Posted by NEL7989 > 2022-07-22 22:00 | Report Abuse

Price of iron and steel has dropped significantly and will continue to drop as demand in China is slow at the moment. Some companies have high inventories due to forward buying when the price were rising (purchases were made around March-April) in anticipation of higher price of steel in months to come - this never materialize of course. Some are currently off loading it at a loss. It also impacted some building material companies. We will see the impact in next quarter reporting.

Posted by firehawk > 2022-07-23 07:57 | Report Abuse

Thanks for the posting ..........
seemed that their capex in 2021 /22 were very high ... they think years coming would be good for their product?

Posted by scweehan > 2022-07-23 08:44 | Report Abuse

Thank you for your writeup. I too lost on the steel counters, buying into the hype of low PE.

Posted by Sslee > 2022-07-23 10:36 | Report Abuse

Winning or losing money on 'X' or 'K' factor is somone specialist.

Posted by CharlesT > 2022-07-23 11:32 | Report Abuse

Learn how to catch cyclical stocks such as steels, oil n gas, plantation etc

Timing is everything.

Buy at low n buy more when prices started to climb n sell phase by phase along the uptrend.

Of course talk cock (buy low sell high or sell high buy low) is easy. In real life it's not as simple as that.

But one golden rule when u see lots of sifus or seafood started to give sky high TPs with essays long calculations then it's time to......

Posted by CharlesT > 2022-07-23 11:35 | Report Abuse

After Glove Saga it seems to me the goreng cycle (plantation n refineries) becomes shorter n faster.

Posted by PureBULL ... > 2022-07-23 11:46 | Report Abuse

WE R IN AN ENDLESS FIN EXAM

Players capable of spotting the topic or theme.play will be the national top scorers.

There r 2 to 4 cycles p.a. of BIG money on KLSE.
In this 1st half of 2022, there were 3.
all of them, ev.metal, palm oil n oil refinery themes were GG bcos:
their weekly prices, C ;
C < ema18 = purebear
C < ema42 = big purebear = could take long long time to be played by Mr Mkt again.
at best could REBOUND.

PLAY WHAT MR MKT WANTS TO PLAY UP
Nobody knows what Mr Mkt wants to play yet in the 2nd half of 2022.
Am just too early to guess GLOVE as TG is showing high daily vol consistently.
it could not be TECH or what not!

When Mr Mkt shows the THEME, it will be outstanding n majestic,,, always,,
we will follow u, Mr Mkt,,

NB:
Each theme.play enter at right.timing has potential profit of 40 to 80%. tis the way to CAGR.
nobody losses by taking a profit, advised by sir templeton.

Posted by PureBULL ... > 2022-07-23 11:57 | Report Abuse

WHO DO U FOLLOW IN STOCKS?

wallstreet pro said;
there is only 1 warren B + Charlie M in the entire world

BUT

there r many g Soros.

It just prompt us that
g Soros has the invincible model:

G SOROS - "Economic history is a never-ending series of
episodes based on falsehood and lies, not truths.
It represents the path to big money.
The object is to recognize the TREND whose premise is false,
ride that trend, and step OFF before it is discredited"

G Soros is an uptrend purebull follower n is advising us to focus on the big money.

Jim Rogers - "Figure out the money and you’ll figure out what’s going on."

Jim Rogers is asking us where is the big money in charts n to find them ourselves.

Posted by Tobby > 2022-07-23 12:12 | Report Abuse

Steel hard to say! Cannot just lump sum together! Vietnam and Indonesia are booming! So those steel providers for this markets are thriving! those mainly focus on China will die!

Posted by BLee > 2022-07-23 13:32 | Report Abuse

A very good write up and very easy to understand the effects of unsold stocks valuation. I hope the next write up will be on palm oil and crude oil refinery stocks.
A recent report on palm oil storage fully filled up all available storage in our neighboring country could be a big concern for future palm oil prices.
It is the same for crude oil refineries, the refineries with bigger storage capacity will have bigger profit margin when crude oil price increases. It is vice versa if the prices drop. It will not be accurate for crack spread calculation if based on another neighboring country due to its massive storage capacity.
Happy Trading and TradeAtYourOwnRisk

Posted by kcchongnz > 2022-07-23 21:44 | Report Abuse

qqq3333

to cut a long story short, steel is not a popular theme at the moment, every thing else is just rationalisation and justifications because investors didn't make money. .........losing money on low PE? that is what kcchong the value investor is a specialist.

Losing money in low PE? Which stock?
Jaks at RM1.50?
Sendai at RM1.40?

I have written numerous article about your dynamite investing, margin financing on those two stocks. Anybody can google them in i3investor.

Or was it London Biscuits at RM2+? KNM at RM1+? Alcom at RM1.20+?, AYS at 90 sen+? Or Subur tiasa at RM2.50?

