Posted by Jeffbkt > 2017-10-06 14:14 | Report Abuse

Good Job but please study if you can the operating cost of the 3 company in Q2 especially LIONIND and compare with your estimated Q3 operating cost.

Posted by leoting > 2017-10-06 14:24 | Report Abuse

Please adjust your machine capacity. Design capacity no equivalent to operation capacity. Machine got downtime, setting time, and routine maintenance. 70 to 80% of design capacity is reality.

Posted by LanjiaoLang > 2017-10-06 14:26 | Report Abuse

limit up!!! limit up!!!

Posted by huiyi > 2017-10-06 14:26 | Report Abuse

Thumb up for the research although I don't know how accurate it is.

Posted by bursainvest12 > 2017-10-06 14:27 | Report Abuse

Thank you. Very detailed analysis. Enhanced version compared to "earlier version".

Posted by leoting > 2017-10-06 14:27 | Report Abuse

Market selling price also fluctuate from time to time, unless you can get an exactly average selling price for year 2017, else you won't get a more accurate figure of profit.

Posted by huiyi > 2017-10-06 14:29 | Report Abuse

why not just compare the cash flow from operation versus their revenue?

Posted by I LOVE Hengyuan, SEXY BABE RM21 > 2017-10-06 14:32 | Report Abuse

so Masteel super undervalued?

Posted by leoting > 2017-10-06 14:45 | Report Abuse

Your piece of calculation is good. But, two variables you input need to review. First is capacity, Second which is most important is Average Selling Price (ASP) too optimistic.

Posted by plutus > 2017-10-06 14:58 | Report Abuse

Good job for the systematic calculation!

Posted by Lanjiaolang > 2017-10-06 14:58 | Report Abuse

The demand (demand=full capacity) is also too optimistic.
Anyway, you give me hope. Hope is a good thing.
Thank you very much.

Posted by JayC > 2017-10-06 15:48 | Report Abuse

since everything is so rosy, I decided to take all information at half valution
therefore, masteel 1.29 x 2 = PE 2.58 is still dirt cheap for a no borrowing companry

Posted by JayC > 2017-10-06 16:45 | Report Abuse

please note that Masteel capacity is 700000mt, last year they run at 80% capacity utilisation. they stated to increase 8% from last year performance. Therefore, estimated volume is 600,000mt. 600,000 x assuming very conservation RM300 = 180million / 4 = 45million per quarter of NP.

Posted by rojakmee > 2017-10-06 20:16 | Report Abuse

Why eps only 1 cents last quarter for lionind ?

Posted by Alex Lee > 2017-10-06 21:15 | Report Abuse

A commodity business. Lowest cost producer is the winner. Masteel look interesting in that aspect. But many other variables were not included in the model. Still a great model nonetheless!

Posted by gwansoo > 2017-10-06 22:24 | Report Abuse

Ann joo is very different from other steel mills because its storage capacity is highest although its production capacity is lower.

Posted by Chean Yeh > 2017-10-07 01:36 | Report Abuse

well, nice calculation. I am sure u have spend a lot of time on this article. Appreciate for ur dedication.

Posted by Chean Yeh > 2017-10-07 01:40 | Report Abuse

@rojakmee, this is simply. not only lionind, ssteel and annjoo face the same problem. There are only one winner in Q2. This is because three of them buy expensive raw materials in Q1, but masteel didnt. Thus, when it come to Q2, only masteel have lower raw material, but take note that masteel is using the last year raw material. However, this wont make masteel show any advantage in future... Masteel just lucky for this time. Let see Q3 then we will know the truth.

Posted by Nelson Cheah > 2017-10-07 01:56 | Report Abuse

why both Annjoo eaf,bf profit not merge together then shares divide the total profit ? Should be PE 1.19 for Annjoo

Posted by JayC > 2017-10-07 02:02 | Report Abuse

should be 1.19 x 2 = 2.4

Posted by animate101 > 2017-10-07 08:39 | Report Abuse

great work!! but too optimistic.top up RM200/t for each scenario for more realistic..

