ASTINO (7162) - Astino Berhad - Hard Steel Aston Martin

ASTINO (7162) - Astino - Hard Steel Aston Martin

Astino Berhad (Astino - 7162) could be an unpolished and under sighted gem that is reaping on the benefit of a better profit margin from it's steel manufacturing and marketing. This could probably have to do with the nature of business that Astino is dealing in with a wide mixture of steel products ranging from scaffolding, roofing, pipes and joints to PVC material and also Agro House Multi System for poultry feed stock.

However, with the steel division contribution most of the revenue and profits, it is unreasonable that the current strong theme play should see a fundamentally strong company like Astino to be left out in the dark. While some might have the perception that Astino is a Penang based company that caters for the northern region, it is notable to see that Astino actually had 2 plant up and running in Bukit Beruntung that is mend to penetrate into the central region of the Peninsula Malaysia, with the latest new plant up commencing and running since 3Q of 2015.

Strong Steel Theme

Steel player are celebrating hard and high, with most of the steel company turning into the black after a stint of quarterly losses, with some having their share prices surging to a 5 year high. Here are some of the example on the performance of the local steel company in KLSE recently.

AISB

Annjoo

CSCSteel

LSteel

Masteel

Mycron

YKGI

While some are fundamentally strong, but a turn around company such as YKGI, AISB, LSteel are running above it's presume valuation based on earnings.

Strong Fundamental

As per shown on the 3Q financial result, it is noted that Astino had a cumulative earning of 8 cents per share, backed with NTA of RM 1.08. Reeling on with a better margin and more demand in it's metal roofing division, it will not be shy to see Astino putting up with a strong Q4 to mark a strong closing for FYE 2016.

According to close sources that are familiar with Astino, Q4 result will not be seeing anything lesser than a EPS of 3 cents. Taking into count, Astino is capable of valuation at RM 1.10, based on PER x10 on EPS 11 cents.

To put it into technical reading, we can see that Astino had a great support at RM 0.75, and had been trending on a gradual up trend basis for the past 3 months. It is expected that Astino could be delivering it's final set of result for FYE 2016 in the coming week.

Given all the positive figures, it will not be a coincident that director Mr Ng Back Teng had proceeded to acquire from the open market at price of RM 0.777 per share, reflecting the confidence in the future prospect and direction of the company.


Gradual beneficial from Zika outspread

Astino Modern Design
Insect Netting System

While it is a fact that the Zika is spreading across the globe, it had reached Singapore, Indonesia and now Malaysia. The virus which is heavily linked with birth defect (microcephaly) and some other health complication do not have any antidote other than natural healing. World Health Organization is looking at a time frame of approximately 5 years for R&D and commercial production of the vaccine, which means that the human being in the world are only left with the "prevention" method in tackling with Zika, where the main carrier of the virus is from Aedes Mosquitoes.

While most of the people will be easily linking the Zika outspread with gloves company, it could make almost no sense with a steel manufacturer like Astino. Little that we know that Astino actually manufacture insect netting system in their steel division. This product will be in a rising demand as long as Zika continue to spread in infected countries, and will be sought after by landed property as well as high rise condominium. By the way, it is not a myth that mosquitoes can actually fly up to 15th floor of your apartment.


Conclusion

To summarize on Astino, it is an overlooked company despite the current strong steel trend. Moreover, it's existing fundamental are strong enough to back on the projected future earning. Astino could be interesting over next coming week on the final quarter financial result for FYE 2016.


Bone TP : RM 1.10 

ASTINO (7162) - Astino - Hard Steel Aston Martin
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