Or was it your English is so bloody poor that when I say North and you go the opposite direction to South?

Posted by kcchongnz > 2022-07-24 09:37 | Report Abuse

Posted by BLee > 18 hours ago | Report Abuse
A very good write up and very easy to understand the effects of unsold stocks valuation. I hope the next write up will be on palm oil and crude oil refinery stocks.
A recent report on palm oil storage fully filled up all available storage in our neighboring country could be a big concern for future palm oil prices.
It is the same for crude oil refineries, the refineries with bigger storage capacity will have bigger profit margin when crude oil price increases. It is vice versa if the prices drop. It will not be accurate for crack spread calculation if based on another neighboring country due to its massive storage capacity.
Happy Trading and TradeAtYourOwnRisk

Palm oil is different from the steel. You can't simply open up new land and plant palm oil like open up new factories to produce steel. You can't plant palm oil in China. The industry is cyclic though.
If you look at the financials of palm oil company, ignoring company like TDM and Subur Tiasa, most of them have positive cash flows from operations much higher than their net income every year. They have free cash flows 70% of the time in all those years. Most steel company overall can't even have positive cash flows from operation most of the years, not to mention about free cash flows.

Posted by kcchongnz > 2022-07-24 10:40 | Report Abuse

CharlesT
Learn how to catch cyclical stocks such as steels, oil n gas, plantation etc
Timing is everything.
Buy at low n buy more when prices started to climb n sell phase by phase along the uptrend.
Of course talk cock (buy low sell high or sell high buy low) is easy. In real life it's not as simple as that.
But one golden rule when u see lots of sifus or seafood started to give sky high TPs with essays long calculations then it's time to......

Wonderful comment, especially the last two sentences. Thank you.

Posted by BLee > 2022-07-24 11:48 | Report Abuse

@kcchongnz: Palm oil is different from the steel. You can't simply open up new land and plant palm oil like open up new factories…

BLee: Hi Uncle @kcchongnz, agreed Palm oil is different from steel as we cannot compare apples with oranges. We are on the topic of "Storage Capital Gain and Losses"; Steel does not have expiry date but Palm oil does. Certain Steels have their own strength and usage, but Palm oil is just an alternative to some others edible oil. Cost plays a very important part in marketing of Palm oil, once the cost is no more affordable, alternatives will be found.
I now prefer Butter over Palm oil based products for my bread spread…
This is just a topic for discussion, no malice intended. Thank you for a very interesting article.

Posted by anthonytkh > 2022-07-24 16:50 | Report Abuse

Steel counters own considerable assets that they can monetise without actually losing any revenue by disposing them to raise much needed cash to pare down their large borrowings (which has gotten more expensive and likely even more by year’s end due to rising interest rates) but they steadfastly refused, or declined to use a more diplomatic word, after I approached a number of the companies for such a fund raising exercised based on my proposals. I wish them well. I own free shares in one of the companies mentioned by the article author

Posted by Sslee > 2022-07-24 20:01 | Report Abuse

Steel counters own considerable assets that they can monetise without actually losing any revenue by disposing them to raise much needed cash to pare down their large borrowings???

Please elaborate!

Posted by anthonytkh > 2022-07-24 20:30 | Report Abuse

Sslee, please check steel counters (and even metal counters, including aluminium) and majority constituents of their non-current assets (which plays a HUGE role in their balance sheet especially regarding their leverage). Read their annual reports (usually either right before or right after major shareholders page)

Posted by stockraider > 2022-07-25 14:48 | Report Abuse

Negative cashflow usually not so good mah!

Bcos less cash and more borrowing mah!

Posted by stockraider > 2022-07-25 14:57 | Report Abuse

Usually bad mah!

Unless proven otherwise loh!

Posted by ks55 > 2022-07-25 15:00 | Report Abuse

kcchongnz vs qqq. Close both eyes also support kcchongnz. Proven time after time.

Posted by ks55 > 2022-07-25 15:01 | Report Abuse

Too many questions to ask qqq. qqq means question, queston and question.

Posted by ks55 > 2022-07-25 15:05 | Report Abuse

Sorry. Now have to question 4 times instead of 3.

Posted by ks55 > 2022-07-25 15:11 | Report Abuse

What happen to Since Die? Anybody need to dig back those comments ever since already die?

Posted by ks55 > 2022-07-25 15:33 | Report Abuse

What has happened to your 100k capital? All gone by now?

Posted by ks55 > 2022-07-25 15:35 | Report Abuse

Stock: [HENGYUAN]: HENGYUAN REFINING CO BHD

Jul 15, 2022 12:37 PM | Report Abuse

Look at Jaks. Look at Sendai. And look at Hiap Teik.
All these stocks were heavily promoted at the time sifu gave all the 'facts' and 'figures'. Are those so-called 'facts' and 'figures' still good? All those 'facts' and 'figures' had changed because those companies fundamentals all changed?
Can someone please explain?

