After I posted my article named “Comparison of steel stocks update”, in which I pointed out Prestar is the cheapest in terms of PE ratio, many investors wanted to know why I bought so many Prestar shares.

The last traded price is 70 sen. Its latest quarter ending Sept. EPS was 7.21 sen and its previous quarter EPS was 9.59 sen. All this profit was achieved when there was MCO lockdown. It should report better profit for its quarter ending December which should be announced before the end of February.  

During the FYE2020, the Group has taken some control and preventive measures against the widespread of COVID-19, including some business development activities undertaken by the Group, as summarised below in its 2020 annual report:

i) COVID-19 pandemic – preventive measures as a result of MCO and CMCO imposed by the government since 18 March 2020 due to COVID-19 pandemic, the Group’s operations were adversely affected during the initial phase of lockdown. However, the Group has subsequently managed to obtain approval from the relevant authorities to resume its operations during the lockdown period with adherence to strict operating conditions, observation of stringent standard operating procedures (“SOP”), establishment of Return to Work Guideline and formation of COVID-19 Emergency Respond team.

In addition to the above initiatives, several preventive measures were implemented and such applicable best practices were also adopted in accordance with the guide gazetted by the Majlis Keselamatan Negara (MKN), Kementerian Kesihatan Malaysia (KKM) and Ministry of International Trade and Industry (MITI). With the successful implementation of the control and preventive measures during the period, the impact of COVID-19 has been mitigated to the minimal.

ii) Business collaboration with a Japanese company, Murata Machinery, Ltd (“MURATA”) to supply automated storage solutions worldwide During FYE 2020, Prestar Storage System Sdn. Bhd. (“PSSSB”), a wholly-owned subsidiary of the Company had entered into a Manufacturing Partnership Agreement with MURATA for the purpose of designing, manufacturing and supplying of Automated Storage and Retrieval System (“ASRS”) Racking System for the latter’s worldwide market. MURATA is one (1) of the largest designers and manufacturers of material handling systems in Japan with leading edge in the manufacturing of Automation Integrator serving a global market in a wide range of industries. The said collaboration will provide PSSSB with a growth opportunity to participate in the supply of ASRS Racking System for MURATA’s global market including the United States of America, Japan, China and ASEAN countries as well as leveraging on its core strength to achieve greater success in factory automation sector. In addition, the collaboration is expected to give PSSSB the instant accessibility for supplying ASRS Racking System to e-commerce, pharmaceutical, Omni-channel distributions, retailing, distribution and logistics industries and high throughput industries such as fast-moving consumer goods particularly for export market. The collaboration will definitely augur well the long-term strategic business goal of PSSSB.

iii) Sarawak Pan Borneo Highway (“PBH”) contract Another wholly-owned subsidiary, Prestar Engineering Sdn. Bhd. (“PESB”) had on 1 July 2020 entered into the Supply Agreements (“Agreements”) with Pansar Company Sdn. Bhd. (a wholly-owned subsidiary of Pansar Berhad, a company listed on the Main Market of Bursa Malaysia Securities Berhad) and was also awarded the contracts (“Contracts”) from LTC West Gate Sdn. Bhd. and Kemakmuran 2000 Sdn. Bhd. for the purpose of supplying and delivering guardrails and accessories in respect of the development and upgrading of the proposed PBH in Sarawak, Malaysia.

The total estimated amount of the Agreements and Contracts secured by PESB was RM80.0 million for the supply of Guardrails.   

You can read all these in Prestar Resources Berhad Annual Report 2020 and 2021 OPERATIONS REVIEW.