Although the raw material costs have increased, so as the product selling price. The gross profit margin of AnnJoo showed improvement QoQ.

In this Jan-Mar'18 quarter, many companies reported surprisingly poor earnings, especially export-oriented companies, wood-based companies and etc. The long steel producers have actually stood out and reported better than expected earnings. Congratulation. In addition, the long steel prospect given is bright, so the good earning should sustain throughout the whole 2018.

If I were new finance minister, I may do what LGE did. But as a normal investor and already has a handful of stocks presently, we of course not welcome this news.

If i think in positive way, this phenomenon would be short term, and it gives opportunity for us to buy more depressed stocks (if one still has cash reserves).

What LGE may not keep in mind or take it lightly is his statement would distort the stock market in negative way and affect people like us.

As a new finance minister, LGE of course would like to report the worst figure. He can then work on it to reduce the national debt. Some years later, he can tell public the new government has managed to reduce the debt from ~RM1 trillion to much lesser amount. In this way, he can show his and the new PH government efforts and contribution. The amount of debt reduced will be as much as possible, thus the starting point must report the worst debt figure loh. Logic and common sense lar.
In manufacturing industry, new CEO also would do the same thing. They would carry out all the possible write-off, impairments, report the worst figure, and then start to work from the bottom.

The lower earning in this quarter was due to , apart from softer market, it was caused by "temporary product mix/sales aberration". Aberration means a deviation from what is typical or normal.
The management didn't explain the details of the aberration, but did mention it is "temporary". I suppose this means next quarters' earning will be back to normal.
In the "Commentary on Prospect" column, management mentioned "The Group remains optimistic in relation to its performance for the year." From all the info provided by the management, I interpret that this quarter's poorer earning would happen only in this quarter.
Pls correct me if I am wrong on my interpretation from reading the quarterly report.

TGuan earning result meets expectation actually. Although it is lower YoY but improve QoQ significantly. The gross profit margin in plastic product division is recovering and losses in F&B has very much narrowed. There is forex loss that dragged down the earning in this Q.
With the strengthening of USD in Q2, and gradually recovering of profit margin, and new restaurant operation may start to turn profitable in next quarter, we should see improving earning in quarters to come.
The earning in this quarter is of course not satisfying but it is expected, and it has been factored into current much lower stock price if compare against the stock price in beginning of the year.

It's stock price may continue to fall...I don't know. What I do know is WCT will not be zero value even if its major shareholder goes to jail.
The recent news affect its major shareholder but not that much on WCT's fundamental. EPF + LTH + KWP + Amanah Saham Bumiputra hold a total of 28.8% shares in WCT.

I also collected some at this depressed price :)

The way its stock price has been dropping in past few days make WCT looks like a "hopeless" company.

In short, my point is WCT is a public listed company, owned by many includes EPF fund, and its business fundamental is still intact. WCT is capable to continue to bid for government or non-government related construction projects moving forward.It is not like if a director goes down (a big if), the whole WCT will be hopeless.

My thinking is even if the Tan Sri is linked to 1MDB like what others have speculated above. WCT's business is not a private company owned by the Tan Sri alone. It has long established construction arm, and it secured infrastructure projects via competitive bidding just like Gamuda, IJM & etc. Besides, WCT also owns lands, malls, and property development business. All these would not change even if any of its director is thrown into jail.

I doubt GKent's construction unit can be so well managed that it could achieve much higher profit margin compared to more experienced construction arms like Gamuda, IJM and etc.
So if the contracts secured are reviewed by new government, GKent's construction division may not see as high profit margin in coming future ?
The above is my worry to buy GKent at current beaten-down price..
Any feedback are welcome.

The construction division of GKent achieved exceptionally high profit margin. In preceding quarter (Q4FY18), its PBIT margin was as high as 52% ! How can this possible in construction industry ?
The extremely high margin means either GKent secured very "attractive" contracts or it is very very well managed.

