PETALING JAYA: Cement and steel manufactures may see trading interest after having been given the green light to resume operations under the movement control order (MCO) period, which has now been extended for another two weeks until April 28.
However, a slow pick-up in demand and potential delays in the rolling out of some infrastructure projects could weigh on these companies.
According to analysts, the initial one-month suspension of construction works has created some cashflow pressure to building materials players due to possible delays in payment from both the public and private sectors.
“Sustainability of these companies depend on the collection from the construction sector, which are also reeling from the MCO.
“Weighing on the minds of those in the construction and building materials sectors, plus property for that matter too, are uncertainties over how long Covid-19 will last and whether project deadlines will have to be pushed out, ” said one analyst.
UOB KayHian said it has reduced earnings forecasts for cement players due to the impact of the MCO, while for steel companies, they are “to remain in the red for 2020 given the lack of demand, excess supply and the continued downtrend of average selling prices (ASPs) of steel products.”
The research firm noted that year-to-date, steel bar prices have remained flattish against 2019’s average of RM2,124 per tonne.
“As at mid-March, steel bar price was recorded at RM2,105 per tonne which represents a 3.2% month-on-month contraction.
“We are of the view that steel prices will continue to be under pressure post-MCO, given that demand recovery is slated to be slower than expected as construction activities will be muted, ” it said in a report.
Another issue facing the steel segment is existing oversupply. This has yet to be resolved and will lead to further compression in steel ASPs, said analysts.
In the case of bulk cement prices, UOB KayHian noted that ASPs have eased from the peak in February.
The research firm believes that the move to raise industry-wide bulk cement ASPs (including that of smaller cement players) may now be delayed.
It noted that prior to the MCO, bulk cement ASPs still hovered at around RM240-250 per tonne for leading industry players.
“Recall that back in early February, smaller cement companies announced that price hikes of RM30-RM40 per tonne will materialise from March onwards to match the prices set by industry leaders.
“We are of the view that the cement price recovery may be gradual post-MCO and the implementation of a RM30-RM40 per tonne price hike may only materialise in the second half of 2020.”
Sept 2016, EPF paid RM1.13B to buy 40% of Duke 1+ Duke 2 a simple mathematics will reveal, the remainder 60% worth at least 80 cents per share Duke 3 will be completed by end of this year . will start collecting toll early next year It is given to you FREE !
Abolish Toll ?
PH couldn't do it , PN lagi has no reason to do it ?
still worry ?
then God can't help you you better go back kampung tanam sayur .
Which companies on Bursa have high cash and low debt KUALA LUMPUR: The second extension of the movement control order to contain the Covid-19 outbreak — now totalling six weeks until April 28 — means that economic activities will remain subdued for at least another 14 days. The pandemic, which has infected nearly two million and killed over 100,000 worldwide, presents the worst start possible for the recession expected ahead. As the infection curve has yet to near its peak, it is anyone’s guess on the depth of the economic downturn. Against this backdrop, survival is the prominent concern now. Investors’ attention is drawn to companies’ balance sheets instead of growth prospects, which is widely expected to be minimal in the best-case scenario, as business volume dwindles and operating cash flow shrink. Asia Analytica data shows that of some 880 listed companies (after excluding the 40 banks, insurers and investment trusts), 597 companies listed on Bursa Malaysia have cash that is less than their short-term liabilities. Companies in many different sectors are underlined here, from furniture companies to retailers, automotive-related firms, and a wide range of manufacturers and trading companies. Meanwhile, 223 listed companies have an interest cover ratio of below one times, meaning their earnings before interests and tax cannot cover interest expenses for a full year. The market capitalisation of most of these companies are below RM2 billion. Some 321 companies were already in the red last year. Of the 599 profitable ones, around 45.6% of them saw profit decline in the period. Again, most on the list are small-cap firms, according to Asia Analytica data. It is also worth noting that the economic downturn would be a tough test on companies’ sales quality. Companies with a high portion of credit sale with mounting receivables could be at risk amid the potential cash trap. A random check shows that 75 listed companies or 8.2% have net gearing of over 100%. Sectors with the most companies in this category are logistics, construction, oil and gas, building materials and property development. Others with net gearing of above 80% include power companies, telecommunications companies and building materials companies. Power producers’ liabilities are usually backed up by the steady cash flow from power purchase agreements. On the flip side, notable sectors with low net gearing average include Internet and gas utility companies, and technology solution providers. Of 79 generic companies with market capitalisation of above RM2 billion (ex-banks, real-estate investment trusts and insurers) only 22 have a cash ratio of above one times and net gearing of below 50%, led by Petronas Chemicals Group Bhd, Petronas Gas Bhd and IOI Corp Bhd. As reflected by the price-to-book valuations, preference is given for companies with high cash, low debt, steady recurring income and high-quality clients, such as tech companies, and broadband providers. There are also lesser-known small-cap companies that are cash-rich with sturdy past operations. As a fund manager pointed out that a downturn is a brewing pot for merger and acquisition activities, as smaller, cash-rich companies with good assets or business prospects usually become undervalued after the market selldown. The first quarter’s (1Q20) financial result will show how much cash was exhausted amid the two-week shutdown in the second half of March, while prospects of the entire half of 2Q20 being under movement restriction are still visible.
