Today all steels counters was panic due CSCSTEL result. Different management will have different direction, we can't directly implement CSC result to all steel companies.
newbb, as I mentioned last time, SSTEEL increase its borrowing to payoff its trade payable. This is because majority of its trade payable are in foreign currency, as MYR is weakening every month, it is a smart decision made by the management, to reduce the exposure in foreign exchange.
Now the company back on the track and can continue generate more profit, so I believe very soon company can announce bonus issue. (unlikely will declare high dividend, as this company need to reserve more cash on hand).
Once bonus issue announce, many ICULS holder will convert their ICULS to mother share, and company can save the interest cost, but EPS will be diluted as well.
Annualized EPS would be 34 cents. A conservative PE is 5. First TP should be RM 1.6-1.7. But we know so far 2017 steel price in Jan-Feb has been higher. If steel price can maintain at current level, 40 cents EPS for 2017 should be achievable given all the macro factors. With QR progressively reporting more stable +ve profits the PE ratio also will climb. 40 cents x 7 = RM 2.80. Maybe can hit this price wafted another 2 QR if everything goes smooth.
Is my simplistic projection reasonable?
Btw, congrats everyone! I'm an ikan bilis but nonetheless am happy that I'm on this boat with you all.
The report mentioned that the impact of the safeguard duties imposed on China is reduced because there're imports from other countries. Selling price is unlikely to go up much further given weak local demand. Margin will be under pressure with increasing cost of raw material. However, management will continue to improve on the operational efficiency and productivity. Trying to under promise to over achieve later...?
quek companies is always very good in cost-control. They have many committee set-up to put all the relevant controls and to achieve operational excellence. Trust SSteel share price will be closed to Ann Joo. Buy and keep when the company turnaround just started.
Opened at 1.44 all the way up to 1.49. Then heavy selling to push the price back to 1.44. Is this how big players play the game? Collect again later so that they get to make the profit in that price range twice?
When l bought VIS also like this. It needs few hours or days to convince people this is a undervalued gem. Forward PE too low. This is a good opportunity to collect, let's see afternoon session.
China rebar is going up again, it makes imported steel more expensive, local steel producers will have better positions to compete with these importers.
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Posted by speakup > 2017-02-14 09:27 | Report Abuse
Mr Koon dumping CSC!!!!