SSteel has proven its performance with 3 consecutive quarters' EPS above 10sen.
The new PH government will not scrap the mega infrastructure projects such as LRT, MRT and Borneo Highway, so the long steel demand should sustain or improve.
It is undervalued and with clear earning visibility.

The core EPS in past 3 quarters in FY18 is 39.68sen, if annualise, I get 52.9sen EPS per year.
Assuming 8x multiple is given to SSteel business, the fair value would be RM4.23 per share compared to RM1.90 closing price yesterday. The upside is >100% !

Mahathir is smart.

If sensor market is going to have tremendous growth rate as u found out above, why not invest into Globetronics which produces the sensors for AMS/Heptagon ? Isn't Globetronics can benefit directly and more from the growing sensor market ?

I think we should buy small/mid cap stocks which being beaten down lately, but also keep some cash to buy more if PH wins the election and Bursa comes down temporarily.
In this way, we benefit if BN wins, and we also have some spare cash to accumulate stocks at even cheaper price if PH wins.

Uncle K needs your money to donate to others so that he can show-off to all Malaysians how generous he is. Since there are so many people here do not like him, i3 and stock market is the perfect place for him to suck money from so that he can use the money from the people who curse him and transfer part of the money to people who sing praise to him.
He has been doing so for long, ain't you guys see the reality ?

I see similarity now when US had dispute with North Korea last year. Both countries shouting to each other as if the nuclear war is to start next day. The end result is they may meet in next month to have peace talk.

I like.
Well written article, it talks with logic and with rational thinking.
I suppose Chinese think tanks also see the same things and is ready for any possibilities.
If the US president is indeed a clever man and not mad like others think of, he will not initiate the trade war with China in big scale due to one simple reasoning: he has more things to lose.
I believe it is worth to take risk to buy stocks now.

Jon Choivo, just to let you know that I enjoy reading your opinions and I have learned many things from you so far, especially on financial staff in RCE Cap platform. Pls keep up.
I have been doing shopping in stock market lately, and feeling so excited.

I agree steel theme is not over yet. I believe the recent sell-down of steel companies have a few reasons, one of them is the recent down trend of steel price in China. It would be short-term, I extracted the following points from one of the bloggers :
So far, local rebar price is holding well support despite sell-down in china which often very volatile from Jan hit 4400 to Mar 3600, this is because China has platform to trade future steel in which retail investor and market player all can trade and hedge on all kind of raw material, thus, short term is volatile driven by news development. Toward end of winter and Spring coming, more construction activity will resume, a more concrete physical demand will surface to balance on paper demand in trading platform.

When market sentiment is bad, everyone thinks negatively and ignore the positive factor and vice versa.

Brent crude oil is at US69.81 presently, and possible to cross US70 per barrel soon. That is beneficial to Hengyuan fundamentally, Why no one excited about this ?

Hng33, thanks for the info given.

Hng33, what do you think about the gas tariff hike and foreign worker levy ? How much that will affect LionInd's earning in Jan-Mar'18 quarter ?

So if LionDiv is delisted, it would change from "quoted securities" to "unquoted securities" in LionInd's balance sheet. No other thing will change. Pls correct me if I am wrong.

To Hng33, you sound like a person that does your study and analysis on the stocks that you invested. On the other hand, I notice u buy and sell the same stock in very short time interval and frequent, and that makes u look like a stock speculator ..or even day trader
How come ?

To Ming, even if LionDiv is de-listed, they can still do business as normal. It is just LionDiv is no longer able to buy/sell in Bursa. Thus, the de-listing does not affect NTA or balance sheet at all.

LionInd registered highest revenue and profit in Oct-Dec'17 quarter if compared against last few years.
The management also gave positive outlook on the prospect of its business in coming Jan-Mar quarter.
Thus, I see no fundamental reason for LionInd's stock price to plunge to this level. I can understand why Masteel's stock price plunged so much but not LionInd.
I think the selling is over-done.

