You are only half right lcng123.... Hexza actually produces alcohol and ethonol used for medical disinfectant and cheaper mouth wash or germacide... It has very high demand and the price can spike relatively high. Usually for virus strains, the use of harsh chemicals are used vs for bacteria disinfectant...
Finance director already said during AGM that NOT A SEN of the Tembusu project can be recovered because the Myanmar/Sinkie cheat put all the assets in other ppl's names. & is in hiding.
I treat Hexza as a cheaper entry into bullish positions in Apple, Alibaba, Nvidia & Facebook...which they can sell into the current market for huge profits =)
Luckily I also nibbled a little more just before the ex-dividend date, buying a little bit at below 80c & getting an extra $100 dividend...I think I hold till end-2020 so that my passive dividend income will be higher than 2019's.
The returns on their investment is fantastic with the tech rally plus the business is booming and will continue to support a super high utilisation of their ethyl alcohol biz. Its the main material for sanitizers which is facing a shortage. Hope this year gives us 10sen or better dividend. Tq hexza!!!!
Compared with a stock like Salute which has almost double the no. of shares, very low NTA & less steady earnings, which I thankfully escaped from last week @ 1.005 when it hit a 52-week high, Hexza is dirt cheap! Glad I made the switch to buy MORE Hexza last week!
I sold 12% of my holdings @ the open 84.5c this morning & another 16% @ 82.5c in the afternoon just in case I can buy back cheaper if Apple plunges tonight...
Raising cash seems to be the best move in the current jittery environment!
Apple is trading at $318, highest by far on a PE of abt 25x...if you base out of the charts of consumer spending post SARS and H1N1, there is a 30% uptrend in the 12 months post an pandemic..... So expect prices to move up..
Price increased: the surge in demand for ethanol had driven up prices by up to four times.
“The prices started going up about two to three weeks back from RM4.50 a litre to close to RM18.
Demand spiked: The effects of the demand surge for sanitising products have also rippled further upstream.
At the ethanol manufacturing end, Chemical Industries Malaya Sdn Bhd (CIM) said the jump in its sales figures was “quite substantial”.
“We have seen a huge increase in orders since the start of February from all our customers, especially those involved in sanitisers and disinfectants,” said Mr Aureole Foong, the CEO of Hexza Corporation, CIM’s parent holding company.
“Sales in just the first week of February have already exceeded our monthly average over the past few months,” he added.
According to Hexza’s website, CIM’s annual production of ethanol and related alcohol products stands at 9 million litres, with 70 per cent of output going to the local market.
While strongest demand still came from local customers, CIM has also received overseas requests during this crucial period, Mr Foong said.
Sell out all 9m liters at a profit of RM5 per liter, that's rm45m ppl
Ethyl alcohol prices moved up again... Small 1 liter bottles selling up to rm31. Some dealers are running out of stocks. I hope hexza can run maximum capacity and capitalize on the demand. It should remain very high for the better part of the year. Maybe they shld just produce hand sanitizers and maximizer revenue stream during this time.
Actually there's serious shortage of Alcohol in the market. Heard from a friend who's working in the hospital says that they are trying to make their own sanitizer/disinfectant but short of Alcohol. And you are right ppl chasing glove and mask manufactures but forgot about alcohol producers.
Hexza is the largest producer. Prices have shot up. Hexza shld seriously get into the hand sanitizer biz to add value. 250ml bottle of genuine 75% Alcohol content selling for RM18 per bottle. Cost might be closer to rm6 or less. Everyone has gotten into the habit of hand sanitizing these days. The trend would stay strong. Other products include medical wipes and swabs for disinfecting when you get the jab.
Ethonol business will be up, not sure will fully cover the fall in the resins business. The revenue in the resins segment will be impacved by the MCO. Have to wait for next quarterly report. Agreed with the comments above, would be good to venture into hand sanitiser business.
Demand for resin products could be lower during the shutdown but malaysia produces and exports a lot of plywood and MDF. Resin is also priced based on benzene and solvent cost which is much lower now. ×************************* 2019 annual rpt ****** Our resins division is involved in the manufacturing and sale of formaldehyde-based adhesive resins for timber-related industries. Operating out of Kuching, Hexzachem Sarawak Sdn. Bhd. is considered as one of the biggest producers of formaldehyde-based resins in East Malaysia. Our adhesive resins are used in the production of export quality plywood, particle boards and medium density fibre boards. A significant amount of our Group’s earnings is also contributed by our investments. Hexza expanded its business to Sabah via its minority stake in Norsechem (Sabah) Sdn. Berhad, which started operations in 1985 and was the pioneer resins manufacturer in Sabah. Our investment in Norsechem (Sabah) Sdn. Berhad has consistently delivered dividend income for the Company over the years.
******×************************
There would be pent up demand and a surge after MCO as the economy starts moving again. The resin biz was delivering OK margins the last 2 years on a decline. It could be lower but again cost could be an offset. The other thing to note is that saw Mills would prefer to convert logs to plywood where the resins are used in glue. It is also used to preserve logs from rotting, esp secondary recovery.
Hexza is cash positive and has a strong balance sheet plus they are blessed to be in the best business (ethonol) in the worst of times. I believe the resin biz will pull through as well.
Lifting MCO forces businesses to take precautions, spike in demand for PPE and hand sanitizers. Value potential for hexza far lagging.. QR in a couple or weeks should surprise everyone..
This book is the result of the author's many years of experience and observation throughout his 26 years in the stockbroking industry. It was written for general public to learn to invest based on facts and not on fantasies or hearsay....
lcng123
1,127 posts
Posted by lcng123 > 2020-01-22 11:53 | Report Abuse
Hexza won the court case against Tembusu Singapore. Will it be able to claim back the money from Tembusu ?