Posted by probability > 2018-08-04 17:52 | Report Abuse

RM 800/ton for HRC??...Thats why all the China Steel companies are minting record profit!!

Posted by probability > 2018-08-04 17:56 | Report Abuse

There are so many PE 10 or PE 20 stock with bigger greater Elephants sitting in the middle the house...

why keep harping on this PE = 1 stock liao??...Lol!


Posted by mneo > Aug 4, 2018 05:50 PM | Report Abuse

There are so many stocks in Bursa to choose from....especially at this depressed market...why risk to buy questionable LionInd...... wait for a while and the truth will surface itself...

Posted by probability > 2018-08-04 18:00 | Report Abuse

China's Steelmakers Are Smashing Production Records
Bloomberg News

August 1, 2018, 2:09 AM GMT+4 Updated on August 1, 2018

https://www.bloomberg.com/news/articles/2018-07-31/china-fires-up-steel-plants-to-extremes-after-xi-supply-squeeze

China’s steelmakers are smashing production records by pushing:

"furnaces beyond their typical limits, offsetting nationwide closures"
....................................................................................

that may be even more swingeing than government estimates, according to Goldman Sachs Group Inc.

The world’s top producer has trumpeted sweeping reforms in the past two years that have shuttered aging and illegal plants, and shackled winter output in the dirtiest regions. At the same time, official data shows output at record highs. That’s partly because, with demand robust and margins high, mills have rewritten their steel-making recipes to push output beyond normal capacity, says Goldman’s Hong Kong-based analyst Trina Chen.

“For the same blast furnace, mills can deliver an extra 10 percent or more steel than before,” Chen said by email. Operators are using iron-rich ores to boost productivity, and raising the portion of steel scrap in their feed-stock to as much as 30 percent from about 10 percent historically.

“The trend is continuing this year but they are approaching their stretchable limit,” she said.
...................................................................................

China’s average daily output was a record in June, taking first-half volumes to a best-ever 451 million metric tons, more than half world production. The unprecedented run-rate has yet to trouble a prolonged period of profitability that,

most analysts attribute to steady demand growth,
.................................................................

on top of the reforms driven by President Xi Jinping as a pillar of his economic agenda.


Baoshan Iron & Steel Co., the listed unit of China’s biggest producer, climbed in Shanghai on Wednesday, and other mills advanced after the country’s leaders signaled a fresh focus on bolstering economic growth.

Reinforcement bar futures surged to their strongest level in five years.
........................................................................

Goldman said in July that Chinese steel stocks could rally:

"ANOTHER 60 PERCENT in the next year",

and that’s after profits already jumped 151 percent in the first half, according to the China Iron & Steel Association.

Posted by FutureEyes > 2018-08-04 19:59 | Report Abuse

If one goes through the Tables above showing the cost of production derivation, one would notice that electricity tariff hike has almost negligible (zero) implication on its DRI/HBI production costs.

The tariff hike news had been capitalized by many speculative traders recently to push down the stock price.

The electricity costs has a considerable effect on EAF Scrap Iron melting plants only, where the consumption can go up to 500 kwh/ton. Even then, this is very small in comparison to other factors.

Posted by Jon Choivo > 2018-08-05 03:26 | Report Abuse

False precision is too high.

You're expecting a plant restart to go on perfectly. That there is no advancement in technologies from other producers which will reduce their cost and competitiveness.

Lionind is cheap ish I guess. But trying to predict quarters with such precision is likely to induce over confidence.

The more important question is, if the quarter is bad, are you willing to hold and average down?

Posted by Jon Choivo > 2018-08-05 03:28 | Report Abuse

Probability,

If China start back steel furnaces, this is very bad news.

The reason why steel price is even high now is because they closed the furnaces killing supply.

Like I said, high price result in higher supply, resulting in lower price.

You so sure boh?

You wrong in predicting hy and master quarter still not enough is it. How much money you want to lose?

Go out in fd better for you I think.

Posted by value88 > 2018-08-05 09:17 | Report Abuse

Since AnnJoo also can use iron ore as raw material, it will also beneficial like LionInd to take advantage of lower iron ore price vs scrap iron price.

