CSCSteel - The Flat Steel Stock That Is Stable, Cash Rich & Now A Great Value Buy (Calvin Tan)

calvintaneng

Publish date: Mon, 12 Feb 2018, 09:54 PM

Hi guys/gals,

I have always been bullish with Long Steel like Prestar, SSteel & Masteel & Avoided Flat Steel

NOW I HAVE TURNED CONTRARIAN FOR 2 REASONS

Reason No. 1 - Long Steel up 100% to 200% no longer a bargain

Prestar at 46 Sen, SSteel at 95 Sen & Masteel as 66 Sen were cheap then. Now most have doubled & tripled in prices. So I am no longer bullish on long steel any more

Reason No. 2

Govt imposed high tax on Cold Roll Steel will benefit CSCSteel Flat Steel Stock

While Long Steel Prices have surged near their NTA CSCSteel has fallen to Rm1.51. And with NAV of Rm2.22 CSCSteel is now selling at 32% Discount to NTA - meeting the Margin of Safety of 30% as advocated by Ben Graham

And These Are More Salient Factors For CSCSteel

1) CSCSTEEL IS A PURE FLAT STEEL PLAYER. So the imposition of tax against Cold Roll Steel Dumping will benefit CSCSteel the most. With less competition CSCSteel will capture the Lion Share of The Flat Steel Market

2) More So As Geely Jv with Proton will ram up production to 400,000 Vehicles for export. Recent Good News of Perodua Increased Sales also bode well for Flat Steel. Flat Steel is used for Car bonnets, roofs, doors & all things flat.

CSCSTEEL STEEL IS USER FRIENDLY FOR ANY PAINT JOB.

See

Proton looking to sell 400,000 cars per year by 2027 – aiming for 30% market share in Malaysia, 10% in Asean

3) CSCSTEEL IS ALMOST DEBT FREE AND HAS A CASH & CASH EQUIVALENT HOARD OF RM161 MILLIONS.

And with little need for further capet as it is primary producer of Basic Cold Roll Steel THE CONFIDENCE OF CSCSTEEL MANAGEMENT LIKE Harrisons is now returning more CASH TO SHARE HOLDERS AS DIVIDENDS.

MORE DIVIDENDS CAN BE EXPECTED FOR 2 REASONS:

1) WITH TARIFF AGAINST COLD ROLL STEEL DUMPIMG CSCSTEEL WILL CAPTURE MORE SALES

2) WITH PROTON RAMPING UP EXPORTS ALL THE INVENTORIES OF CSCSTEEL ILL FLY OFF THE SHELVES IN NO TIME

SO WITH SO MUCH PROFIT ROLLING IN CSCSTEEL WILL TURN INTO A DIVIDEND CASH COW LIKE CLASSIC SCENIC, UCHITECH, PIE OR HARRISON

4) A PROJECTED 6.6% DIVIDEND IS ANNOUNCED (5 SEN COMES FIRST: ANOTHER 5 SEN LATER)

SEE

SUMMARY OF KEY FINANCIAL INFORMATION
31 Dec 2017

		INDIVIDUAL PERIOD		CUMULATIVE PERIOD
		CURRENT YEAR QUARTER	PRECEDING YEAR CORRESPONDING QUARTER	CURRENT YEAR TO DATE	PRECEDING YEAR CORRESPONDING PERIOD
		31 Dec 2017	31 Dec 2016	31 Dec 2017	31 Dec 2016

		$$'000	$$'000	$$'000	$$'000
1	Revenue	367,187	286,916	1,323,259	1,035,197
2	Profit/(loss) before tax	19,323	7,851	76,079	82,123
3	Profit/(loss) for the period	14,821	6,190	59,810	68,689
4	Profit/(loss) attributable to ordinary equity holders of the parent	14,821	6,190	59,810	68,689
5	Basic earnings/(loss) per share (Subunit)	4.01	1.68	16.20	18.63
6	Proposed/Declared dividend per share (Subunit)	10.00	14.00	10.00	14.00
		AS AT END OF CURRENT QUARTER		AS AT PRECEDING FINANCIAL YEAR END
7	Net assets per share attributable to ordinary equity holders of the parent ($$)	2.2200		2.1900