Sunday, 24 June 2012
Debt free company with recently going to ex - dividen in June ( 7 cents/ ~5%)
The profit margin reduced due to increase operating cost, competitive environment etc...
Fong Siling , Malaysia FA stock investor has 1 million shares in this company. Lembaga Haji also buy this stocks on its weakness.
I think that at current level, it is a safe bet and just the matter of time to prove this company going to rebound from the bottom.
RM 1.33 -1.36 (safe entry)
Will it rise? let wait and see.
Operating environment in the ﬁ rst quarter of 2012 has not seen much improvement in the steel market sentiment even
though there had been attempts by steel makers to stimulate the pick up in selling prices.
Although hopes are high for an uptrend in market demand to take place in the second half year, the positive outlook for the
second half year is very much dependent on the outcome of the world economy especially efforts taken by the European
Union to resolve its debt crisis which till now, is still not quite out of the woods yet, and China’s economic slowdown
which is expected to impact the global economic growth.
Another external risk is that tensions in the Middle East will cause another oil price spike which may exacerbate the
already fragile global economy.
On the domestic front, we expect the on-going high impact projects under the Malaysian Government’s Economic
Transformation Programme (“ETP”) to have a stronger positive effect on the local steel industry and unleash more demand
for our steel products as more projects promised by the government under the ETP comes on stream as planned and
implementation of the ETP projects picks up momentum.
On the bigger picture, the Group has to prepare itself to face stiffer competition from the on-going liberalisation of the
Free Trade Agreements in the ASEAN region and the effect it will have and the changes that it may bring to Malaysia’s
Iron and Steel Policy.
Several signiﬁ cant revamping projects are in the pipeline to further heighten the Group’s competitiveness.
The Group continues to look into available opportunities to broaden its market reach such as tapping into the regional steel
markets especially Indonesia, which has huge growth potential in steel consumption for years to come.