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HupSteel
25-05-2012, 01:12 PM. (This post was last modified: 25-05-2012, 01:40 PM by cyclone.)
Post: #1
HupSteel
in short this company offers one stop steel biz.
nav 32c, trading at 18c, 44% discount off nav. dividend yield at 7%

it also is an investment holding company.

noticed increased volume and selling orders recently.

anyone knows why? or is it simply due to euro crisis

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25-05-2012, 01:29 PM. (This post was last modified: 25-05-2012, 01:40 PM by cyclone.)
Post: #2
RE: HupSteel
Steel is taking quite a bad hit to its prices.

It explains why HG Metal, another peer, falls back into a loss.

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31-08-2012, 11:36 AM.
Post: #3
RE: HupSteel
recent results showed eps 1.15c nav 32.96c trading at 56%nav dividend 1/2c declared.
looks like steel companies supplying to marine n oil industries just staying afloat.
hupsteel owns 1plot of freehold land 33000sf at kim chuan drive, a freehold 8 storey building at genting lane, 2freehold shophses in the city area and 5shoplets at hoe nam building.
this is a a relatively illequid and obsure stock to hold and wait for its value to be unlocked.
notably, ex dbs chairman koh boon hwee is among 20largest shareholders.

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31-08-2012, 12:05 PM.
Post: #4
RE: HupSteel
Thank for the information.

Not too sure if the properties are stated at cost or revalued amount....

Steel distributors will see margin pressure but maybe the price has factored in....I don't know...

Smile

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31-08-2012, 10:50 PM.
Post: #5
RE: HupSteel
the quantum of physical properties relative to its other assets is rel small if i were to recall..

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01-09-2012, 09:17 AM.
Post: #6
RE: HupSteel
a similar bare unit warehouse at 63kim chuan drive 6200sf is going for 6.3m. so i would estimate the freehold land is at least 800psf, making it worth around 26m. the genting lane 8storey building is more prime as it is closer to the city. it has a high plot ratio that it not maximised. the freehold land there is worth at least 20m. these 2plots cld be worth 45m. 2 jalan besar shphse say 3m each. plus shoplets in hoe nam. all in all these freehold assets cld be worth in excess of 50m.
with current market cap of 115m, i wouldn't say its small. it is nearly half of its market cap.

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01-09-2012, 09:36 AM. (This post was last modified: 01-09-2012, 09:37 AM by pianist.)
Post: #7
RE: HupSteel
why would u measure against mkt cap instead of total asset size? is it meaningful

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01-09-2012, 09:42 AM. (This post was last modified: 01-09-2012, 09:58 AM by paullow.)
Post: #8
RE: HupSteel
to me, this provides a certain margin of safety since it is physical fully paid up assets we are talking abt.
biz may change quarterly and go up or down but ppty asset prices do not change so fast and over time will likely go up.
so if fixed assets account for a significant part of a stks nav, there already a margin of safety.

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01-09-2012, 11:29 AM.
Post: #9
RE: HupSteel
(01-09-2012, 09:17 AM)paullow Wrote: a similar bare unit warehouse at 63kim chuan drive 6200sf is going for 6.3m. so i would estimate the freehold land is at least 800psf, making it worth around 26m. the genting lane 8storey building is more prime as it is closer to the city. it has a high plot ratio that it not maximised. the freehold land there is worth at least 20m. these 2plots cld be worth 45m. 2 jalan besar shphse say 3m each. plus shoplets in hoe nam. all in all these freehold assets cld be worth in excess of 50m.
with current market cap of 115m, i wouldn't say its small. it is nearly half of its market cap.

These properties from what i read from the AR, are classified under Property Plant and Equipments. Total Net Book Value of properties under PPE is around 25m. It is not the group policy to revalue these assets periodicially. The last revaluation was in 1992. Big Grin
Assuming the market value of these properties are say, 50m. There is an upside of 25m.
The company also has investment properties with market value of 30m. The investment properties is stated at 14m based on latest announcement.
So, close to 40m hidden value in this company.......
The group has 33cents nav or 200m net assets....
So, 20% upside....
In term of market cap, that's about 35%...

Interesting......

No vested for now

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01-09-2012, 11:11 PM.
Post: #10
RE: HupSteel
China’s Steelmakers make US$0.26 for each tonne of steel, says CISAinSharedigg31 August, 2012, 16:46. Posted by Zarathustra
By now, we all know very well that steel prices are falling, something that is almost now keenly followed as a barometer of how the Chinese economy is doing. On that note, yes, they are still falling.

What an unbearable heaviness of steel [prices].

Thus there is very little wonder that some steel makers and traders start to do something rather differently. Such as, raising pigs for slaughter.

We have no idea just how profitable it could possibly get to be a pig farmer. But some evidence suggests that perhaps that is not really the point. The key is that to be a steelmaker these days are simply very unprofitable. Recently, Wang Xiaoqi, Vice President of China iron and steel association (CISA) said the steelmakers’ profit of each tonne of steel has dropped to RMB1.68 for the first seven months of the year according, down from RMB118 per tonne according to Global Times. At current exchange rate, that is about 26 US cents per tonne of profit, which is almost zero.

We have no idea what the norm is for steelmakers in other countries, but we can understand why some steelmakers choose to sell pigs, because it probably looks less silly than selling one tonne of stuff and earn US$0.26. And of course, there is little wonder that they need some help from banks to roll over their debts, as many steelmakers have to be losing money at such almost non-existent profit margin…



Source: Bloomberg

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