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| Hupsteel posts 39% fall in 2Q net profit to $1.9m |
| WRITTEN BY THE EDGE |
| THURSDAY, 10 FEBRUARY 2011 17:25 |
Mainboard-listed Hupsteel says the group posted a 39% fall in profit after tax for the quarter ended 31 December 2010 (2QFY11) to $1.9 million from $3.1 million in 2QFY10. Revenue remained flat at $44.1 million. Lim Kim Thor, CEO of Hupsteel, says, “With rising raw materials costs translating into higher steel prices coupled with a soft market demand, gross profit margin faced a downward squeeze during the period. As a result, gross profit for 2QFY11 and 1HFY11 fell to $6.5 million and $13.0 million from $8.4 million and $14.3 million for 2QFY10 and 1HFY10 respectively. Consequently, profit after tax also fell to $1.9 million from $3.1 million reported for 2QFY10. The comparative figures in 2QFY10 and 1HFY10 were boosted by write back of $1.5 million and $2.5 million respectively of provisions for inventory write-down made earlier. I am pleased to report that 2QFY11 profit after tax was better than the $1.8 million reported for 1QFY11.”
“The recent flooding of the Australia coal mining regions is likely to affect coal supply in the short term and since coal is needed in the production of steel, steel supply may be curtailed in the coming quarters. This may lead to further price increases. With shipyards announcing more new orders in recent months, there are signs of a firming up of demand for steel products in the coming quarters,” Lim adds.
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Time for this to move up now. Hit 0.3 now... cheer
Time for this counter to soar this year. CHEER
Singapore, 10 November 2009 - SGX Main Board-listed HUPSteel Limited (“HUPSteel”
or “the Group”),
67.5M;1QFY09: $111.7M) for the quarter ended 30 June 2009 (‘1QFY10’) with net profit
after tax of $1.9M (4QFY09: $2.6M;1QFY09: $11.9M) amidst challenging economic
conditions.
The Group maintained a strong cash position with cash and cash equivalents of $72.5M at
the end of 1QFY10 (4QFY09: $53.5M) while the balance of trade and other receivables
reduced to $37.2M (4QFY09: $62.5M). With reduced demand for its products, the Group
slowed its purchasing activities resulting in a smaller inventory holding of $59.2M (4QFY09:
$67.1M) and reduced borrowings of $1.4M (4QFY09: $4.2M).
Mr Lim Kim Thor, CEO of Hupsteel, commented, “As the global economy struggled to pull
itself out of the recession, local demand for steel products did not register any improvement
during the reporting quarter. This was the main reason for the low revenue generated”.
“Although volume is expected to remain soft in the coming months, selling prices are not
expected to fall further. As such the Group expects margins to be fairly constant in the next
few months. While the revenue is lower than last quarter, our gross margin has actually
improved compared with 4QFY09 and net cash flow from operating activities in the last
quarter of $21.9M is 53% greater than the same quarter a year ago (1QFY09: $14.3M).
Today the Group is almost debt free. It has worked hard to deal with the economic downturn
during the last year and we are now well placed for the recovery. Nevertheless, the Group
will continue to manage its operating costs and inventory balances closely amidst the
challenging market conditions. With the global economy already showing signs of recovery,
the Group’s strong cash balances will enable it to seize opportunities as they arise during the
eventual upturn” concluded Mr Lim
today announced that the Group achieved revenue of $36.9M (4QFY09:
Should be highly possible if you recall Hupsteel was very strong at .70 just last year.
chewwl88 ( Date: 08-Oct-2009 14:47) Posted:
Giving "Outperform"
chewwl88 ( Date: 08-Oct-2009 14:44) Posted:
| Yes. the target price set by Philips Security is $0.40
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Giving "Outperform"
chewwl88 ( Date: 08-Oct-2009 14:44) Posted:
Yes. the target price set by Philips Security is $0.40
chtan5751 ( Date: 29-Sep-2009 23:15) Posted:
12,825 lots done on 240909 and price $0.35 was a higher this yr... may be will cheong....to $.40
any comment thks. |
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Yes. the target price set by Philips Security is $0.40
chtan5751 ( Date: 29-Sep-2009 23:15) Posted:
12,825 lots done on 240909 and price $0.35 was a higher this yr... may be will cheong....to $.40
any comment thks. |
|
12,825 lots done on 240909 and price $0.35 was a higher this yr... may be will cheong....to $.40
any comment thks.
Continued strong demand from the marine and oil & gas sectors helped 2 of Asia's biggest steel suppliers grow faster in the quarter ended Mar 31. HupSteel - which provides steel products and services to the oil & gas, petrochemical and construction industries - reported record revenue of $120.1 million for its third quarter, a 56% jump from a year earlier. Net profit for the quarter soared 84% to $10.8 million. Revenue for the 9 months ended Mar 31 surged 48% yoy to $291.8 million. This exceeded the $284.2 million revenue for FY07.
Finally, some life. Steel stockist should make a pile in these times. 60% increase in steel px this year. LOL!
Agreed. it is time to buy..
I think ..we all must have a target price to buy in our hearts.. and during the correction (like now), we should buy and hold it...
When market down, most of the people panic and throw their stocks at loss.. and when it rebound, and go higher and higher, they will say, shit.. should buy it earlier and buy when it is high, then, the market down, they gam chong and sell..
the lesson learnt... when you eyes on one potential good counters, with a target price to enter, just do it.. who will knows august 17 crash actually create an opportunity to "steal" easy 40-50% gain in just 1-2 months... who can tell you now, in the next two months before chinese new year, the stocks will not rebound?
be rational. stock is a cycle, what goes down must go up... and now it is down, so, what's next?
