CSCSTEL: Earnings Soared On Higher Selling Prices

Results Update

For QE31/12/2021, CSCStel's net profit rose 290% q-o-q or 81% y-o-y to RM39 million while revenue rose 164% q-o-q or 45% y-o-y to RM532 million. The higher revenue was mainly due to significant increase in steel price, while the sales volume has reduced by 16.5% compared to preceding year’s corresponding quarter. Despite the decrease in sales volume, the Group reported a higher profit before tax of RM51 million in the current quarter, an increase of 77% compared with a profit before tax of RM29 million a year ago.


Table: CSCStel's last 8 quarterly results


Graph: CSCStel's P&L for last 57 quarterly results

Financial Position

As at 31/12/2021, CSCStel's financial position is deemed very healthy with current ratio at 6.2 times and gearing ratio at 0.18 time. It has net cash of RM162 million which is equivalent to RM0.44 per share.

Valuation

CSCStel (RM1.37 yesterday) has a PER of 5.9 times (based the last 4 quarters' EPS of 23.3 sen). If the cash balance of RM0.44 per share is deducted from the share price, CSCStel's PER would be reduced further to only 4 times. At this PER multiple, CSCStel is deemed very attractive. In addition, CSCStel has proposed a dividend of 14 sen for the current year- an increase of 100% over last year's dividend. At this dividend payout, CSCSTEL's dividend yield stands at 10.2%.

Technical Outlook

CSCStel has been trading in a wavy pattern. The share price appears poised to begin its next wave upwards.


Chart: CSCStel's monthly chart as at Feb 21, 2022(Source: isaham.my)

Conclusion

Based improved financial performance, healthy financial position and attractive valuation, CSCStel is a good stock for long-term investment.

Note:
I hereby confirm that I do not have any direct interest in the security or securities mentioned in this post. However, I could have an indirect interest in the security or securities mentioned as some of my clients may have an interest in the acquisition or disposal of the aforementioned security or securities. As investor, you should fully research any security before making an investment decision.

CSCStel: Earnings Rebounded

Results Update

For QE30/6/2019, CSCStel's net profit rose 174% q-o-q or 21% y-o-y to RM12.6 million while revenue rose 4% q-o-q or less-than 1% y-o-y to RM344 million.


Table 1: CSCStel's last 8 quarterly results

The Group’s revenue increased q-o-q mainly driven by the increase in sales volume of GI and PPGI products which more than offset the decline in sales volume for CRC. On a year-to-year basis, sales volume of GI and PPGI products dropped but was fully offset by increase in sales volume for CRC.

Table 1: CSCStel's sales revenue & volume from various segments

As a result, the Group’s profit before tax increased substantially, registering RM16.1 million in the current quarter compared with RM5.8 million in the preceding quarter. The significant improvement in profit of 176% mainly attributed to higher margin for certain steel products and the lower production cost as a result of lower raw material prices amid an intensely competitive steel market.


Graph: CSCStel's P&L for last 47 quarterly results

Financial Position

As at 30/6/2019, CSCStel's financial position is deemed very healthy with current ratio at 8.4 times and gearing ratio at 0.12 time. It has net cash of RM184 million which is equivalent to RM0.48 per share.

Valuation

CSCStel (RM1.01 yesterday) has a PER of 21 times (based the last 4 quarters' EPS of 4.9  sen). If the cash balance of RM0.48 per share is deducted from the share price, CSCStel's PER will be reduced to 11 times. At this PER multiple, CSCStel is deemed fair. Due to the loss incurred, CSCstel reduced its dividend of 10 sen to 4 sen. As a result, its dividend yield plunged to 4%.

Technical Outlook

CSCStel is now resting on its long-term uptrend line, SS at RM1.00. The MACD seems poised to cross above the signal line. When that happens, the share price should be on an uptrend.


Chart: CSCStel's monthly chart as at Aug 26, 2019 (Source: MalaysiaStock.Biz)

Conclusion

Based improved financial performance & healthy financial position, fair valuation and mildly bullish technical outlook, CSCStel is a good stock for long-term investment.

