MULTIPLE CONTRACTS SECURED BY THIS COMPANY, WHY HASN’T ITS SHARE PRICE FLYING?
On 23rd March 2021, I had shared another article titled “THIS STOCK IS BEING UNDERRATED BY MAJORITY OF INVESTORS”. I had shared some of my personal views on Techfast Holdings Berhad (0084) on their RM 2,222,856,000.00, you may view the article here.
Little does investors know that TECFAST had successfully procured another contract with a value size of RM 540,000,000.00. Similarly, this agreement was inked between a wholly owned subsidiary of the company, Fast Energy Sdn Bhd with Huang Fan Sdn Bhd, where the subsidiary of TECFAST will supply marine gas oil (MGO) to the new client.
If you are wondering who is this “Huang Fan Sdn Bhd”, they are primarily engaged in the sub-contracting for sand related businesses. Their work includes but not limited to sand barrier projects, dredging, drilling, blasting, land reclamation, marine sand, reclamation, marine construction and subsea structures. Upon further due diligence, I had founded out that this company owns several vessels and one of them is Sierra Leone OCEANLINE 5001. You may check the vessel transportation line over here.
In this contract, the subsidiary of TECFAST would continue to delivery up to 6,000,000 liters each month for a total contract period of 45 months. Based on my rough calculation on MGO prices as well as monthly delivery, the MGO price should be calculated at USD 500 per MT.
However, the recent Suez Canal blockage had sent offshore support vessels (OSV) demand higher, and OSV in turn, would require MGO to sustain their business. Hence, aside from the contract itself, TECFAST is poised to benefit from the multiple contract it secured as well as the additional demand from OSVs.
As you can see from the share price movement, TECFAST has been trading in a tight range of 45.5 cents and 54.0 cents for quite some time. I believe investors had yet to recognize its value and due to leakage of information on the contracts the company secured and caused the share price to being manipulated by some of the "gurus". Nevertheless, the underlying profit for the company would gradually increase.
You may begin to accumulate around the support level of 45.5 cents. Any breach of the 54.0 cents might result in TECFAST flying again. Now it’s the best chance!