The sell-down of LionInd in last several days should relate to LionDiv which failed to submit re-structuring plan and is to be de-listed next week.
The de-listing of LionDiv is actually does no harm to the fundamental of LionInd. I suppose that just affects market's confidence on the ability of Lion Group's major shareholder...

Prestar has been delivering decent EPS quarter after quarter, but it is still selling at low PE..
Anyone knows why ?

Record breaking revenue and profit in this quarter.
This quarter's revenue and EPS are even higher than FY15 when all export-oriented stocks were having good times.
All earning are genuine and without any one-off gain.
Gtronics memang boleh.

Read the quarterly report, the management's comment can be found there.

Evergreen's earning in this quarter is relatively okay if compared against other furniture and export-oriented companies. It is definitely not considered as good since high log price issue still persist and Thailand plant again has one production line stoppage issue.
The management claimed that in Jan'18, the weather and log supply are okay. If such situation can continue in Feb & Mar'18, the coming quarter's earning will see improvement.

Armada's debt ratio is very high, so a big portion of earning goes to bank lor. They are bank's best friend.
FPO segment doing okay, but the OSV utilisation and charter rates are expected to remain low in quarters to come due to the over-supply of OSV in market. Dayang also having the similar issue on its OSV chartering business.

The EPS is lower QoQ and YoY, mainly due to the one-off downward adjustment of RM2.51mil. The market people may ignore the one-off adjustment factor and sell-down Cepat tomorrow. Most people just look at the reported EPS and don't really read the contents of the report in details.
Can consider to pick up some if its stock price falls sharply tomorrow.

Profit down QoQ and YoY.
Q4 used to be a strong quarter for LiiHen, but this Q4's earning is the lowest if compared against Q1 to Q3 FY17..
I suppose market do not like to see this earning result, and likely to sell down LiiHen tomorrow.

I just read the quarterly report in detail, there is no one-off gain in this quarter, so all the profit are genuine earning.
It is really well done.

Panic buy tomorrow

According to news above, the higher plywood price is caused by lower production resulted from unfavourable weather.
This means the output is low, hence lower output x higher selling price does not necessarily equal to higher earning.
The same thing happened when El Nino hit palm oil industry, CPO price up and output down, resulting, earning of plantation companies actually dropped during that period.
I am not saying same thing would happen to plywood manufacturers this time around, but just don't be over-optimistic.

Thanks Jon.
Another factor causing Bursa's under-performance in 2H 2017 was probably due to coming election which raises the uncertainty level.
Market does not like uncertainty.

How about comparing with other ASEAN countries like Philipines, Vietnam etc? Their interest rates are not low like US or Japan, but their stock performance in 2017 were much better than Bursa.
Thus, I think the relatively lower stock performance in Bursa is not solely due to our interest rate.

Great in-depth analysis ! Tq.

At this age, u can read all the annual reports in Bursa, I salute.
Being humble, honest and open to admit mistakes and learn from them, i think your stock investment future is very bright. U are kind of a "growth stock".
I look forward to seeing more of your article.
Thank you.

One thing to correct, steel price does go up lately, but iron ore is actually on downtrend and that would not be good for its mineral trading segment.
I do think Q4's coming earning should "normalise", but I won't just count on Lsteel just because its management buyback its own shares. I have seen cases that directors buy their company stocks, and the stock price still came down. I also met cases directors sell their company stocks, and the stock price kept going up. Having said so, share buyback is still a good sign but do not totally count on that to make buy/hold/sell decision.

Result came out, this Q's EPS is -0.03sen (a slight loss).
Its PBT is ~RM1.1mil, but the tax expense is as high as ~RM2mil, resulting the Profit After Tax (PAT) turned to red at ~-RM0.88mil... I wonder why the tax rate is so high for this Q ?
Anyway, the long term loan has reduced siginificantly in this Q, and we should see significant reduction in finance cost in Q4.