, still making 300 million in profit.
I am still fully invested as I don't see anything that will affect the long term business prospects of PCHEM.
I still have a 7 cent dividend this quarter. Which come to around 238k to me, free of tax.
Which I will be using to buy more PCHEM this year at IPO PRICES.
I also have a further 10 million in unutilised margin set aside for these discount days.
But of course, sell if you want. I'm looking to buy more at cheap price
(Shrug)
>>>>>>>
management to sustain plant utilisation level at above industry benchmark. The Group expects that product prices to stabilise in the coming quarter. This is in view of supply limitation following planned regional plant turnarounds, supported by stable demand. However, we remain cautious amidst market uncertainties caused by the ongoing US-China trade disputes and the COVID-19 outbreak which can further dampen GDP growth.
can go either way huge profit has a higher probability than huge loss, imo
supermarket shelves are being sapu cleaned of food materials dun forget Family Mart also sells instant noodles and other foodstuffs which are being sapu cleaned. There must be huge profits there.........
even educated areas like Bangsar and Damansara .. the Jaya Grocers foodstuffs are being sapu cleaned until not replaceable.........
Relax ..lah PChem will not go bankrupt. It just suffer a little set back in 2019 financial year after spike in earning in 2017 and 2018 year. The earning grow will come back again. Trust the brand name Petronas . I have been holding PChem for 5years already also not worry lah...just relax and collect dividend.
Haha i3lurker, Malaysians suffered double whammy of no government and Covid-19. So people stock up toilet paper, face mask, instant noodles, canned food, frozen food and etc. Later on overstock and they will stay back home everyday instant noodles, canned food and frozen food for months to finish the stock. Many eatery businesses will go bankrupt and Bank will hold many bad debts.
But no worry, QL have the biggest Freezer in Malaysia and even Tokyo Olympic will to be postponed QL still can frozen all the foods and last for another year.
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stingray_ea
2,765 posts
Posted by stingray_ea > 2020-02-26 15:21 | Report Abuse
On 2019 Jan, stingray_ea predited dj idx will hit 30K.
Finally Dow idx hit 29 6xx this month,stingray_ea prediction is 99% accuracy.
Who dare to make this prediction ?? Only stingray_ea.
Why stingray_ea appeared on pchem counter before big drop ???? la ta li tam pong ????
pchem:
stingray_ea Wow any sifu here buy of sell???
14/02/2020 9:45 AM
stingray_ea Any shark here ???
14/02/2020 9:53 AM