Posted by probability > 2018-08-05 09:55 | Report Abuse

value88, your IQ is 10 times higher than Jon whom i think is only good in writing English literature essays

Posted by SureWin1Woh > 2018-08-05 10:51 | Report Abuse

OTB, WC's reputation has not being good and well-liked by market for the longest time. What makes u think it will be different this time?
Having said that, this deal may be good for LionInd in the longterm.

Posted by hentara > 2018-08-05 11:42 | Report Abuse

Next Mycron.

Posted by soojinhou > 2018-08-05 13:56 | Report Abuse

May I point out a big error in the article? Iron making is the process of removing OXYGEN, not CARBON. Iron ore exists as oxide, ie rusts. To make steel, you need to remove the OXYGEN, typically with high calorific carbon such as coking coal. At high temperature, carbon combined with oxygen to produce CO2 thus Fe2o3 becomes Fe. Carbon is then added to Fe in minute quantity to create a steel alloy that is strong and tough.

Posted by FutureEyes > 2018-08-05 15:23 | Report Abuse

soojinhou, the article was meant to give a simple understanding of the process. There is no need for such detail understanding.

Reason i had mentioned carbon is because it is something more tangible for the readers.

What is important is the Inputs, i,e the raw material and energy in the form of Natural Gas and Electricity required by the Shaft Furnace process.

http://www.businessdictionary.com/definition/direct-reduced-iron-DRI.h...

Extract from above: "to burn off carbon and oxygen content"

Alternative iron source produced by heating an iron ore (generally having 65 to 70 percent iron) at a temperature high enough to burn off its carbon and oxygen content (a process called reduction) but below iron's melting point(1535°C or 2795°F). The output is sold as pellets or briquettes (called hot briquetted iron or HBI) and contains from 90 to 97 percent pure iron, the rest being mainly carbon with trace amounts of other impurities.

Posted by soojinhou > Aug 5, 2018 01:56 PM | Report Abuse

May I point out a big error in the article? Iron making is the process of removing OXYGEN, not CARBON. Iron ore exists as oxide, ie rusts. To make steel, you need to remove the OXYGEN, typically with high calorific carbon such as coking coal. At high temperature, carbon combined with oxygen to produce CO2 thus Fe2o3 becomes Fe. Carbon is then added to Fe in minute quantity to create a steel alloy that is strong and tough.

Posted by soojinhou > 2018-08-05 15:30 | Report Abuse

I have to applaud the research you have done. Don't worry about Jon Choivo or Ricky Yeo pouring cold water on your work, we are after big money and we want to position ourselves BEFORE market reacts. They are more conservative and prefer to buy and hold for long term and so they won't be interested in cyclicals. I appreciate you showing how you derived your estimation of the throughput of the Labuan plant, because that's a figure I can't get from probability's writeup. The supporting data you provided appears to support your profit derivation, and I look forward to the company's results to confirm your thesis.

Jon Choivo, yes, high price leads to higher supply. But do note that in the case of steel, the rise in steel price we see now is not extraordinary, but the NORMALISATION of profits. The severe depression a few years ago was abnormal supply caused by dumping. Don't forget also, the massive supply from China is due to the propping up of loss making steel plants, or zombies, which should have been closed a long time ago. China itself has allocated massive funds to assist ex-steel workers who lost their jobs as China undergoes reform and stop the practice of subsidizing ailing state owned enterprises.

Posted by probability > 2018-08-05 15:34 | Report Abuse

Aiya FutureEyes, even if Lionind sells at 0.10 at PE = 0.1, those who are not invested will focus on any irrelevant negative aspects they can find...

They will talk as if even if you sell these Lionind shares free, they still dont want.

Still want to talk about WC meh? Isnt all the while WC has been a major shareholder of Lionind and they were interested in lionind?

Laughable liao!

Any engineers should understand a plant technology is a technology that performs the same no matter where and who operates that.

I think these investors should admit their poor understanding of HRC steel making process and unnecessarily link past poor performance of Megasteel "management" with the "plant" Lionind is interested to acquire.

