Dear friends of i3 forum,
Last month I picked Sasbadi as a turnaround play
This month is Annjoo Steel
Why Annjoo Steel now of all the Steel Counters in KLSE?
These are some salient factors:
1) ANNJOO STEEL HAS FALLEN TO ATTRACTIVE VALUE OF 44% BELOW NAV
At Rm1.35 with NTA of Rm2.40 Annjoo is now selling at a nice discount of 44% (It was over Rm3.80 at one time)
So now Price is down more than 60% from peak and is considered Low & Cheap with Margin of Safety
2) RECENT PROJECTS AWARDED SHOW SOME DEMAND FOR STEEL
The continuation of TRX, The Pan Borneo Highway & the recent over Rm300 Millions job award for MRCB showed demand for long steel products'
Another strong booster will be the restoration of ECRL (East Coast Rail line to Tumpat in Kelantan
3) In Good Times Anjoo pays good dividends
|27-Aug-2018||07-Sep-2018||DIVIDEND||Interim Dividend||RM 0.06|
|23-Feb-2018||19-Apr-2018||DIVIDEND||Interim Dividend||RM 0.13|
|22-Aug-2017||06-Sep-2017||DIVIDEND||Interim Dividend||RM 0.06|
|23-Feb-2017||08-May-2017||DIVIDEND||Interim Dividend||RM 0.09|
So can expect dividend support if sales continue status quo
4) ANNJOO IS VERY TRANSPARENT
Usual AR will report Top 30 Shareholders. For Annjoo it goes the extra mile to list up to Top 50 Substantial shareholders.
I am happy to note that many Big Foreign Funds are in Top 50 of Annjoo
2 notable ones are Public Mutual Fund & Eastspring Investment Fund
I also saw Eastspring in TMakmur which was taken private.
5) POWERFUL EARNINGS PER SHARE (EPS)
Last 4 Qr were
Total 32.98 sen
At Rm1.35 Annjoo has a P/E of only 4.09
Now is Annjoo performance sustainable?
6) ANNJOO IS EXPORTING STEEL TO SINGAPORE
According to i3 forum writeup...Among Masteel, Lionind and Southern Steel - Annjoo is the only one that export to Singapore Market
Business BackgroundAnn Joo Resources Bhd is primarily engaged in the manufacturing and trading of steel and steel related products. Business activity of the group is divided into two segments namely Manufacturing and Trading segment. Manufacturing segment consist of manufacturing of iron, steel and steel related products such as billets; mild steel round, angle, round, square, flat, wire rods; and black shafts; and Trading segment is involved in trading of steel products such as carbon steel, stainless steel, hardware products, building and construction materials and it also looks into the operations of steel service centers. Further, the group is also involved in investment holding and property management activity. Geographically, it operates in the region of Malaysia and Singapore.
And why is Singapore so important?
7) HUGE DEMAND FROM SINGAPORE FOR ANNJOO STEEL
Construction demand in Singapore to stay strong, reach up to $32b this year: BCA
JAN 14, 2019, 11:42 AM SGT
SINGAPORE - Construction demand is expected to remain strong this year due to sustained public sector contracts, as the industry continues to recover from a challenging three-year spell.
Lately some stocks have been force sold at lowest prices. But generally INSIDERS cost are anywhere from Rm1.70 to over Rm3.00
SO AT THIS LOW PRICE OF RM1.35 ANNJOO IS AN OUTRIGHT BUY
Calvin Tan Research