Now again look at HYR. Had the fundamental of this company changed since it was first heavily promoted in 2018, then in the year of 2022? Can you tell the difference when its was promoted during that period? Was there any cut loss mechanism in play?

Posted by ks55 > 2022-07-25 15:50 | Report Abuse

But now all the 100k capital already down the drain.

Posted by ks55 > 2022-07-25 15:54 | Report Abuse

Do you need my help to get back your 100k capital? Ask and you will be taught!

Posted by anthonytkh > 2022-07-25 17:09 | Report Abuse

The various steel counters gotta seriously think about monetising their fixed assets and turn them into current assets. The “problem” is that their steel biz is only half of their bosses’ thinking… the other significant half are their fixed assets. If their steel biz, and the entire steel industry, collapsed… they still have their fixed assets as insurance. The issue of shareholders concern will be dealt with when such a dire situation arrives

I still have hope for the steel industry in Bolehland. But it’s just a bad time now and has been for quite a few months with major infra projects being the way they have transpired….

Posted by anthonytkh > 2022-07-25 17:10 | Report Abuse

“If” such a dire situation arrive… sorry… I forgot to be careful :)

Posted by kcchongnz > 2022-07-25 18:03 | Report Abuse

Posted by qqq3333 > 3 hours ago | Report Abuse
negative cash flow/ positive cash flow...............neither good or bad. U have to know the company well and spoken to the directors to have the full picture. Just like increases in debtors/ stocks is not good or bad, ..... the devil is in the details , it always Depends ............................... of course, in bear markets , people want to avoid risks , that is normal.........in bull markets, people seeks risks........... that is also normal.

A few years ago with your dynamite investing and sex factor, you disputed with me the poor cash flows of Sendai. You wrote articles touting that stock and I said the cash flows were precarious. That time the share price was RM1 +.

So you must have attended the talk by the super investor, and listened to the boss of Sendai that everything okay and no problem. Do you still hold Sendai shares?

Posted by kcchongnz > 2022-07-25 23:42 | Report Abuse

Posted by anthonytkh > 1 day ago | Report Abuse
Steel counters own considerable assets that they can monetise without actually losing any revenue by disposing them to raise much needed cash to pare down their large borrowings (which has gotten more expensive and likely even more by year’s end due to rising interest rates) but they steadfastly refused, or declined to use a more diplomatic word, after I approached a number of the companies for such a fund raising exercised based on my proposals. I wish them well. I own free shares in one of the companies mentioned by the article author

Thanks for your excellent comment. You know the industry well, better than me. I presume the fixed asset you mentioned is the property, and not plant and equipment which won't fetch much money on sales.

Take Leon Futt as an example. its business has been sucking cash. Last 5 years, there was a total outflow of RM286m. How much the company has in land and property to sell without hurting its core business, and than do what later?

Besides, many steel companies also got large amount of total debts of about RM400m.

Posted by anthonytkh > 2022-07-26 07:22 | Report Abuse

I had actually been invited by one of the steel companies to meet their team after I approached them quite a while ago

When I mentioned sell their assets, I didn’t mean selling them outright. They need their assets for their core biz. I’m talking about sale-and-leaseback

Yes, the company would have to pay rent. But they would make a profit from selling the asset due to capital appreciation. And investors that buy the asset are not like banks. You take a loan from the bank to buy the asset and the bank don’t care about the asset. Investors care about the asset

Posted by Mikecyc > 2022-08-08 16:55 |

Post removed.Why?

Posted by stockraider > 2022-08-09 16:13 | Report Abuse

The problem of the majority of steel companies are they speculate in their steel inventories loh!
Meaning that they invest more than necessary on their steel inventories loh!

Only 2 companies do not, do that namely choobee & csc.....these 2 are cash rich mah!

So their earnings are of better quality loh!
Posted by kcchongnz > 2 weeks ago | Report Abuse


Posted by anthonytkh > 1 day ago | Report Abuse
Steel counters own considerable assets that they can monetise without actually losing any revenue by disposing them to raise much needed cash to pare down their large borrowings (which has gotten more expensive and likely even more by year’s end due to rising interest rates) but they steadfastly refused, or declined to use a more diplomatic word, after I approached a number of the companies for such a fund raising exercised based on my proposals. I wish them well. I own free shares in one of the companies mentioned by the article author

Thanks for your excellent comment. You know the industry well, better than me. I presume the fixed asset you mentioned is the property, and not plant and equipment which won't fetch much money on sales.

Take Leon Futt as an example. its business has been sucking cash. Last 5 years, there was a total outflow of RM286m. How much the company has in land and property to sell without hurting its core business, and than do what later?

Besides, many steel companies also got large amount of total debts of about RM400m.