Goreng goreng stock means that a stock without making any profit or only making a low profit(high PE). One goreng stock is FLEXI, IPO price is 20cent, but opening price is 69cent. Latest 9 month profit is only 1.3cent. Flexi price is 41cent now.
In fact, LEONFB NAV=RM1.22, latest quarterly(latest 3 months) EPS is 5.84cent, steel price is much higher in compare with Oct-Dec2020, and good prospect. If LEONFB stock price more than RM1.50, you should start to be careful.
after so many counter he recommended , finally this is one counter will drop immediately after his recomendation. meaning no one belive him already.. this time investor smarter than him, instead of buying become selling first.. dont want let him to sell first
Leon Huat just purchased a property at Balakong Jaya Industrial Area, Selangor, along with the factory, warehouse and office building for RM28m. They currently rented it for RM 9k per month.
Sound fishy. Why buy, when you can rent it dirt cheap?
Leon Huat just purchased a property at Balakong Jaya Industrial Area, Selangor, along with the factory, warehouse and office building for RM28m. They currently rented it for RM 9k per month.
Sound fishy. Why buy, when you can rent it dirt cheap?
"Just to elaborate further" With based lending rate of 3.5%, they need to pay around 250K per month for 10 year loan of RM28m. Why pay 250K when you can rent it for 9K?
Bailing somebody out at the expense of shareholders?
positiontrader, you have raise a very good question.
To answer your question, we can think from few perspective:-
1) For any manufacturing business (especially those heavy asset industry), it is always more secure to operate in your own building, instead of rent from other people. Because your business operation cannot afford any risk of relocation. For steel manufacturer, all the plant & equipment, boiler, production line are installed for 10-20 years purpose. You cannot afford the losses to dismantle and reinstall.
2) I am not sure RM28mil is a proper market price or not. Let assume it is the market price, then the question is why want to buy instead of rent. Based on my understanding, in current market situation, many steel producer do not dare to do further expansion. When you business are making money, and you got no plan for expansion, the best way is to buy land.
3) If you are a businessman, I am pretty sure you understand the concept of use your business cash flow to buy land. Let give you an example, I knew a business man, he is involve in small manufacturing business. Over the past 20 years, the business got up got down, he has made RM3-4mil profit per year before, he also suffer Rm2-3mil losses per year before.
When he decide to let go his business, the business is making very minimal profit, around RM400k per year only. If you look at his factory and the machinery, all are old and outdate, maximum worth RM1-2mil only. That mean, for the new buyer, if using PE Ratio to calculate the company value, maximum is 4 times PE x RM400k - RM1.6mil. If based on NTA, it is also RM1-2mil only.
That mean, for the past 20 years hardwork he has put in, the company is worth maximum RM2mil only. But fortunately, over the past 20 years, he has use his business cash flow to buy land, buy factory. He has total acquired 4 pieces of industrial land, and 1 factory over the past 20 years. Now this land and factory is worth RM25-30mil.
So back to your question, maybe after 10-20 year later, the balakong land can worth RM60-80mil, then you will understand why the company want to buy it instead of rent it.
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char1234
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Posted by char1234 > 2021-03-28 23:21 | Report Abuse
company trapping people for now...