Posted by Risk Rider > 2017-04-18 11:38 | Report Abuse

May be interesting to know what is happening in China

中国粗钢产量创新高．价格从三月高峰3,753跌至今天3,333

https://klse.i3investor.com/blogs/shareshare/120932.jsp

Posted by Hunger > 2017-04-18 11:46 | Report Abuse

dropping....

Posted by MrPauper > 2017-04-18 11:46 | Report Abuse

@Hunger, as far I am concerned, PMETAL's price has increased from RM1.70 as of beginning of January to RM2.76 as of now, generating a return of RM1.06 or 62%. Therefore, I am not sure why you mentioned that you are tired of waiting for the price to increase. With due respect, perhaps you are one of those jumped in late and failed to realise that the counter will factor in any positive circumstance in 3 - 6 months in advance.

Regarding ANNJOO and SSTEEL, SSTEEL seems to be lagging behind is due to its historical loss which creates doubt in the mind of public including you. Besides, the counter is less liquid in comparison to ANNJOO which is definitely more favourable to investment banks so that they can earn more remisier fees for bigger transactions and in order to sell their call warrants which I believe will be issued soon (in fact one already issued today).

There are always 2 sides to a coin, SSTEEL being illiquid and overlooked by public now, when it turns profitable for full year coming June 2017 and starts to be noticed by others, it will rise with a huge leap.

Meanwhile, for all the publicity being placed upon ANNJOO by investment banks, I hope that the counter will generate sufficient return to reward the public and speculators. Otherwise, it will be huge dump for the late comers. Having said that, hopefully you are not one of them as it can be either described that ANNJOO is overvalued now or SSTEEL is being undervalued.

If you have done your homework, you will notice how ANNJOO performs in relation to SSTEEL for the past 2 quarters. Anyway, good luck to you !

Posted by MrPauper > 2017-04-18 11:48 | Report Abuse

By the way, Hunger, you really does not know the size of SSTEEL in comparison to ANNJOO.. Your statement gave me a good laugh

Posted by MrPauper > 2017-04-18 11:53 | Report Abuse

One last thing, when there are call warrants being issued, the counter will be more volatile as it is more prone to pump and dump in order to sell the call warrants and also to avoid the call warrants being settled for premium in cash by investment banks. Be prepared for a roller coaster ride in ANNJOO from today onward.

Posted by Hunger > 2017-04-18 12:12 | Report Abuse

we will see once ssteel stagnant for this month. hahaha

Posted by MrPauper > 2017-04-18 12:20 | Report Abuse

I don't doubt nor deny that SSTEEL might face limited or even stagnant growth in term of share price this month. What I see is beyond end of this month, not merely speculating on 1 - 2 months time like what you used to do in PMETAL

Posted by Hunger > 2017-04-18 12:24 | Report Abuse

sure sure,wait for 3 years then.no problem for me.like i said,i dont care.u can cry all you want,cos what i said is the truth.thats why u are overreacting.am i right?

Posted by probability > 2017-04-18 12:30 | Report Abuse

From risk rider' presentation..i cant imagine how fantastic the coming quarter results going to be...

since iron ore price had dropped...its raw material price is going to be super cheap going forward.

The most mind boggling fact is that its current EPS was a result of its Gross profit margin barely matching the duty level of 13.5%...(that is the safeguard margin! - the bare minimum one can expect).

Thus, dont think it will be difficult to maintain an average of 20% GPM level going forward for the next 3 years... 20% GPM = 13% Net profit margin. Current Net profit is 5%.

5% to 13% Net Margin, that is a whopping 140% increase from its current bottomline (EPS of 8.67 currently will shoot to 14 cents).

Posted by gwansoo > 2017-04-18 12:34 | Report Abuse

FYI, only AnnJoo utilizes Blast Furnace which uses iron ore as its raw material. Others are using Electric Arc Furnace which uses scrap metals only as its raw material.

Posted by probability > 2017-04-18 12:36 | Report Abuse

iron ore price dip indirectly benefits SSteel...will brief more on the process later.

Posted by gwansoo > 2017-04-18 12:36 | Report Abuse

Waiting for it.

Posted by probability > 2017-04-18 12:54 | Report Abuse

wait a min..correction on above:

140% increase in Net Profit due to rise in GPM by 7% ( current EPS 8.67, at 5% Net margin) will result with EPS per quarter of 20 Cents ( at 12% Net Margin)

Posted by gwansoo > 2017-04-18 13:31 | Report Abuse

That's a very good number.