Posted by FutureEyes > 2018-08-05 15:36 | Report Abuse

soojinhou, thanks for the appreciation

Posted by soojinhou > 2018-08-05 16:00 | Report Abuse

FutureEyes, carbon or oxygen doesn't affect the financial numbers you present. Thanks for the computation. I've stopped adding lionind after the megasteel deal was announced. Hopefully the circular on the acquisition will shed more light on the financial implication of the acquisition.

Posted by Ricky Yeo > 2018-08-05 17:19 | Report Abuse

Why is it pouring cold water? If I write 99 pages of thesis that doesn't lead to what I predicted, then someone should point to me that my writeup is BS. I'm not saying what is being written here is nonsense, I'm just asking does the difference in manufacturing process will lead to higher profit in coming quarter? which if it does, would it surprise the market? which if yes then push up the price substantially and therefore allow one to gain superior return?

Posted by soojinhou > 2018-08-05 20:51 | Report Abuse

Ricky sorry if I've offended you coz I didn't thought you will be interested in cyclicals. You are after all one of the rational writers in i3. Having said that consider these facts:

1) China produces more steel than the rest of the world combined. The implication from that is that they are the price setters. Given the buoyant steel price in China, Malaysian domestic price can't fall too much before export becomes a viable option, notwithstanding the slowdown in domestic infrastructure and property sectors.

2) Manufacturing process plays a part in profitability in steel making. One of the reason why iron ore based process is more profitable is because the price of graphite electrode has gone up 10x due to China's push into EAF and the shutdown of polluting graphite mines in China. Iron ore based steel making doesn't require graphite electrode.

Do note that Malaysian domestic rebar price has softened in Q2, so, there's a risk Q2 may be weaker than Q1. But then, the annualised PE from Q1 is merely 2.2.

Posted by probability > 2018-08-05 21:00 | Report Abuse

https://www.steel-360.com/cover-story/graphite-electrode-crisis-to-deepen-in-2018

Posted by probability > 2018-08-05 21:09 | Report Abuse

Hot charging of DRI for lower cost and higher productivity Steel making

http://www.millennium-steel.com/wp-content/uploads/articles/pdf/2004/pp55-58%20MS04.pdf

- Reduces specific EAF electrical power requirement
by 120–140kWh/t
- Reduces EAF electrode consumption by
0.5–0.6kg/t
- Reduces refractory consumption
- Increases EAF productivity or allows EAF electrical
system to be downsized
- Promotes low-nitrogen steel for flat products like all
DRI-based melt shops

Posted by YLR33 > 2018-08-05 22:37 | Report Abuse

from the management record and the fluctuation of HRC margin shown in the chart (from several hundreds rmd within few months), the acquire of Mega more likely is ballot

Posted by Jon Choivo > 2018-08-05 23:29 | Report Abuse

Soujinhou,

There is no such things are normalisation of profits in cost based industries

Perfect competition result in perfect destruction of incremental capital over time once inflation is taken into account for the entire industry on average.

You may win if your have an inherent cost based advantage or you are selling specialised steel etc.

The only way to make money from cost based cyclical industries, is to buy when people are highly pessimistic and its trading at price to book valaution. And sell when people start valuing it using pe.

Old plants can be restarted if the demand is there. When Donald trump put steel tariff. Dead plants in the US were restarted.

Im just saying your thesis here is very very very dependent on the next quarter. If its bad, you can go Holland. Because I doubt you will be willing to hold or average down.

So it's in effect a gamble. You're calculation of the expected value better be correct.

At 0.8, it may very well be a decent bet. But given the current market, they are many more better companies selling at cheaper prices.

I just don't see why this article goes into so much detail for no reason.

Its like a gambler thinking he's an investor.

Nothing wrong with gambling btw. But if you're gambling but you think you're investing, your sizing is likely to be very wrong.

Posted by dusti > 2018-08-06 06:21 | Report Abuse

Hope a steel company will offer author a job as CEO.
For investment purposes, we need financial numbers, yes, financial numbers to crunch, if necessary. Technical mambo jumbo gets one no where................cheers and Good Luck!

