Is this company buy aluminium as raw material to make finished goods? The global aluminium price drop should benefit this company as their cost reduce. Why their profit keep reduce ?
if you are a company in which the profit depends on the price of the raw material, what will you do when the price of the raw material is at rock bottom? of course buy more of them and keep... that's why you have the article from foodie..
Normally a company would buy more raw material when the price reduce, but finished goods price not affected by the raw material price. If u are planning to buy a aluminium door or gate for your house, would u think the door price would reduce because of raw material price? The fact is the company profit margin would increase by raw material price down. LB Aluminium is the company benefit by the aluminium price down.
Even if LME is going down... don't forget USD rate is going up. So overall, the margins will still be affected. Don't think it is in LBALUM's interest to keep stocks. They will need to extrude and sell the stocks a.s.a.p or else they will be affected badly from cashflow point of view. I also don't think they buy China aluminium billets. They definitely will buy those of higher quality.
I am not sure what is the relationship between China price and the price shown in Index Mundi
Your article mentioned USD1,797 per MT while Index Mundi showed USD1,577 per MT. As my spreadsheet was all this while based on Index Mundi, I stick to the USD1,577 figure.
Sorry I have no comment on China price as I not familiar
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Hot.T Hi Icon (and others), your comments on the article below pls. TQ I've posted the same on Pmetal thread.
this quiet stck has hidden legs... 50% undervalued ... possible M&A with A Rank (major shareholder and ex staff of LB Alum ) is selling out ... keep a close watch ya
Datuk Leow is a substantial shareholder of A-Rank Berhad after acquiring 27.74% stake in April 2016. This will benefit Lbalum to have a sustaining supply of raw material with better pricing.
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....
HuatAh88
89 posts
Posted by HuatAh88 > 2015-12-03 17:06 | Report Abuse
Still coming or has gone ?