Time to buy in.
Possible $0.49 level in 2 week, $0.59 level in 4 weeks.
IMO of course.
DBS Vickers - HupSteel Ltd; Buy S$0.38; Price Target : 12-Month S$ 0.51 (Prev S$ 0.73)
Following the release of HupSteel?s 1Q08 results last week, we caught up with the management at a luncheon briefing last Friday for further updates. The management remains positive on the group?s business outlook. Driven by the buoyant marine, oil and gas, and construction sectors, revenue for 1Q08 was up 30% y-o-y on the back of sustained demand for steel. However, gross profit margin shrank 2.6ppt y-o-y to 22.8% due to a higher proportion of sales in the lower margin structural steel products. Bottomline declined 5.5% y-o-y to S$7.4m in 1Q08. However if we exclude the one-off special dividend received from an early redemption of a bond of S$0.7m after-tax in 1Q07, y-o-y net profit growth would be 4.4%. We have lowered our FY08 earnings estimate by 12.8% to account for higher expected operating costs and greater proportion of sales in lower margin structural steel products. We have therefore lowered our fair value to S$0.51, which is based on 10x FY08 earnings, and after accounting for the 1-for-4 rights issue. Maintain BUY.
Phillip Securities - Underpinned by robust demand
HS reported revenue growth of 29.7% for its 1Q08 results, up by S$16.4m to S$71.7m. Gross profit grew 17.1% while net profit attributable to equity holders reduced marginally by 5% as compared to previous corresponding period. Underpinned by the strong demand from the various industries in which its clients are involved in, business outlook for HS looks even rosier for the next few years.
Strong demand from the Oil & Gas, Marine and Construction sectors. HS announced strong revenue growth of 29.7% to S$71.7m as a result of robust demand for steel from the Marine, Oil & Gas and Construction sectors. The buoyant market conditions enabled it to achieve growth in the revenue and gross profit.
During the briefing, the Management shared that the stellar performance was achieved as a result of the broad based growth across the Group?s main product categories. Demand will remain strong for the next few years due to the continuing growth enjoyed by its clients from the Oil & Gas, Marine and Construction sectors.
GP up but NP marginally falls in absence of one time gain. Gross profit for its 1Q08 stands at S$16.4m, representing a growth of 16.8% as compared to previous period while net profit attributable to shareholders dipped marginally by 5%, amounting to at S$7.4m. However, 1Q07 included a one-time special dividend income of S$0.9m received from the early redemption of bond. If we were to exclude that from the comparison, net profit growth would be 6.9%.
Margins dipped on all levels. GPM, OPM and NPM for its 1Q08 were 22.86% (- 2.53 ppts), 13.07% (-5.05 ppts) and 10.26% (-2.33 ppts) respectively. This has been the case due to the sales mix, which comprised a higher proportion of structural steel products. These products are mainly used in the construction industry and are of lower margins as compared to other steel products used in other industries.
Given the current boom in the construction sector, we expect this uptrend to continue contributing to HS?s top-line while margins to dip when compared to each previous quarter.
Expenses on overall escalated and outpaced revenue growth. As business prospers, higher provision was made for the increase in salaries and headcounts and better incentives. Extension of warehouse leads to increase in depreciation by $0.38m while other operating expenses also jumped 54%. Other operating expenses would include selling and admin expenses, transportation, freight charges, utilities, marketing expenses, which the increase was a result of increased business volume, operations and intensified marketing effort.
Share Placement and Rights issue. During the 1Q08 (ie July07), HS completed the share placement exercise, which involved the issuance of 49.5m new shares to 3 institution funds. A total of S$26.9m (net of expenses) was raised from the exercise. This resulted in the increase in cash and cash equivalent balances.
In the month of September, HS also announced a gross bonus dividend of S$0.03049 (net S$0.025) per share cum a 4 for 1 Rights issue at a subscription price of S$0.10 per rights share. Shareholders have the option to use the bonus dividend to pay for the rights. Based on full subscription assumption, a total of 125.5m shares will be issued.
Actively in search for more space. Fueled by the buoyant local construction sector and strong demand from customers, the Management has stepped up its effort to look for additional storage space. Current total warehousing space is about 35,000 sqm.
Valuation & Recommendation. Outlook for the steel sector remains bright while steel prices are likely to gallop northward due to the likelihood of rising iron ore prices, high freight rates and oil prices. HS?s ability to continuously deliver strong results in the next few quarters looks firm, as local demand for steel products has been showing strong momentum growth.
The recent jittery market, as a result of the sub-prime fear offers opportunities for accumulation on the stock. The current share price of S$0.38 represents a 1.18x FY07 book value per share (BVPS), which is undemanding and in our view, does not truly reflects its potential given the current outlook.
Based on the blended BVPS for FY07 and FY08, we arrive at a fair value estimate of S$0.54. The fair value estimate also implies a mere 7.5x PER based on projected FY08 earnings. We maintained our BUY recommendation.
Ex Right.
UOB selling below 5% may cause this to under pressure.
Big drop today. Anyone know why? UOB open sales last few days. Is this the right time to buy again now? Or to exit completely?
Hi,
When will Hupsteel be releasing their results?
Hope tomorrow will open higher, and continue to climb up!
Cheong Ahh!
Uptrend Lai Liao!