Posted by harlem > 2017-04-18 14:23 | Report Abuse

Patient guys ! 3Q result coming in 1 to 3 weeks time. It will confirm whether hunger/gwansoo or MrPauper/probability is correct. 3Q must at least maintain last quarter profit of RM45m, then can it really move, otherwise .......

Posted by probability > 2017-04-18 15:13 | Report Abuse

harlem...the product price had risen much faster than the raw material price...results wouldn't be that difficult to predict.

now raw material price is dropping much faster than the product price..

both points to only one fact: fattening margin

Posted by lostwayinvestor > 2017-04-18 19:06 | Report Abuse

Next quarter should less than current quarter as chinese new year and less working day in feb.plus usually more contruction work in 2h of the year..

Posted by Warn3r > 2017-04-19 10:41 | Report Abuse

SProbability, MrPauper and Albukhary. You guys are really patient here explaining the same things to those who didn't spend time doing homework. I think we just sit tight and let the next QR speaks for it self.

I'm not sure why there's a need to discuss whether it's undervalued or not. The only relevant question is how undervalued it is. EPS 10 not realistic? Fine, use 8 cents. PE 8-9 too high? Fine use 7.

8 x 4 x 7 = 224

Current price is 140. It implies,

7 x 4 x 5 = 140

So it is more realistic to have avg 7 cents EPS and to have this stock valued at PE 5 given a 3-year import duty?

Posted by Stock Kingdom > 2017-04-19 11:43 | Report Abuse

Not easy to buy steel stock now, patient is needed.

Posted by Warn3r > 2017-04-19 12:05 | Report Abuse

>_<
He must have used google translate. Big Horse means Malaysia.

Posted by probability > 2017-04-19 12:07 | Report Abuse

ya..i just used google translator...

Posted by harlem > 2017-04-19 13:23 | Report Abuse

May not sustain 8 sen EPS due to:-
1. "The positive impact of the provisional safeguard duties effective from 26 September 2016 was
reduced by imports from other countries not covered by the measures ...."
2. "margin may be under pressure due to higher cost of incoming raw materials..."
(quoted from last Q report - Prospect)

Posted by probability > 2017-04-19 13:39 | Report Abuse

harlem..the report was probably made mid of Jan. Look at the steel price chart the next 2.5 months from this date.... Remember they have inventories.

Posted by andry > 2017-04-19 17:20 | Report Abuse

SS sale down last couple of months due to the fact that many big contractors hoping government will not extend the safeguard duty for rebar and they can continue to import from China. A l,ot of sale were differ. Now they have no choice but to buy from SS as safeguard duty already extend for another 3 years.

Posted by Warn3r > 2017-04-20 08:53 | Report Abuse

Andry, your point was very valid. It addressed the possible and likely decrease in volume (revenue). For a guesstimate, we can refer to the 6 quarters immediately before the most recent quarter. The revenue ranges between 585-620m. There were shorter quarter (Q1) and also quarter just before the trial import duty was put in place. But we also need to have in mind the material cost, and the steel price. And in terms of inventory, the volume of inventory and the impact of recognizing cost by FIFO.

In summary, there is a chance to not have a higher EPS than last quarter, but it is unlikely to be lower than 6 cents. (Assuming margin dropped to 4% on a revenue of c 580m.)

With EPS of 13.27 cents from the first 2 quarters in FY 2017, the next floored at 5-6 cents and the last quarter at least 9 or 10 cents. The lowest full year EPS is 27 cents.

Annjoo is already trading above PE 8. I think the PE of steel company would trend higher going forward with better prospects.

The share price is really about future prospects and less of the past. The past merely serves as an indicator of management strength/drive and as foundations to build future projections. We haven't gone into the track record of the family managing it now. And also not yet touched on the 2 years after 2017.

If the next QR shows a EPS of 6 cents, making the YTD EPS 19 cents with one more quarter to go (which would then be at least 9 cents), I wonder which direction would the market push the price from the current level of RM 1.40.

Posted by Warn3r > 2017-04-20 08:57 | Report Abuse

I'm terrible at timing. But I plan to hold for quite a while so I just buy early when the prospects are obvious but not yet bleeding obvious. Everyone plays it differently. =]

Posted by Up_down > 2017-04-20 10:23 | Report Abuse

Extracted: " FD Iskandar said the safeguard duty has resulted in a significant increase in raw material costs.

