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HG change the inventory from FIFO to Weight avg it say reason to match the system of new acquire sub. But i think the main reason is to contain the actual inventory write down.
Definite more write-down on inventory is expected. Inventory is still at a high (Some concern) and stong US against SIN still persist.
What will be the impact on its share price?
Business Times - 25 Nov 2008
HG Metal swings to Q4 loss
By LYNETTE KHOO
HG Metal swung to a net loss of $33.27 million for the fourth quarter ended Sept 30 from a net profit of $4.81 million a year ago, due to a writedown of inventories arising from the sharp correction in steel prices in the past few months and foreign exchange losses.
But despite the quarterly loss, HG Metal still posted record earnings for the full year. Its net profit grew 25 per cent from fiscal 2007 to $22.56 million for the year ended Sept 30, thanks to the robust first nine months.
HG Metal said it will start consolidating the earnings of newly acquired BRC Asia from the first quarter ending Dec 31.
PRESS RELEASE - HG METAL FY2008 FULL YEAR FINANCIAL RESULTS
http://info.sgx.com/webcoranncatth.nsf/VwAttachments/Att_98BD8EAE69D209DC4825750C003E35D0/$file/PressReleaseHGMetalFY2008Fullyearfinancialresults.pdf?openelement
HG Metal swings to Q4 loss
By LYNETTE KHOO
HG Metal swung to a net loss of $33.27 million for the fourth quarter ended Sept 30 from a net profit of $4.81 million a year ago, due to a writedown of inventories arising from the sharp correction in steel prices in the past few months and foreign exchange losses.
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But despite the quarterly loss, HG Metal still posted record earnings for the full year. Its net profit grew 25 per cent from fiscal 2007 to $22.56 million for the year ended Sept 30, thanks to the robust first nine months.
HG Metal said it will start consolidating the earnings of newly acquired BRC Asia from the first quarter ending Dec 31.
PRESS RELEASE - HG METAL FY2008 FULL YEAR FINANCIAL RESULTS
http://info.sgx.com/webcoranncatth.nsf/VwAttachments/Att_98BD8EAE69D209DC4825750C003E35D0/$file/PressReleaseHGMetalFY2008Fullyearfinancialresults.pdf?openelement
The Board of Directors of HG Metal Manufacturing Limited (the “Company”) wishes to announce
that the Company has increased its equity investments in the following subsidiaries of the
Company:
1. HG Metal Pte Ltd, by subscribing for additional 15,297,783 ordinary shares of S$1 each
in the share capital of HG Metal Pte Ltd through HG Metal Investments Pte Ltd, a wholly-owned
subsidiary of the Company. The additional investment is funded by internal resources of the
Company. The effective interest held by the Company after the additional investment remains at
51%.
2. Oriental Metals Pte Ltd, by subscribing for additional 2,566,822 ordinary shares of S$1
each in the share capital of Oriental Metals Pte Ltd, thereby increasing the paid up capital of
Oriental Metals Pte Ltd from S$6,018,950 to S$8,585,772. The additional investment is funded by
capitalizing the amount owing to the Company by Oriental Metals Pte Ltd and the effective equity
interest held by the Company remains at 99.99%.
3. Niho (Singapore) Pte Ltd, by subscribing for additional 271,000 ordinary shares of S$1
each in the share capital of Niho (Singapore) Pte Ltd through HG Metal Investments Pte Ltd, a
wholly-owned subsidiary of the Company The additional investment is funded by capitalizing the
amount owing to the Company by Niho (Singapore) Pte Ltd. The effective equity interest held by
the Company after the additional investment remains at 72.29%.
By order of the Board
Foong Lee Heng
Company Secretary
21 November 2008
But this conter always stingy in giving off dividends one leh !
In its announcement yesterday, it said that it had written down its inventory to net realisable values and that it still expected to report record net profits & TO for fy'08 on 25/11/08.
I welcome comments on the following observations:
1. With the write down and the forthcoming expansionery budget which is likely to increase demand for HG's products. Therefore, Q1 '09 shall be positive.
2. Fy '07's net profit =$18.109m. Thus, fy '08's record net prifit will be > $18.109m.
Maybe i alittle too pessimistic, but to be careful in a market like these times. Overall HG Metal is still a good company, ,management got many many years of exp as a steel stockists.
Ok ! Thks. Yes, it went down all the way to S$0.12 and somehow stablise at S$0.125, now just rebounce back to S$0.13. I buy 20 lots at S$0.125 just now.
yes..wait 1st.. TP @ $0.11/share
Knightrider better wait first, i think might go below 10cent.
My logic is do a scenario on the inventory steel writedown at 10%, 20%, 30%., 40% and 50%. Also they just buy a company, might not giv fat fat div. US look like still going to strengthen against sin.
Steel mill around the world are doing plant temporay studown due to no orders. Wait for HG to reduce their stock level first.
wow ! Now drop further S$0.12 liao .
2day down liao, now can go in to buy liao ! $0.13.
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Business Times - 18 Nov 2008 HG Metal to report loss for Q408 By ANGELA TAN HG Metal Manufacturing Limited on Tuesday warned it will report a net loss for the fourth quarter of FY2008. This is due to the sharp correction in steel prices in the last few months which had necessitated a write down of inventory to net realisable values and foreign exchange losses due to the sharp appreciation of the US dollar against the Singapore dollar. However, the group is still expected to report record net profits and turnover for FY2008. It will be releasing its full year and 4th quarter financial results ended 30 September 2008 on 25 November 2008. |
Only thing that is worrying me behind this stock. Is the inventory of 200-300Mil Value (It is Brought at high?) Whether all is contracted to shipyard or construction at certain price if not negative Also the recent strength in USD means buying steel in USD and selling steel in SIN for some of it customers might eat into earnings Also shipyards look like will slow down abit, based on the charter rates drop means less repair for the coming months The rest you mention are HG strength, no logic to be in this price based on balance sheet and past earnings. If really attractive, likely alot of insider will start to buy big as they got the latest numbers to digest.
FY '08 report will be out soon. Based on 3Q report, EPS (basic) for 9 mths = 13.15 cents, NA per share =39.98 cents. If 4Q EPS = 3Q EPS = 6.72 cents, then FY '08 EPS will be 19.87cents (13.15 + 6.72), ie EPS (19.87 cents) > share price (14.5 cents last traded). What is the logic behind?
Yup Congrats Hee Hee
today move up S$0.155 to S$0.16 ! Can take profit now !
HG Metal today got some support from investors. woot woot
| Weighted Average Prices: | 0.1384 | Last Done Prices: | 0.145 |
| Spread/Price Ratio: | 1.0000 | AVG Trade Size: | 55,600 |
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Almost 2m share done today not bad for this counter. got some liquidity