Note:
I hereby confirm that I do not have any direct interest in the security or securities mentioned in this post. However, I could have an indirect interest in the security or securities mentioned as some of my clients may have an interest in the acquisition or disposal of the aforementioned security or securities. As investor, you should fully research any security before making an investment decision.

CSCSTEL: An Attractive Steel Stock

CSCStel share price has dropped 43% from an intraday of RM2.08 in January 2017 to its current price of RM1.19. Is this steel stock worth buying?

Results Update

For QE30/6/2018, CSCStel's net profit dropped 2% q-o-q or 28% y-o-y to RM10 million while revenue was mixed - down 1.5% q-o-q or up 6.9% y-o-y to RM343 million. The Group’s revenue dropped slightly q-o-q mainly due to overall decrease in sale volume despite marginal increase in prices of all steel products. In spite of the lower sale volume, the Group’s profit before tax of RM13.5 million this quarter is marginally lower than that achieved in the previous quarter due to marginal increase in overall production cost. [Note: CSCTEL's result for QE30/6/2018 was announced on August 17.]


Table: CSCStel's last 8 quarterly results


Graph: CSCStel's P&L for last 43 quarterly results

Financial Position

As at 30/6/2018, CSCStel's financial position is deemed very healthy with current ratio at 8.8 times and gearing ratio at 0.11 time. It has net cash of RM194 million which is equivalent to RM0.53 per share.

Interestingly, CSCStel announced in May this year that its wholly-owned subsidiary, Group Steel Corporation (M) Sdn Bhd ('GSCM') has proposed to undertake a capital reduction and repayment to cancel RM139 million of its share capital and to distribute the credit amount back to CSCStel (here). The shareholders will be very interested to know what CSCStel will do with this cash balance once it has received it from GSCM. Will it be reinvested in a new project that will generate additional earning or will it be distributed partially to its shareholders?

Current Year Prospect

The company expects “the steel market to face micro price fluctuation till the year end due to trade measure issues and price factor in iron ore and coking coal. On the domestic steel market, (the company is) facing threat from the influx of low priced steel imports. The Ministry of International Trade and Industry has been made aware of the situation and is now taking appropriate actions including initiating anti-dumping investigation on imports of galvanised steel from China and Vietnam to minimize the harm to the local manufacturers.”

The company is not very inspiring when it states that it's “cautiously optimistic to achieve profitability for the rest of the year.”

Valuation

CSCStel (closed at RM1.19 yesterday) has a PER of 8.8 times (based the last 4 quarters' EPS of 13.5  sen). If the cash balance of RM0.53 per share is deducted from the share price, CSCStel's PER will be reduced to 4.9 times. At this PER multiple, CSCStel is deemed very attractive. In addition, CSCstel has an attractive dividend yield of 8.4% based on current price of RM1.19.

Technical Outlook

CSCStel peaked at RM2.08 in January 2017, and declined steadily in a downward channel.


Chart 1: CSCStel's daily chart as at Sep 6, 2018 (Source: MalaysiaStock.Biz)

If you look at the monthly chart, CSCtel price decline may bring the share price to its long-term uptrend line support at RM0.90-1.00.


Chart 2: CSCStel's monthly chart as at Sep 6, 2018 (Source: MalaysiaStock.Biz)

Conclusion

Based on satisfactory financial performance, strong financial position and attractive valuation, CSCStel is a good stock for long-term investment.

Note:
I hereby confirm that I do not have any direct interest in the security or securities mentioned in this post. However, I could have an indirect interest in the security or securities mentioned as some of my clients may have an interest in the acquisition or disposal of the aforementioned security or securities. As investor, you should fully research any security before making an investment decision.

CSCSTEL: Earnings Recovered

Results Update

For QE31/12/2017, CSCStel's net profit rose 5.6% q-o-q or 139% y-o-y to RM15 million on the back of higher revenue -which rose 13% q-o-q or 288% y-o-y to RM267 million. Group’s revenue rose q-o-q due to substantial increase in total sale volume and higher selling prices for all its steel products. As a result, the Group's profit before tax rose to RM19 million this quarter compared with RM16 million achieved in the previous quarter. (Note that effective tax rate on consolidated profit before tax for the current period was lower than the statutory income tax rate of 24% due mainly to tax effect of income not taxable in determining taxable profit; and tax effect of utilizing re-investment allowance.)


