Koon Yew Yin 16 July 2021
After I read Mr Ooi Teck Bee’s latest buy recommendation as shown below, I offer my opinion so that investors can make a better decision to buy or sell.
Ooi Teck Bee’s Recommendation
- I spent the whole night reading through RHB’s report on Hiaptek, I am very impressed with the growth of Hiaptek. I do not want to miss out on this jewel of the east.
- TA of Hiaptek is just coming out from consolidation, it is bullish now. I do not want to wait for the share price to go up north further, I prefer to buy at a lower price as long as the share price crosses the 20-day EMA.
- The share price of Hiaptek closed at 0.56 on 15/6/2021 which is still cheap in terms of valuation.
- The share price of Hiaptek crossed major resistance at 0.545 convincingly on 11/6/2021, the share price has started to be bullish and I believe it will cross the peak at 0.705 soon.
- The trading volume of Hiaptek is low on 15/6/2021 due to weak market sentiment in KLSE. I believe it is the right opportunity to buy on weakness now.
- I am very bullish on the share price of Hiaptek, I believe the present share price is undervalued. The share price will skyrocket up the roof once good Q3 2021 results are released at the end of June 2021. I believe more investors will buy this stock later.
- Market rumour is a record PAT for Q3 2021.
- I believe the share price of steel stock will perform very well in the next 2 years because China is no longer exporting steel products below cost to the whole world. I hope the next up cycle starts again after a minor correction is over. China steel prices rebounded strongly in the last week.
- The share price of steel stock 20 years ago was very high because there was no dumping of steel products below cost from China. I believe the share price of steel stock will rise up slowly and surely in the next 2 years.
- I believe Covid-19 pandemic is slowly recovering in 2021 because of the effective vaccines. Once Covid-19 pandemic is under control, all industrial nations worldwide, especially European nations and the US will start to spend money on infrastructure, it will boost up the usages and the selling prices of steel products.
- US President Biden’s infrastructure plan will cost USD 2.2 trillion. I believe the steel products worldwide will be in a bullish uptrend for the next two to three years. Hence I have very high hopes for steel stocks listed in KLSE since China is no longer dumping steel products below cost in the world markets.
- Hiaptek has a very good fundamentals if you read RHB report in great details. I am very impressed by the strong growth of Revenue and PAT in 2021 and 2022 respectively. I believe the good FA of Hiaptek will justify the share price to be at least at 1.00 in 2021 and 1.75 in 2022 respectively. Buy and hold will be a very good strategy to win big on this stock.
- Hiaptek is no longer a penny stock after 2021, the Revenue is more than a billion in 2021. It is one of the major steel manufacturers and traders in Malaysia. LeonFB, Melewar and Choobee are in no way to compare against Hiaptek after 2021.
- I am recommending a buy on Hiaptek and I will follow the target price of RHB at 1.00.
- I recommend buying Hiaptek around 0.55 level. You can chase up the share price until 0.57. If you buy at 0.57, the potential gain is 75% which is still a high ROI in 2021.
The final decision to buy is always yours.
Back ground of Hiap Teck:
Hiap Teck Venture Bhd is engaged in investment and property holdings, and the provision of management services. Its segment includes Trading, Manufacturing, Property and investment, Transportation, and Mining exploration. The Trading segment involves operating as an importer, exporter and general dealer of steel products, hardware, and building materials. The Manufacturing segment involves in manufacturing, renting and distributing of steel pipes, and other steel products. The Property and Investment segment is engaged in renting out property and investment holding. The Transportation segment includes a provision of transportation of goods by lorries and the mining exploration segment consist of exploring, contracting and activities related to the mining, processing, and sale of iron ore.
How does MCO affect Hiap Teck?
MCO is restricting the movement of everybody. Workers cannot go to work for Hiap Teck. Even if Hiap Teck can produce some steel products, building contractors will not buy Hiap Teck’s products because construction workers cannot go to work.
As a result, Hiap Teck will report reduced profit in the next few quarters until Covid 19 pandemic is fully under control. Many medical experts predicted the Covid 19 pandemic will take at least 1 or more years to fully under control the spread of the virus.
Hiap Teck is just like one of the 10 steel companies namely Leon Fuat, Choo Bee, Mycron, Prestar, L Steel, Melewar, Tashin, Astino and CSC Steel.
Currently Malaysia has a total of 868,000 Covid 19 cases and 6,503 deaths. These 2 figures are still surging as show on the chart below.
Hiap Teck’s price chart above shows that it has been dropping in the last few months and investors might be tempted to buy it at cheap sale. Due to MCO, Hiap Teck will remain cheap for a long time until no more MCO.
First lesson in investing is never buy down trending stock.
I just rang Hiap Teck tel. 03-33778888, Choo Bee tel 0-32918822 and Leon Fuat tel 03-3753333 and I found out that all these 3 steel companies are close for business. You can also ring to verify what I just said.