Industry Comparison – Steel Products

Sector                 : Basic Material

Sub Sector         : Metals & Mining

This comparison would look into companies that manufacture and trading steel products. There twenty (20) companies in this industry:

1) AISB(2682) – AMALGAMATED INDUSTRIAL STEEL BERHAD

2) ANNJOO(6556) – ANN JOO RESOURCES BERHAD

3) ATTA(7099) – ATTA GLOBAL GROUP BERHAD

4) CHOOBEE(5797) – CHOO BEE METAL INDUSTRIES BHD

5) CSCSTEL(5094) – CSC STEEL HOLDINGS BERHAD

6) DYNACIA(5178) – DYNACIATE GROUP BERHAD

7) EMETALL(7217) – EONMETALL GROUP BERHAD

8) HIAPTEK(5072) – HIAP TECK VENTURE BERHAD

9) KINSTEL(5060) – KINSTEEL BHD

10) LEONFB (5232) – LEON FUAT BERHAD

11) LIONIND (4235) – LION INDUSTRIESCORPORATION BERHAD

12) MASTEEL (5098) – MALAYSIA STEEL WORKS(KL) BHD

13) MELEWAT (3778) – MELEWAR INDUSTRIALGROUP BERHAD

14) MYCRON (5087) – MYCRON STEEL BERHAD

15) PANTECH (5123) – PANTECH GROP HOLDINGSBERHAD

16) PRESTAR (9873) – PRESTAR RESOURCESBERHAD

17) SSTEEL (5665) – SOUTHERN STEEL BERHAD

18) WZSATU (7245) – WZ SATU BERHAD

19) YKGI (7020) – YKGI HOLDINGS BERHAD

20) YLI (7014) – YLI HILDINGS BERHAD

Competitiveness

Market shares is an importance indicator to determine the competitiveness of the company. Total revenue make from manufacturing and trading of steel products for the year 2018 is RM 17,757,458,945.

COMPANY	REVENUE (STEEL PRODUCT) 2018 (RM)	MARKET SHARE (%)
AISB (2682)	2,317,942	0.01
ANNJOO (6556)	2,321,422,000	13.07
ATTA (7099)	155,857,852	0.88
CHOOBEE (5797)	500,258,000	2.82
CSCSTEL (5094)	1,381,471,225	7.78
DYNACIA (5178)	62,367,153	0.35
EMETALL (7217)	125,860,073	0.71
HIAPTEK (5072)	1,127,777,000	6.35
KINSTEL (5060)	167,376,000	0.94
LEONFB (5232)	597,401,593	3.36
LIONIND (4235)	3,175,173,000	17.88
MASTEEL (5098)	1,496,853,000	8.43
MELEWAT (3778)	821,043,984	4.62
MYCRON (5087)	546,856,003	3.08
PANTECH (5123)	614,771,219	3.46
PRESTAR (9873)	577,410,000	3.25
SSTEEL (5665)	3,698,191,000	20.83
WZSATU (7245)	64,241,000	0.36
YKGI (7020)	222,209,901	1.25
YLI (7014)	99,601,000	0.56

Of the twenty companies, only three companies had more than 10% of the market shares which are SSTEEL (20.83 %), LIONIND (17.88 %) and ANNJOO (13.07 %).

Operational

For operational, operating income of the companies had been review. Operating income determine how much the companies’ revenue had turn into profit after reduction cost of operating expense.

Besides operating income, operating margin ratio is also calculated. Companies with higher operating margin ratio have more probability to survive in today financial crisis. The median operating margin ratio for this group of companies for 2018 is 3.78 %.

COMPANY	2018 OPERATING INCOME (RM)	2018 OPERATING MARGIN RATIO
AISB (2682)	- 393,439	-16.97
ANNJOO (6556)	138,966,000	5.99
ATTA (7099)	4,999,026	3.21
CHOOBEE (5797)	43,325,000	8.66
CSCSTEL (5094)	22,528,621	1.63
DYNACIA (5178)	- 4,822,932	-7.73
EMETALL (7217)	4,256,411	3.38
HIAPTEK (5072)	94,494,000	8.38
KINSTEL (5060)	- 503,421,000	-300.78
LEONFB (5232)	94,988,901	15.90
LIONIND (4235)	196,237,000	6.18
MASTEEL (5098)	20,746,000	1.39
MELEWAT (3778)	28,107,719	3.42
MYCRON (5087)	21,946,362	4.01
PANTECH (5123)	71,473,004	11.63
PRESTAR (9873)	20,471,000	3.55
SSTEEL (5665)	270,040,000	7.30
WZSATU (7245)	7,184,000	11.18
YKGI (7020)	7,252,644	3.28
YLI (7014)	-6,093,000	-6.12

This sector of industry is in recession in 2018 itself four out of twenty companies (20 %) operated in this sector had negative operating income. In additional to that, from 2014 – 2019 only seven companies out of twenty (35 %) have no negative operating income year. The companies are CHOOBEE, EMETALL, HIAKTEK, LEONFB, PANTECH, PRESTAR and WZSATU.

