Cement counters lead the way in upward cycle. Can the trend continue?
Hume Cement Industries Bhd surged 31% to close at its 52-weeks of RM1.26.
Investors are positive the company reported strong third quarter earnings.
Hume Cement's net profit for the third quarter ended March 31, 2023 rose to RM27 million from RM1.9 million a year earlier on revenue of RM289 million versus RM191.8 million.
The better revenue and earnings were mainly due to revision in cement retail selling price and higher cement sales value.
For the nine months ended March 31, Hume Cement posted a net profit of RM19.4 million versus a net loss of RM1.8 million on revenue of RM751 million versus RM513.3 million.
The counter fared well to rise to the current level from a low of 76 sen.
The positive sentiments are expected to continue with the pick up in demand for cement.
Other than Hume, Malayan Cement Bhd also saw an uptrend, gaining 7.3% to reach RM2.64 on March 17.
But there are concerns on Hume’s huge debt levels of RM624 million versus total equity of RM363 million.
In addition, there is the issue of overcapacity in the cement industry compounded by cheaper imports when local prices go up.
On a positive note, RHB Investment Bank Research expects cement sector to be looking optimistic, due to relaxing Covid-19 restrictions in China and expectations of the rate hike cycle entering its tail-end.
As such, it foresees commendable quarterly earnings from Malayan Cement, which is in the basic materials sector.
The research house anticipates earnings of Malayan Cement to be buoyed by sustained cement average selling prices (ASPs) and a sequentially lower cost of production.
The sustained cement ASPs stays elevated at RM390/tonne as of March (flat month-on-month [MoM]) due to the elevated time lag in passing through the spike in coal prices by local cement producers.
RHB stays optimistic on the cement sector due to the recent sharp correction in key raw material prices, ie coal (around 50% of total production costs) by an average of 50% year-to-date.
It also expects potential improvements in operating efficiency post industry consolidation in West Malaysia.
The upward cycle in share prices of cement counters is probably no coincidence given the positive outlook on the industry. Investors just might cement good gains in such counters.
#HUMEIND#MCEMENT
https://xifu.my/OpinionsComment.aspx?BID=B04183213PCAA0D1
Singapore Investment
-
-
Lloyds Bank2 hours ago
-
-
-
-
-
-
-
-
-
-
-
Hidden Traps (and Benefits) of Instalment Plans21 hours ago
-
Best Areas in Phnom Penh to Buy Property22 hours ago
-
Grab expands menu with Chope acquisition22 hours ago
-
-
-
-
Orchids of Angkor Wat1 day ago
-
-
-
-
Few Reflections1 day ago
-
Die With Zero (Bill Perkins)1 day ago
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Weekly Market Outlook5 days ago
-
-
-
Top 5 Dividend Stocks on SGX5 days ago
-
Be anti-fragile5 days ago
-
-
-
-
-
-
-
-
-
-
-
随心笔:忧郁1 week ago
-
-
-
Finance Investment Movement 471 week ago
-
-
-
-
-
SG GEMS 2024 by AlphaInvest2 weeks ago
-
-
Lentor Hills Residences2 weeks ago
-
MIT vs MLT. Which To Choose?2 weeks ago
-
-
-
-
Monthly IBKR Update – June 20242 weeks ago
-
-
-
At the Half Year Mark3 weeks ago
-
-
-
-
-
-
Portfolio Summary for June 20243 weeks ago
-
-
-
-
-
Jun 2024 Portfolio3 weeks ago
-
Gone Fishing3 weeks ago
-
2Q 2024 Investment Strategy Update3 weeks ago
-
A Giant Sucking Sound…4 weeks ago
-
-
Portfolio (June 30, 2024)4 weeks ago
-
-
Oh My Spins Casino Login App4 weeks ago
-
-
-
-
-
-
-
-
Free money again! Don't say #bojio.1 month ago
-
-
-
-
-
-
-
Breakthroughs in portfolio :)2 months ago
-
Bond Coupons vs Rental Income2 months ago
-
-
-
Resilience and Adaptability = Confidence2 months ago
-
-
-
China’s going downhill?2 months ago
-
-
iFAST 1Q24: Firing on all cylinders2 months ago
-
-
2024 (Portfolio Update)3 months ago
-
-
Feb 2024 Expenditure4 months ago
-
New Bitcoin All Time High Before Halving4 months ago
-
-
-
The Market Is A Scam!4 months ago
-
-
-
-
Options Trading Journal Jan 20245 months ago
-
-
-
-
-
Year 2023 DIYQuant Portfolio Performance Report6 months ago
-
Monthly Summary of November 20237 months ago
-
Migration of website8 months ago
-
-
-
-
-
-
-
-
-
-
-
-
A New Light1 year ago
-
-
-
-
-
-
-
2022 Thoughts, Hello 2023!1 year ago
-
Series of Defaults for Maple Finance1 year ago
-
Takeaways from “Sea Change”1 year ago
-
Greed is Coming Back1 year ago
-
-
-
-
-
-
-
-
-
-
-
What is Overemployment2 years ago
-
Terra Hill Condo (former Flynn Park)2 years ago
-
Alibaba VS Tencent: The Battle Royale2 years ago
-
-
-
-
-
-
-
-
-