Table: CSCStel's last 8 quarterly results


Graph: CSCStel's P&L for last 41 quarterly results

Valuation

CSCStel (closed at RM1.51 yesterday) has a PER of 9.3 times (based the last 4 quarters' EPS of 16.19  sen). At this PER multiple, CSCStel is deemed fairly attractive.

Technical Outlook

CSCStel has broken below its intermediate uptrend line, SS at RM1.70 in late November last year. Shortly thereafter, it also broke to the downside of its descending triangle, ABC at RM1.63. This means CSCStel may continue to slide.


Chart 1: CSCStel's daily chart as at Feb 13, 2017 (Source: MalaysiaStock.Biz)

If you look at the monthly chart, CSCtel has been rising in an upward channel since 2006. It is now slightly below the middle line. If the share price weakens further, it is likely to go to the lower line. Thus it is important that CSCtel must recover above the middle line at RM1.55.


Chart 2: CSCStel's weekly chart as at Feb 13, 2017 (Source: MalaysiaStock.Biz)

Conclusion

Based on satisfactory financial performance and fairly attractive valuation, CSCStel is a good stock for long-term investment. However we have to track this stock closely as its technical outlook has turned negative.

Note:
I hereby confirm that I do not have any direct interest in the security or securities mentioned in this post. However, I could have an indirect interest in the security or securities mentioned as some of my clients may have an interest in the acquisition or disposal of the aforementioned security or securities. As investor, you should fully research any security before making an investment decision.

CSCStel: Profit Plunged Due To Weaker MYR & Higher Input Costs

Results Update

CSCStel's net profit dropped by 74% q-o-q or 78% y-o-y to RM6.2 million on the back of higher revenue -which rose 11% q-o-q or 18% y-o-y to RM287 million. The increase in revenue is due to significant increase in the sales volume albeit at marginally lower selling prices of all steel products. Profit before tax dropped from RM24.8 million to RM7.9 million due mainly to substantially higher cost of production due to higher raw materials cost exacerbated by rapidly weakening Ringgit vis-à-vis US Dollar during the quarter under review.


Table: CSCStel's last 8 quarterly results


Graph: CSCStel's P&L for last 37 quarterly results

Valuation

CSCStel (closed at RM2.11 yesterday) has a PER of 11.3 times (based the last 4 quarters' EPS of 18.63 sen). At this PER multiple, CSCStel is deemed fully valued.

Technical Outlook

CSCStel is now testing the line connecting its recent trough at RM2.00. This support is fairly strong support. If the support is violated, the next support is at RM1.90.


Chart 1: CSCStel's daily chart as at Feb 13, 2017 (Source: MalaysiaStock.Biz)


Chart 2: CSCStel's weekly chart as at Feb 13, 2017 (Source: MalaysiaStock.Biz)

Conclusion

Despite on the weaker financial performance and full valuation, I am revising my rating for CSCStel from a TAKE PROFIT to a HOLD as I expect the technical support at RM1.90-2.00 to hold up the stock.

Note:
I hereby confirm that I do not have any direct interest in the security or securities mentioned in this post. However, I could have an indirect interest in the security or securities mentioned as some of my clients may have an interest in the acquisition or disposal of the aforementioned security or securities. As investor, you should fully research any security before making an investment decision.

CSCStel: Earnings May Have Peaked

Results Update

CSCStel's net profit dropped by 17% q-o-q to RM24.2 million on the back of a 4.5%-decline in revenue to RM258 million. When compared to the corresponding quarter last year, net profit rose 137% despite a 16%-drop in revenue.. Revenue dropped q-o-q due to significant decrease in the sales volume. Profit before tax dropped q-o-q due mainly to significant drop in sale of our higher priced higher margin products and substantial increase in raw material cost.


Table: CSCStel's last 8 quarterly results


Graph: CSCStel's P&L for last 36 quarterly results

Valuation

CSCStel (closed at RM1.99 yesterday) has a PER of 8.2 times (based the last 4 quarters' EPS of 24.42 sen). At this PER multiple, CSCStel is deemed fairly valued.

Technical Outlook

CSCStel rallied from a low of RM0.90 in September last year to a high of RM2.20 in October.We can see that the share price is within a large "upward channel" with resistance from the upper line, RR at RM2.10-2.20.


