AISB (2682) - Amalgamated Industrial Steel Berhad - The Last Of The Mohican
Amalgamated Industrial Steel Berhad (AISB - 2682) is a very low profile steel maker that is based in Shah Alam. Due to the challenging business environment surrounding the steel industry from tight competition to high raw material, AISB had taken several restructuring in manufacturing processes as well as diversification into property development.
Despite being listed for more than 10 years in the KLSE, AISB is not so well known to the world of trader and investor. This is very much due to the inconsistent earning in the steel industry, as well as a tight liquidity of share that is circulating in the market.
However, with most of the steel company starting to make a turnaround from losses to profit, what will this meant for the Shah Alam based AISB ?
AISB to turnaround in 2016
Headed by executive director Mr Ronnie Lim Yew Boon, steps that are taken by AISB is to streamline the steel production from 2 plant into 1 plant. This will enable the group to see a better cost control and overall management of the steel production.
And most importantly, the exercise is to unlock a value of it's 11.5 acre land in Section 15, Shah Alam. The said piece of land is worth RM 61 million just on vacant land alone.
The land is looking to build 12 Semi-D factory and 2 custom made Bungalow Factory. With AISB being one of the arm of Malaysian conglomerate LGB group, their track record, experiences and connection could only boost the confidence in delivering this project. Just recently, Avant Industrial Park had obtain the green light to develop the piece of land.
The other services under the LGB Group is listed entity Taliworks Corporation Berhad. It provides water management, solid and water waste management, highway operation, property development, IT and construction engineering.
Can AISB a repeat of Taliwork ?
Given both of them are under the care of LGB group, what is the potential of AISB in the coming future?
Let's have a look at Taliwork as a reference case.
Given a track of power what LGB can do to Taliworks, AISB could be a good target now
With more than 3 year of inactivity in AISB, the share had finally saw some good participation of volume finally.
Familiar sources are expecting more happening in AISB. After a private placement last year that had completed in May 2015, AISB could be looking to see a potential bonus free warrant in 2017. AISB will also be looking to see better result from their steel operation. After all, most of the company in the steel industry had turned into profit already.
AISB underlying fundamental might not be so attractive at the moment, however, with new focus in unlocking the value of underlying asset could be looking to see more new venture coming in for AISB in the future.
Bone's TP : RM 0.70
AISB (2682) - Amalgamated Industrial Steel Berhad - The Last Of The Mohican
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