The company is positive on its outlook, post lockdown, given the strength of steel prices and the JV entity’s continuous investments in plant and equipment to achieve cost efficiencies. The JV entity’s first 200,000 tonnes of coke oven plant is expected to complete by the second half of 2021, in which substantial cost savings can be achieved. For more, go here.
Table: Hiaptek's last 8 quarterly results
Graph: Hiaptek's last 70 quarterly results
Hiaptek's financial position as at 30/4/2021 is deemed satisfactory with current ratio at 1.63 times and gearing ratio at 0.49 time.
Hiaptek (closed at RM0.565 yesterday) is now trading at a PE of 6.8 times (based on last 4 quarters' EPS of 8.29 sen). At this PE ratio, Hiaptek is deemed fairly attractive.
Hiaptek has broken above its long0term downtrend line at RM0.20 in September 2020.
Chart 1: Hiaptek's monthly chart as at Jun 29, 2021 (Source: Kenanga BTX)
Hiaptek then rallied to a high of RM0.70 in May 2021. Like other steel stocks, Hiaptek has corrected substantially in the past few weeks. However it is still in an uptrend line with support at RM0.52.
Chart 2: Hiaptek's weekly chart as at Jun 29, 2021 (Source: Kenanga BTX)
Based on improved financial performance & financial position, reasonable valuation and mildly bullish technical outlook, Hiaptek is a good stock for medium-term investment.
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