Posted by animate101 > 2017-10-07 08:41 | Report Abuse

Annjoo can use local iron ore.which is cheaper than USD70/t.but cannot use coal, should be use coke.

Posted by calvintaneng > 2017-10-07 10:56 | Report Abuse

Hi guys,

A Word of Caution from Peter Lynch

Steel is a cyclical stock.

And contrary to normal growth stock you must invest "DIFFERENTLY".

At its bottom Steel Stocks have high P/E and people will avoid

like

Prestar at 46 sen

Masteel below 40 sen

ANNJOO BELOW 70 SEN

SSteel below 80 sen

So if you base your investment criteria on P/E you would have missed the above 4 Stocks when prices are cheap.

Of course Cyclical Long Steel with good business due to Highways & MRT construction garnered the best sales. And now P/E is low.

But prices have surged 100% to 200% in tandem.

Therefore Steel Counters no longer cheap.

And low P/E now turns into a dangerous trap for those who chase High High Priced Steel Counters.

SO FOR CYCLICALS YOU MUST BUY WHEN P/E IS HIGH

AND YOU MUST CERTAINLY SELL NOW WHEN P/E IS LOW

Listen to Peter Lynch's words below:

"Anticipate a shrinking P/E multiple over the time as business recovers and investors begin to look ahead to the end of the cycle, when peak earnings are achieved."


IT SAYS,

"ANTICIPATE A SHRINKING P/E MULTIPLE OVER TIME AS BUSINESS RECOVERS"

As steel sells well P/E shrinks to lower digits (one or two p/e also possible)

"INVESTORS BEGIN TO LOOK AHEAD TO THE END OF THE CYCLE, WHEN PEAK EARNINGS ARE ACHIEVED"

What do these words mean?

1) TRUE SMART INVESTORS LOOK AHEAD.
To see that Business is Now at ITS PEAK.

2) LOOK AHEAD TO THE END OF THE CYCLE, WHEN PEAK EARNINGS ARE ACHIEVED
So the CYCLE WILL COME TO THE VERY PEAK. AND P/E WILL BE AT THE LOWEST.
AND THEN?

"THE END"!!!

FROM THE SUMMIT OF THE MOUNTAIN EARNINGS WILL THEN GO DOWNHILL.

SO BUY BUYING INTO LOW P/E NAIVE & SORCHAI WILL GET TRAPPED KAW KAW!!!

That was how Prestar rose from 60 Sen to Rm1.00
And Directors of Prestar got caught buying Prestar near Rm1.00 in year 2006/7 10 years ago.

This round Prestar Directors whose fingers have been burnt badly last round are wiser & selling now

See

ENCIK MD NAHAR BIN NOORDIN 27-Sep-2017 Disposed 67,200 1.350 View Detail
ENCIK MD NAHAR BIN NOORDIN 20-Sep-2017 Disposed 25,000 1.400 View Detail
ENCIK MD NAHAR BIN NOORDIN 19-Sep-2017 Disposed 40,000 1.410 View Detail
MR TOH YEW KEAT 13-Sep-2017 Disposed 20,000 1.450 View Detail
MR TOH YEW KEAT 08-Sep-2017 Disposed 10,000 1.450 View Detail
DATO' LIM CHEANG NYOK 06-Sep-2017 Disposed 50,000 1.410 View Detail
MR LIM CHEANG NYOK 28-Aug-2017 Disposed 50,000 1.400 View Detail
EN MD NAHAR BIN NOORDIN 24-Aug-2017 Disposed 70,000 1.450


This is from Calvin Tan Research personal experience with Steel Stocks over a 10 year period

Regards,
Calvin

Posted by L2 > 2017-10-07 12:43 | Report Abuse

Speaking of directors/management, it might be prudent for those unaware to note this too:
http://www.malaysiastock.biz/Company-Announcement.aspx?id=939645

Posted by kevin008 > 2017-10-07 13:53 | Report Abuse

PAT divide 3 also happy liao...
anyway thx for this info hehe

Posted by VenFx > 2017-10-07 15:10 | Report Abuse

Thx to iedge
for append us the thoroughly infos for the BIG4 Long Steel players.