forget your technical chart now. it is useless when price had already hit the rock bottom ask yourself a simple question why the price did not drop when traders are not allow to use margin to buy it is nothing more obvious than the fact the share is transferred from a weaker hand to a stronger hand
you pay the price 46 now , what is the value you get ? you get duke1 and duke 2 at 50% discount you are getting duke 3 Free, you get the 6B order books with a 8% net profit margin free you get the 300M cash in the bank free
still talk about technical ? you better balik kampung tanam sayur lah.... ( you better go back your own village to plant vegetable)
the banks are not worry when you get the highway listed , there is no debt but solid cash do not be that short sighted can't see anything further but LKH's head has no hair
If you have technical knowledge, you can always find best price to buy in, if no, then will find excuse to say i will buy in now because I have lot money. Come on, nobody like to buy higher price if knew it will lower!! That is difference between having knowledge or not. I also have $ and prepare 3 batches, different is I will find good entry price, but NOT simply buy and self say I have $$ (in actual does not have technical skill...)
realinvestor888 //If you have technical knowledge, you can always find best price to buy in,
YOU ARE WRONG . THE CHART IS CHANGING EVERYDAY, WE ARE NOT ALWAYS THAT LUCKY TO BUY AT THE LOWEST PRICE
if no, then will find excuse to say i will buy in now because I have lot money. Come on, nobody like to buy higher price if knew it will lower!!
THIS IS NOT A GOOD ARGUMENT TO PROVE ME WRONG . IT IS MORE AN EXPRESSION OF YOU CURRENT EMOTION
That is difference between having knowledge or not.
BUT IF YOU DO NOT HAVE THE COURAGE TO ACT ON IT , IT IS ALSO ZERO
I also have $ and prepare 3 batches, different is I will find good entry price, but NOT simply buy and self say I have $$ (in actual does not have technical skill...)
NOT SIMPLY BUY , IT IS A GOOD BUY NOW WITH GOOD REASONS I HAD SAID EARLIER
@Aseng, Cheers, let's see how the price goes on afterwards, then we will know:) At least we argue base on fundamental here, it is good:) The worst is roger3210, no fundamental & technical knowledge, just have 1 skill, my uncle say buy buy...dont come out as joker la...go study more for good future.
real investor888, in this uncertain and chaos world .knowledge will let you go down to hell ,espeacial in share market ,depend in your fundamental & technical knowledge you will lose all your money ,Now most important is power and money, i have earn money everyday , my uncle say buy buy.. I buy because he push up . You are joker loser and trap all the money ..you want to study go to school, here is war, no need knowledge but need money but you don’t have you only have knowledge hahahahahaha by the way my uncle said buy buy buy buy today your primary school teacher Said what ? 888 hahahahahahah
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....
KAQ4468
21,497 posts
Posted by KAQ4468 > 2020-04-11 14:49 | Report Abuse
Perghhhhhh .... Kasi masuk peti ais 2 tahun