Posted by BigDaddyCool > 2018-08-06 07:14 | Report Abuse

aiyah this Calvin is all around talking shit here and there...many people get burnt badly because of his chui kong lanpah song only.Dont follow this conman.He is a total freak and disaster.

Posted by Ricky Yeo > 2018-08-06 07:47 | Report Abuse

JH, no it's all good. : )

Posted by mneo > 2018-08-06 08:51 | Report Abuse

The steel company need writer to make up good story for the company? ha.ha.. ya..if that is the case... the writer is a good candidate....but I think there are better writers in the forum...good in essay writing to cheat investors.....

Posted by value88 > 2018-08-06 08:57 | Report Abuse

It is not easy to gather so much hard data and complete the good article above. We should appreciate the author as he is giving us for free.
I may have doubt on the financial forecast, and the coming earnings may deviate from what have forecasted above. But, the reasoning and the logic of why iron ore price decreases and scrap iron price increases, and why LionInd has good earnings prospect from its HBI operation is there. We can take away the useful facts after reading the article above. I personally have benefited from it.

Posted by probability > 2018-08-06 16:52 | Report Abuse

makhluk apa ni?..tulis pelik2 tak masuk akal...

Posted by Jon Choivo > Aug 5, 2018 11:29 PM | Report Abuse

Soujinhou,

There is no such things are normalisation of profits in cost based industries

Perfect competition result in perfect destruction of incremental capital over time once inflation is taken into account for the entire industry on average.

You may win if your have an inherent cost based advantage or you are selling specialised steel etc.

The only way to make money from cost based cyclical industries, is to buy when people are highly pessimistic and its trading at price to book valaution. And sell when people start valuing it using pe.

Old plants can be restarted if the demand is there. When Donald trump put steel tariff. Dead plants in the US were restarted.

Im just saying your thesis here is very very very dependent on the next quarter. If its bad, you can go Holland. Because I doubt you will be willing to hold or average down.

So it's in effect a gamble. You're calculation of the expected value better be correct.

At 0.8, it may very well be a decent bet. But given the current market, they are many more better companies selling at cheaper prices.

I just don't see why this article goes into so much detail for no reason.

Its like a gambler thinking he's an investor.

Nothing wrong with gambling btw. But if you're gambling but you think you're investing, your sizing is likely to be very wrong.

Posted by probability > 2018-08-06 16:54 | Report Abuse

value88, seriously if only we have more people who can comment like you, i3 would be truly an intelligent place to spend our time

Posted by value88 > Aug 6, 2018 08:57 AM | Report Abuse

It is not easy to gather so much hard data and complete the good article above. We should appreciate the author as he is giving us for free.
I may have doubt on the financial forecast, and the coming earnings may deviate from what have forecasted above. But, the reasoning and the logic of why iron ore price decreases and scrap iron price increases, and why LionInd has good earnings prospect from its HBI operation is there. We can take away the useful facts after reading the article above. I personally have benefited from it.

Posted by value88 > 2018-08-06 18:30 | Report Abuse

probability, thanks. I enjoy your sharing in this i3forum too.
Some people in i3 forum are here to attract student, subscriber or investor, thus, they have to show their power and try to win in every arguments bcos they need to preserve their reputation.
For normal investor like me (I think u too) are not here for that purpose, therefore, we should argue less and learn more.

Posted by probability > 2018-08-06 18:33 | Report Abuse

perfectly agreed.... keep voicing your opinions... i3 needs more comments from sensible people like you..

Posted by Jon Choivo > 2018-08-06 18:44 | Report Abuse

Whats the point of winning an argument.

You win or lose argument, does not mean your thesis is correct or wrong.

The goal is to find out what is right. And act accordingly.

You want to find the leng profit, need to go back almost 10 years. And you need to assume that all the factories in china won't reopen. You so sure boh?

China used to say they want to deleverage, barely 6 month later, when market slow down, they lower the capital requirements for banks in order to stimulate market.

They can turn around on policies.

I'm not saying he's analysis is wrong, he could very well predict next quarter. But this is a guy trying to jump over 7 foot pole. His margin of safety very low.

You see 2017 Q, everyone think sure super earning happen, show you a loss, why also you dunno.