“We used to pay about RM1,700 per tonne for the smaller steel bars and now we are paying anything from RM2,300 to over RM2,500 per tonne,” he noted.

He also pointed to the price of steel bars, which used to cost an average of RM1,712 per tonne in Johor, RM1,847 per tonne in Selangor and Kuala Lumpur, and RM1,729 per tonne in Penang. However, contractors are now paying RM2,570 per tonne."

http://www.theedgemarkets.com/article/homebuyers-bear-brunt-rising-building-costs

Posted by ks5S > 2017-04-20 20:17 | Report Abuse

i think ssteel will announce good result and dividend 4 cents in the next quarter.

Posted by probability > 2017-04-23 14:19 | Report Abuse

ss should benefit too...there is large gap between local and external steel price

A CONFLUENCE of factors impacting the steel sector could result in stronger earnings for some players while negatively impacting the outlook of others.
First is iron ore prices, which have fallen by some 30% last month. This means steel producers that use iron ore as their key raw materials should directly benefit.
Another new development in the sector is the decision by the Malaysian government to extend safeguard duties on several steel products by between 11.9% to 13.4% for three years.
In the past five years, steel producers in many parts of the world have been reeling from the effects of cheap steel imports from countries like China.
Malaysia is no different as some steel plants such as the country’s largest hot-rolled-coil steel plant, Megasteel Sdn Bhd, has ceased operations last year. Two other major steel players, including Perwaja Steel, also shut down.
This is largely due to their inability to compete with the cheap steel coming from China.
After many years of discussions, the Malaysian government decided to impose safeguard duties for rod and bar steel products last year, and had recently announced that it will extend it for next three years.
The steel manufacturers may have received renewed attention following the definitive safeguard duties for the import of bars and rods.
Among them are Ann Joo Resources Bhd, Malaysia Steel Works (KL) Bhd, Leader Steel Holdings Bhd and Southern Steel Bhd.
The duties were determined to be between 13.42% and 13.9% for the first year. They will subsequently decline to between 11.1% and 12.9% over the next two years.
Analysts say that currently, Malaysian steel products for bars and rods have lower selling prices than China, without the safeguard duty.
“The local steel players are very competitive among themselves. The current capacity could support the current local demand,” a market observer says.
Maybank IB Research estimates that the average selling prices (ASPs) of bars in China are 10%-16% higher than that of Malaysia, about RM2,100 and RM2,250 per tonne before including import and safeguard duties.
“Despite the higher steel production in China, the higher ASPs there signify strong domestic demand in China, underpinned by the government-led infrastructure spending,” it says in a recent report.
It notes that the imports of bars and rods into Malaysia have fallen significantly by 31% in January 2017 from a year ago.
An industry player reckons that the Malaysian government’s safeguard measures will help to buffer local players should there be a huge slump in steel prices following a drop in iron ore prices.
“Should there be influx of steel following a plunge in iron ore prices, the impact from the safeguards could be reduced,” he said.
He points out that the decline in the price of iron ore was because China has cut its steel production.
“China is looking to cut another 60-80 million tonnes in capacity in the next five years but their domestic demand is growing, hence we would not see huge decline in global steel prices,” an executive says.
After staging a sharp recovery since the beginning of this year, the price of iron ore plunged almost 30% from its February peak.
Maybank IB says although there is limited dumping risk presently, given the improved demand in China, the safeguard duties will protect the local steel industry from any massive imports over the next three years.
The direct beneficiaries from the lower iron ore price is Ann Joo, which manufactures its products with iron ore.
Ann Joo’s hybrid blast furnace technology is one of its kind that could either use iron ore or scrap metal as feedstock.
Shares in Ann Joo hit a new high at RM2.89 this week following the government’s decision to extend the safeguard on steel imports.
The counter is currently trading at single-digit price-earnings of 8.5 times.
AmInvestment Bank says Ann Joo controls 20% of the market and that the firm’s average selling price is expected to improve with the safeguard duties until 2020.
It expects local steel demand to pick up, especially with the ongoing reform in China to cut steel capacity.
“We have raised our financial year 2017 (FY17) to FY19 net profit forecasts for Ann Joo by 12%, 30% and 31%, respectively,” it says.
Although Ann Joo could benefit from the plunge in iron ore prices, higher coal prices would offset it.
The higher price of coking coal translates into higher input costs, which is used by Ann Joo to fire up its factory.
Nonetheless, major infrastructure projects are expected to increase demand for steel products.
“There are several property projects coming into the pipeline, which would also be catalysts for the local steel players,” an analyst says.