Three companies having operating margin ratio for more than 10 % in 2018 which are LEONFB (15.90%), PANTECH (11.63 %) and WZSATU (11.18 %).

Sustainability

For the sustainability of the business, debt of the companies is being review. There are two criteria to look at interest coverageratio, which is used to determine how easy the companies able to pay off the interest of outstanding debt and debt ratio. The median debt ratio for 2018 is 0.47.

COMPANY	2018 INTEREST COVERAGE RATIO	2018 DEBT RATIO
AISB (2682)	No Financial Cost	0.05
ANNJOO (6556)	3.25	0.51
ATTA (7099)	19.06	0.10
CHOOBEE (5797)	217.71	0.08
CSCSTEL (5094)	No Financial Cost	0.12
DYNACIA (5178)	-0.85	0.69
EMETALL (7217)	1.38	0.47
HIAPTEK (5072)	5.15	0.46
KINSTEL (5060)	-23.98	2.41
LEONFB (5232)	7.55	0.47
LIONIND (4235)	10.12	0.34
MASTEEL (5098)	1.32	0.52
MELEWAT (3778)	3.73	0.54
MYCRON (5087)	2.91	0.41
PANTECH (5123)	7.31	0.30
PRESTAR (9873)	2.24	0.47
SSTEEL (5665)	5.56	0.61
WZSATU (7245)	5.56	0.55
YKGI (7020)	1.84	0.86
YLI (7014)	-3.23	0.38

AISB, CHOOBEE and CSCSTEL are good companies for sustainability because they has either high or no interest coverage ratio and low debt ratio.

Summary

In summary a point is given to each company to evaluate each company competitiveness, operational and sustainability. Points given are as follows:

Competitiveness

Criteria	Point
Greater than 15 % Market Shares	5
10.01 % - 15.00 % Market shares	4
5.01 % - 10.00 % Market shares	3
2.51 % - 5.00 % Market shares	2
1.00 % - 2.50 % Market shares	1
Less than 1%	0

Operational

Criteria	Point
Greater than 10.00  Operating Margin	5
5.01 – 10.00 Operating Margin	4
3.01 – 5.00 Operating Margin	3
2.01 – 3.00 Operating Margin	2
1.01 – 2.00  Operating Margin	1
0.00 – 1.00 Operating Margin	0
Less than 0	Disqualified

Sustainability

Criteria	Point
No Financial Cost	2
Greater than 10 Interest Coverage Ratio	1
Less than 10 Interest Coverage Ratio	0

Criteria	Point
Less than 0.25	3
0.25 – 0.50	2
0.50 – 0.60	1
Greater than 0.60	0

COMPANY	Competitiveness	Operational	Sustainability	Total
AISB (2682)	0	DIS	5	DIS
ANNJOO (6556)	4	DIS	1	DIS
ATTA (7099)	0	DIS	4	DIS
CHOOBEE (5797)	2	4	4	10
CSCSTEL (5094)	3	DIS	5	DIS
DYNACIA (5178)	0	DIS	0	DIS
EMETALL (7217)	0	3	2	5
HIAPTEK (5072)	3	4	2	9
KINSTEL (5060)	0	DIS	0	DIS
LEONFB (5232)	0	5	2	7
LIONIND (4235)	2	DIS	3	DIS
MASTEEL (5098)	5	DIS	1	DIS
MELEWAT (3778)	2	DIS	1	DIS
MYCRON (5087)	2	DIS	2	DIS
PANTECH (5123)	2	5	2	9
PRESTAR (9873)	2	3	2	7
SSTEEL (5665)	5	DIS	0	DIS
WZSATU (7245)	0	5	1	6
YKGI (7020)	1	DIS	0	DIS
YLI (7014)	0	DIS	2	DIS

From the evaluation above, no companies manufacturing & trading steel product is worth for further evaluation.

Summary of Stock Reviews

http://ivkls.blogspot.com/2020/04/industry-comparison-steel-products.html