I hope you guys make money, but i have no idea how to make this money.

In any event, people who write post predicting quarter result, rarely stick around to see it.

Posted by soojinhou > 2018-08-06 18:52 | Report Abuse

Probability, just ignore him. I don't even bother replying. Here's for you:

http://www.mining.com/web/chinas-shandong-province-cuts-steel-coal-capacity-environment-plan/?utm_source=digest-en-mining-180805&utm_medium=email&utm_campaign=digest

Posted by probability > 2018-08-06 18:55 | Report Abuse

HENGYUAN Q2 EPS, Just 19 cents
Author: FutureEyes | Publish date: Fri, 11 Aug 2017, 09:50 PM

21-May-2018 results released 28.94 cents

Q3 EPS: HENGYUAN 130 cents, PETRONM 30 cents
Author: FutureEyes | Publish date: Sat, 11 Nov 2017, 09:03 PM

30-Nov-2017 results released 120.59 cents

HENGYUAN - Q1 2018 EPS 25 cents
Author: FutureEyes | Publish date: Fri, 6 Apr 2018, 01:36 AM

21-May-2018 results released 28.94 cents

.............................................

Predicting earnings does not matter?

Guess it does not matter if HY price moves up to 19 and comes down 6... lol!

Posted by probability > 2018-08-06 18:57 | Report Abuse

Ok soojinhou...posted abive before seeing your posting. Thanks for the sharings..

Posted by soojinhou > 2018-08-06 19:16 | Report Abuse

I do not belittle people for doing in-depth research, I do not belittle people for spending time writing up their work and sharing with public. We need good content in i3. Whether the forecast is correct or not is moot, whether the article leads people to riches or holland doesn't matter. I also don't patronize others claiming my method is superior and others are crap. Most of all, I appreciate good content. So thanks to FutureEye for excellent content. The whole article consists of extensive network of data points taken from numerous sources, it took the author tremendous effort to piece together the whole picture. For that, his effort should be commended, not belittled.

Posted by probability > 2018-08-06 19:24 | Report Abuse

exactly soojinhou, only those who had prepared such an article before knows the level of effort involved.

Results no one can guarantee, one has to take calculated risks

Posted by Jon Choivo > 2018-08-06 19:35 | Report Abuse

I wasn't aware that future eyes was doing charity.

So one should also commend bonescythe and pump and dump operations?

People write articles predicting quarters or sudden earnings, because they intend to take advantage of the price going up, and sell before the results come out.

You don't notice how result come out, it pops maybe 2-3% then goes down?

He post is definitely way above bonescythe etc, and he's likely to be more ethical than them.

But its not something worth commending as if he go to orphanage every weekend.

Imagine, he has RM250K in before he post the article, one post make him RM7.5k easy.

There is no such thing as a free lunch. If you are not paying for it, he ain't selling to you, you're the product!

If it was truly this amazing and this cheap. He will diam and just buy.

The only time people post is because

1) they are not sure and want feedback.
2) its so obvious anyone can see.
3) they want to sell to you (some do it in a far more unethical manner).

Next time when i buy car, i will commend my salesman for being good salesmen and manage to make me buy car and the upgrades summore.

======================================================================
Posted by soojinhou > Aug 6, 2018 07:16 PM | Report Abuse

I do not belittle people for doing in-depth research, I do not belittle people for spending time writing up their work and sharing with public. We need good content in i3. Whether the forecast is correct or not is moot, whether the article leads people to riches or holland doesn't matter. I also don't patronize others claiming my method is superior and others are crap. Most of all, I appreciate good content. So thanks to FutureEye for excellent content. The whole article consists of extensive network of data points taken from numerous sources, it took the author tremendous effort to piece together the whole picture. For that, his effort should be commended, not belittled.

Posted by Jon Choivo > 2018-08-06 19:44 | Report Abuse

I don't see why the integrity and ability of WC is in question here.

Is his integrity and ability dependent only on profit?

Put a top management in a rubbish industry, or an industry whose moat is destroyed, and they will look stupid.

Was the management of STAR genius last time, and stupid today? I dont think so. I think they were just normal people, who were in a a really good industry that turned into a really bad one.

