Note: 1 ton = 1000 kg, current price ~ RM 3000. Their combined total capacity: 367,000 ton.
Even if you put just bloody RM 100 profit margin per ton of material processed (that is like 3% margin)...you will generate close to RM 40 Million profit per annum.
Actual current gross margin ~ 15% based on last 2 qtr latest.
I think the Steel Tube segment has like RM500 gross margin per ton based on the reported qtr results of Choo Bee and Mycron.
i think all local highway guardrail...comes from Prestar. weight of 1 guardrail is about 0.5 ton per 12 meter. Highway should have 4 guard rail / road = 2 one each line X 2 lanes
This comes to aproximately 150,000 ton per 1000 km. it is galvanised HRC with moulding work...margins should be fat - as good as tubes or higher per ton.
looking at gross margin and revenue, Prestar is currently only operating at ~50% of its rated manufacturing capacity. Tubes and Storage system solution are probably the main contributors on throughput currently.
I think the Gross Margin is fairly fixed around current level (RM500/ton). The growth in revenue is where the prospects are...that seems inline with the recent job advertisement and projects surfacing...and the recent local developments (HRC sourcing due to Megasteel closure) enabling it to compete internationally for export market.
The guard rail demand due to local Highway projects are the new contributors ...and we should see that adding to its revenue going forward for the next few years..
sorry nicky11...i think there are a few small scale suppliers..e.g Lysaght but none have the economy of scale of Prestar . The bulk should be from Prestar. I could be wrong though.
Hi Probability sifu, just now I checked and found few companies which supply guardrail but seems the scale not so big and even their company website is quite simple. I think Prestar will be one of the main supplier in West Msia but I am wondering is there any big guardrail supplier which based in east Malaysia which may directly benefit from Pan Borneo project. Prestar plant in Selangor, the logistic cost to east Msia is quite high too. Anyway, I believe the profit margin can cover it if there is a demand. :)
KKB hot dip galvanising , do supply range of road furniture.
But, Prestar products are most complete in range & quality . With recent tide output of China Upstream in upstream, road furnitures order likely to flow back to Prestar .
Another thing to take note is, Former Sarawak CM ( Bai Mao's conglomerate )has 20% in KKB .So, KKB has it's advantage to secure pipe lining & road furnitures package in Borneo land .
In construction solution, I believe Prestar will growth like OKA CORPORATION BHD(current price:1.48). Besides, Prestar also offer the storage solution which may beneficial from Digital Free Trade Zone project. This will be an additional advantages to Prestar as this storage solution also can be exported to overseas.
Yeap i agree. Digital Free Trade Zone project requires huge amounts of warehousing and Prestar does manufacture those blue and orange panel racking for warehouse usage
Can it be a flag formation, and thus bullish ? Anyway, low PE, fair DY, and very profitable company. With lots of construction work, matter of time before price goes up.
Recently this stock really boost high in a single day and gradually down for few days. Is it people is concern about the Steel Import duty which will be announce soon?
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probability
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Posted by probability > 2017-03-24 13:40 | Report Abuse
Refresher:
CRC processing section Rawang, 9 machines: 131,000 ton/yr
HRC processing section Klang, 7 machines: 163,000 ton/yr
Steel pipe, Stainless Steel, 3 machine: 5,000 ton/yr
Steel pipe, Carbon Steel, 2 machine: 18,000 ton/yr
Steel precision Tube, 6 machines : 50,000 ton/yr
Note: 1 ton = 1000 kg, current price ~ RM 3000.
Their combined total capacity: 367,000 ton.
Even if you put just bloody RM 100 profit margin per ton of material processed (that is like 3% margin)...you will generate close to RM 40 Million profit per annum.
Actual current gross margin ~ 15% based on last 2 qtr latest.
I think the Steel Tube segment has like RM500 gross margin per ton based on the reported qtr results of Choo Bee and Mycron.