Yes no doubt, Wellcall is a super quality company looking from profit margin, ROE, track record etc. But it is being priced like Hartalega. Using different valuation, the most I would pay for Wellcall is $1.50-$2.00. Im not saying this because the quarter result is bad. Wellcall will continue to do really well in the future, whether their business is impacted by O&G sector is another matter. But buying above $2.00 is likely to give you very low return over the long term. And of course, your buy price really depends on what kind of return you are after.
Very sorry to tell that I lead the friends in WELLCAL to Holland.... it's my mistake.
I was expecting the improvement of the revenue and profit from WELLCALL since the commencement of Factory 3 last year. In fact, I had a bullish bias since I have exposure to WELLCAL.
The fact is, the demand/orderbook is reduced due to economic slowdown...
____________________________________
Some information I asked my friend to obtain from AGM of WELLCAL.
1. It takes 1 to 2 years to achieve 80% commission rate of Factory 3 . 2. Factory 3 produces / improves 70% of the capacity of WELLCAL. 3. Currently, WELLCAL boss revealed that the strategy will be preparing Factory 3 first, and when O&G sector revive, then the Factory 3 will be used to generate revenue.
Moral of Story : Industry Hose is cyclical ... I will revisit WELLCAL once the industrial sector improves again.. Factory 3 should be a super revenue boost for WELLCAL during that period.
Haven't reached the end, don't know is right or wrong. Maybe next week back to RM2.90, who knows? The rewards are only for those who have 100% faith and confidence on wellcall!
sahrin, if I am not mistaken (sorry for the wrong info, If any ), air and waste command the largest revenue, followed by gas and welding and O&G.
If not mistaken, O&G got a share of 25% , but a higher profit margin. And due to latest automation and reduction of labour dependency, the profit margin changed again.
So revenue high doesn't equal to high profit , vice versa.
If I open a shop, if the profit for the past three months drop 20% but I still making profit, will I sell off the shop to other party? Or I will continue work on it. Improve it and fight for the next three months. Real investor should ask the management, their sales team... work hard enough?
it really depend on ur investment strategy... Wellcall will not be breaking the 2.80 level anytime soon until the result showing recovery in next qtr (if any)... so, if u have better option.. you may consider sell it now and jump boat to avoid opportunity lost for ur capital..
but if u have no better choice, perhaps can consider sell half and keep the rest since the dividend also not so bad la... they have excess capacity now to swallow bigger order intake if the market demand recover...
omgimnoob, your perspective is as an business owner.
My perspective , is from small time investor.
I notice a guy who open a shop. I was offered by the guy to participate in a business. Each share yields 7.45c , 8.86c and 12.45c for year 2013, 14, 15.
I was offered to buy at inflated price of 21x PER during that period. Why 21x PER? The guy paints a good picture, by telling you that factory 3 is in the making, track record and so on.
As the recovery price of the Crude Oil, now the O&G company starting to try to issue new Right's issue for expansion, or preparation works. Will WELLCAL benefit from the capex from those company ?
For those company doing export business sure will affected by forex.. Wellcall business mostly for export.. next report not really hope can be better than previous quarter report...
Wellcall Net cash position just 17.6 million.. is considered low... new factory not able to perform and still waiting for global economic recovers back.. USA and CANADA orders drop almost 100% from previous quarter...all geographical segments orders showing down trend.. is not a good sign..
Who did follows USA economic for last few months, many company in US start retrenchment and many peoples now jobless.. This showing that US economic is bad and those company doing business with USA will facing less order or no order at all. Wellcal mandrel hose mainly to USA.. No orders, revenue drop.. Foreign investor start pull out their money from M'sia, but invest in other Asia country. What will happen if Mondrain withdrawn and sell wellcall share? Beware everyone....
New IPO: The onshore and offshore support services provider for the O&G industry, Steel Hawk Bhd aims to list on the Ace Market!
MQ Trader 2938 views | 2 d ago
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New IPO: The largest mini-market player and a leading groceries retailer in Malaysia, 99 Speed Mart Retail Holdings Bhd aims to list on the Main Market!
This book is the result of the author's many years of experience and observation throughout his 26 years in the stockbroking industry. It was written for general public to learn to invest based on facts and not on fantasies or hearsay....
allow
12 posts
Posted by allow > 2016-02-26 16:04 | Report Abuse
reached 2.900 suddenly dropped so much. what happening?