WC last time everyday buy back parkson share because it was cheap. Very shareholder minded. His companies are all conservatively capitalized.

His reputation dont need any more building.

His only fault is not being a genius and getting out of certain industries early. Something anyone can fall for.

===================================================================================
Ooi Teik Bee Dear sherlock,
I agree with you. In actual fact, you are very good and sharp.

To be honest with you, earning and PER of Lionind is the best among 4 major steel stocks.
Most investors are not happy with the management of WC.

It takes time for WC to build his reputation.
Hope WC turns into a new leaf.
Thank you.
Ooi
04/08/2018 17:36

Posted by Jon Choivo > 2018-08-06 19:51 | Report Abuse

Having said so much, yeah, this is the best pick for steel i think.

I just think as pretty much everyone here betting that this round quarter will be better on QOQ and YOY basis.

Its damn risky, and it has gone up already, how much left is there to price in.

Whats the expected value? I really don't know the answer.

Posted by probability > 2018-08-06 20:02 | Report Abuse

the below is a very wrong concept to have..

a salesman does not own the cars he sells to you

look at it in another context...

many times durian traders will have to buy the musangking at high price due their own 'perceived value of the durians'..and then ensure that they can sell at a higher price within a certain time frame..like call warrants

there is nothing wrong for them making money in exchange to the value they offer to the buyers...

in this case, they create value by "making the durians accessible" to the buyers..

the same way, an article written to expose the real value of a stock should be welcomed.....

its a win/win interaction
.........................

you can ask Icon, how many times he would have bought at a higher price than the time he wrote the articles...

having the ability to know the true values of a stock can be a blessing in disguise especially when we have lots of 'professor like idiots' in bursa and i3....


Posted by Jon Choivo > Aug 6, 2018 07:35 PM | Report Abuse

The only time people post is because

1) they are not sure and want feedback.
2) its so obvious anyone can see.
3) they want to sell to you (some do it in a far more unethical manner).

Next time when i buy car, i will commend my salesman for being good salesmen and manage to make me buy car and the upgrades summore.

Posted by tftey > 2018-08-07 16:05 | Report Abuse

Good job done FutureEyes Thank You

Posted by tftey > 2018-08-07 16:14 | Report Abuse

Downside risk is about 10% but upside opportunity at 50% at current price RM0.88.

Posted by FutureEyes > 2018-08-09 19:36 | Report Abuse

Iron ore cost-effective for steel mills as price diverges from scrap

http://blogs.platts.com/2018/03/08/iron-ore-steel-mills-price-diverges-scrap/


Over the past five years, the price differential between domestic scrap and iron ore imports has averaged $200/mt. However, since scrap prices began to elevate precipitously in October 2017, the differential increased to a high of $332/mt in late December.

Posted by FutureEyes > 2018-08-11 15:19 | Report Abuse

The upgrade to 900,000 ton/yr was done in 2006 from 800,000 ton/yr in 2005.

This means the actual throughput potential is much higher than what C.S Tan mentioned in 2004 where it had produced 825,000 tons the previous year with effective productivity measures.

http://www.bursamalaysia.com/market/listed-companies/company-announcements/subscribe/4235/option2#/?category=AR

Posted by qqq3 > 2018-08-11 15:41 | Report Abuse

I think the stock market should be treated as a chess game, a war, You die better than I die. Plenty of liquidity, plenty of margin accounts, plenty of syndicates. Let the lucky ones survive.

But I don't promote fake news like this fellow....


http://klse.i3investor.com/servlets/forum/600168169.jsp

I think the authorities should close them down.....Fake news is very damaging......margin accounts, perfectly legit, perfectly legal.

Posted by hollandking > 2018-08-17 08:26 | Report Abuse

here we go again, blogs coming out

Posted by hollandking > 2018-08-17 08:26 | Report Abuse

more to come

Posted by Leonardo12 > 2018-08-18 10:53 | Report Abuse

Hi Future Eyes, may i know where you get the value for the electrical tariff, RM0.0152 per kwh? Thank you.

Posted by 3iii > 2018-09-04 08:05 | Report Abuse

PE 1. Why? How?