Chart 1: CSCStel's monthly chart as at Nov 16, 2016 (Source: ShareInvestor.cm)

From the weekly chart, we can see the MACD has hooked down though it has not crossed below the MACD signal line. +DMI is still above -DMI, indicating uptrend. ADX has hooked down, signaling a weakening of the uptrend momentum. While the indicators have yet to give a negative reading, the signs are there that the stock could have made a temporary top. Taken together with the monthly chart study above, I am inclined to believe that the risk is on the downside for now.


Chart 2: CSCStel's monthly chart as at Nov 16, 2016 (Source: ShareInvestor.cm)

Conclusion

Based on the weaker financial performance and recent sharp rally, I am revising my rating for CSCStel from a HOLD to a TAKE PROFIT.

Note:
I hereby confirm that I do not have any direct interest in the security or securities mentioned in this post. However, I could have an indirect interest in the security or securities mentioned as some of my clients may have an interest in the acquisition or disposal of the aforementioned security or securities. As investor, you should fully research any security before making an investment decision.

CSCSTEL: Earnings Plunged

Results Update

CSCStel's net profit dropped by 70% q-o-q to RM8.9 million on the back of a 8.9%-decline in revenue to RM221 million. When compared to the corresponding quarter last year, net profit rose 65% despite a 25%-drop in revenue.. Revenue dropped q-o-q due to substantial decreases in both the sales volume and selling prices of our steel products. Despite the substantial decreases in selling prices of our steel products, production cost has registered a marginal increase. This led to lower operating profit, which coupled with the absence of  the write back of RM16.9 million of doubtful debt in the preceding quarter, led to a sharp drop on profits.


Table: CSCStel's last 8 quarterly results


Chart 1: CSCStel's P&L for last 34 quarterly results

Valuation

CSCStel (closed at RM1.40 as at 12.30pm) has a PER of 9.0 times (based the last 4 quarters' EPS of 15.49 sen). Its dividend yield  is quite decent at 5.7%.

Technical Outlook

CSCStel rallied from a low of RM0.90 in September last year to a high of RM1.45 in the past 3 months. This morning, the share price retreated dropped to its 50-day EMA line support at RM1.38. Below that, it may find support at the horizontal line at RM1.35 & then RM1.25.


Chart 2: CSCStel's monthly chart as at Feb 22, 2016 (Source: ShareInvestor.cm)

Conclusion

Despite the weaker financial performance, CSCStel is rated a HOLD based on reasonable valuation.

Note: 
 
In addition to the disclaimer in the preamble to my blog, I hereby confirm that I do not have any relevant interest in, or any interest in the acquisition or disposal of, CSCSTEL.

CSCSTEL: Earnings rebounded

Results Update

CSCStel's net profit increased by 179% q-o-q to RM28.5 million. Revenue increased by 9% q-o-q to RM243 million due to significant increase in sales volume of some of its steel products and marginal increase in selling prices of some of its steel products. In line with the higher revenue and the write-back of the doubtful debt provision of RM16.9 million, profits soared. If the write-back is excluded, the profits would still have been significantly higher: 67%  for PBT and 20% for net profit.


Table: CSCStel's last 8 quarterly results


Chart 1: CSCStel's P&L for last 33 quarterly results

Valuation

CSCStel (closed at RM1.28 yesterday) has a PE multiple of 8.8 times (based the last 4 quarters' EPS of 14.5 sen). This plus its DY of 6.2% make CSCTEL a fairly attractive stock.

Technical Outlook

CSCStel broke above its intermediate downtrend line at RM1.10 in early January. Its immediate resistance is the horizontal line at RM1.30. Beyond that, it may encounter resistance at RM1.50-1.60.


Chart: CSCStel's monthly chart as at Feb 22, 2016 (Source: ShareInvestor.cm)

Conclusion

Based on the improved financial performance, fairly attractive valuation & positive technical outlook, CSCStel could be a good stock for long-term investment. 

Note: 
 
In addition to the disclaimer in the preamble to my blog, I hereby confirm that I do not have any relevant interest in, or any interest in the acquisition or disposal of, CSCSTEL.