Read more at http://www.thestar.com.my/business/business-news/2017/04/22/ann-

Posted by nicky11 > 2017-04-23 23:57 | Report Abuse

Yes, ssteel will be benefit too.

Posted by Albukhary > 2017-04-24 00:31 | Report Abuse

my humble opinion:-

Previously when Iron Ore are at very high price, both ANNJOO and SSTEEL are fighting for purchase of scrap steel (from both local & oversea), and these caused the scrap steel price increase sharply.

Now, Iron Ore price has came down, and ANNJOO start to use Iron Ore as their raw material, instead of scrap steel. In other word, the demand for scrap steel suddenly drop (as ANNJOO is big player), so scrap steel price should be soften, and SSTEEL should be easier to get more scrap steel (no longer need to fight with ANNJOO).

If you look at SSTEEL balance sheet for the last 2 quarter, you will realised that its trade payable has reduce substantially, while short term borrowing has increase substantial. It mean company has raise debts to settle its trade payable.

Why would company do that? In common sense, trade payable is interest free, while borrowing has to pay interest, so no company will raise debt to pay trade payable.

Now I know the reason, it could probably due to:-1

1) Due to the competitive environment (fight for scrap steel), SSTEEL has promise shorter payment term with its supplier.

2) At that time SSTEEL foresee US will raise interest rate and ringgit will be weakening, so SSTEEL quickly settle all its trade payable which is in USD.

Posted by gwansoo > 2017-04-24 01:25 | Report Abuse

How much scrap steel price can fall? Did you forget about lionind, master?

Posted by Albukhary > 2017-04-24 01:40 | Report Abuse

gwansoo, I mean since ANNJOO is a big player, if suddenly ANNJOO stop purchase scrap steel, then sure market got a lot of free capacity, especially for Northern Market, because Northern only got SSTEEL & ANNJOO.

Posted by andry > 2017-04-25 08:18 | Report Abuse

http://uk.mobile.reuters.com/article/idUKKBN17Q08J
29 chinese steel firm lose permit as beijing clamp down on overcapacity and pollution.

Posted by Albukhary > 2017-04-27 10:11 | Report Abuse

OMG, Tan Sri Kuek Leng Chan is in the midst of accumulating SSTEEL stock

Posted by nicky11 > 2017-04-27 11:33 | Report Abuse

Companies under Hong Leong group work quite well recently and normally these companies quite low profile.

Posted by ks5S > 2017-04-27 11:52 | Report Abuse

i think corporate exercise coming soon. Similar to Hong Leong Capital.

Posted by Albukhary > 2017-04-27 12:08 | Report Abuse

Buy before too late..

Posted by timeinvestor > 2017-04-27 14:41 | Report Abuse

TEMBAK DIA!!

Posted by leslieroycarter > 2017-04-27 16:02 | Report Abuse

Wrong move by co mgt may cause the collapse of the co , given the way the co is running, I see no future for this stock when our ringgit is strengthening but USD will b weaken by market forces not the reverse for sure.

Posted by andry > 2017-04-27 17:19 | Report Abuse

You mean Hong Leong may cause co to collapse? you must be kidding.
If you have no patient, this is not the counter for you.

Posted by yeekarwai 95 > 2017-04-27 18:46 | Report Abuse

Outstanding QR!

Posted by lostwayinvestor > 2017-04-27 18:52 | Report Abuse

http://www.bursamalaysia.com/market/listed-companies/company-announcements/5411273
wow..got dividend somemore..unexpected..superb good result..congraz all

Posted by Lvde > 2017-04-27 18:53 | Report Abuse

400% !!

Posted by Op3rs > 2017-04-27 18:58 | Report Abuse

...i was still considering this, when suddenly qr out...

Posted by lostwayinvestor > 2017-04-27 19:00 | Report Abuse

just released

Posted by probability > 2017-04-27 19:09 | Report Abuse

GAP UP tomorrow!!

Posted by probability > 2017-04-27 19:10 | Report Abuse

super happy....the price movement gave me so much doubts earlier..thank god!!!

Posted by Up_down > 2017-04-27 19:10 | Report Abuse

The company has announced 3 cents dividends. It's really out of expectation. Gross profit margin is slightly improved to 14.9%. Well done! More to come in coming quarters.

Posted by yoloisreal > 2017-04-27 19:11 | Report Abuse

wow dividend is back guys