Mycron Steel Berhad (Mycron - 5087) is the first Cold Rolled Coil (CRC) manufacturer in Malaysia back then when it started it's operation in June 1990. To date, the factory is still operating in their 18 acre site at Shah Alam, Selangor. Currently, Mycron installed facilities includes:
- Continuous Pickling Line
- Hitachi - 6 High Cold Reduction Mill
- Electrolytic Cleaning Line
- Batch Annealing Furnaces
- Recoiling Plant
- Combined Skinpass Mill & Tension Leveling Line.
The latest market trend had display a strong steel industry play. The major come back for the steel industry in KLSE is due to
- Government intervention in imposing anti dumping duties towards several steel import products
- Stronger MYR that will translate to better operation profit
- Higher demand due to more public infrastructure project being dished out in 2016
While MITI had put the final line on PPCCSC by imposing anti dumping duties to exporting countries like China and Vietnam, MITI is currently still investigating on the CRC (Cold Roll Coils) and had given a provisional anti dumping duties from 4.58% to 23.78% from the alleged countries (China, Vietnam, South Korea) for 120 days starting from 25th January 2016.
The petition is filed by CSC Steel Sdn Bhd on behalf of all domestic player that are involved in producing Cold Roll Coils (CRC).
CSC Steel Holdings Berhad, which core production involved CRC had saw share price rocketing up in a strong manner since November 2015.
Sources that are familiar with this matter are looking to see MITI putting up a anti dumping duties towards imported CRC products for a possible period of 3 to 5 years, with duties as high as 30%.
The imposition of the anti dumping duty will certainly come in very good for CRC producer such as Mycron.
According to data, Mycron had been utilizing up to 78% of their max
production capacity of 260,000 tonne per year. However for the past few
years, Mycron had been suffering from low margins albeit the increasing
demand throughout the years.
On the technical outlook, Mycron is looking set to push above RM 0.40,
supported with the changes of policy into protecting the local CRC
producer by imposing anti dumping duties towards exporter from China,
Vietnam and South Korea.
A technical break out on the long term resistant at RM 0.40 will then see Mycron paving towards next resistant at RM 0.48.
As per the 2nd Quarter for FYE 2016, Mycron NTA stands at RM 1.10 per share, with 2 quarter cumulative EPS of 2.89 cents.
At the current price, Mycron is deem very attractive given that
- MITI had imposed provisional anti dumping duties towards the CRC
imports from China, Vietnam and South Korea while pending final decision
on 23rd May 2016.
- Sources are positive on imposition of anti dumping duties on CRC with CSCStel leading the pack.
- Mycron is trading at 37% of it's NTA value of RM 1.10.
- Stronger MYR against USD will see better operational profit
Mycron will be looking to trade towards a medium term target of RM 0.48, with a short term trigger at RM 0.44.
MYCRON (5087) - Mycron - Cold Roll Hot Call
http://bonescythe.blogspot.my/2016/03/mycron-cold-roll-hot-call.html
