The Fear is in Asia now, sort of panic. HSI trading at book value of 1 to 2 times.

Looks like , US already prepared themselves for the worst. Die, die what to do !!

This post has been edited by SKY 1809: Oct 28 2008, 11:20 AM

Good day

No. Sino Hua-An is not going into PN17. We are financially sound company with cash in hand of more than RMB 120 million as at 31 Aug 08. Thr share price drop is very much in line with steel sector in Malaysia, China & worldwide (steel sector). The share price dropped of Sino Hua-An lately was main due to foreign shareholding selling (from a high of more than 20% in shareholding to about 10% shareholding) & also margin call for high networth individual. In fact, other company share price dropped recently were also because of margin call.

The current steel industry in China (and also international steel industry)
has slowed down since July 2008. Mittal group has recently accounced to cut
down steel production by 15%. 4 large steel in northern China have announced
to cut down steel production by 20% (approximately 100 million tons).
Malaysia steel manufacturers (listed co) are currently running capacity of
approximately 50% and according to steel analysts, some are runnning at 33%
only.

The demand of steel has dropped after Beijing Olympic and also because of
Bulan Puasa in Middle East countries coupled with hot summers months from
June to Sept 2008 have resulted huge drop in steel demand from China and
Arab countries. Of course the recent financial tsunami (Lehman Brothers
filing chapter 11 bankcrupcy, AIG in financial crisis, Merrill Lynn taken
over by Bank of America...) have caused tremendous shock to investors
worldwide and panicked their confidence level.

The equtiy market is facing meltdown situation whereby the worldwide stock
exchange have lost billion of USD within these couple of months. Eventhough
fundamentally sound companies' share price are also negatively affected.
Even Genting & Resorts dropped more than 35% YTD. Sime Darby, IOI dropped
more than 50%, Kinsteel , Masteel and Perwaja (IPO less than 2 months, from
RM 2.90 to RM0.90) dropped more than 60%.

Bursa share price also dropped 60% YTD. Our KLCI Jan 2 2008 was 1435
points, now about 850 points ie dropped more than 40%.

Baoshan Iron & Steel (largest steel manufacturer in China) and China Shenhua
(one of largest coal mines in China) share price also dropped more than 70%
from its peak on Jan 2008 & October 2007 respectively.

Sino Hua-An's coke business is very dependent on China steel industry as we
sell all of our products to China domestic market. According to local steel
industry players, the international steel industry would likely rebound
positivrly in the 1Q09 or 1H09, in tandem with other commodity prices. Steel
is a necessity in any developing countries like China, should there be any
rebound, we strongly believe, steel industry would be the first few
industries to improve significantly. Therefore, we are very much in line
with the performance of China steel players there. Eg during the good year
like 2006 & 2007, we also enjoyed good GP margin of 20%.

As a summary, overall global equity market are badly performed currently.
Most unit trust funds in HK and Japan, their YTD lost are more than 30%. SGX
is also badly hit, from high of 3600 pts, now at 1900 pts. Shanghai from
high of 6000 pts to current 2000 pts. During the good time, equity market
provides the best returns but when market sentiments are bad (like US
subprime credit crisis & drag to EU & Asia), the loss are also very huge.

Sino Hua-An's management will do the best to run the business effectively
and efficiently. Sino Hua-An has no external bank borrowing and is a net
cash company since Oct 2007.

Thank you for your concern & best regards.

Best regards,
Bernard Tan

The IR guy is saying what he's paid to say.
There's no substance or any solid plans identified, basically it's a warning for everyone to expect a pretty bad 3rd and 4th quarter report, and a I told you so.

If they announce a breakeven/loss with this market sentiment, we'll see huaan hitting 10 cent

Well, I would rather think he is making a fair and honest comment, a timely piece of information.

What do you expect in a current world crisis scenario ?

If Huaan drops to 10sen, i am prepared to buy more. It is cheaper than to buy warrants, anyway.

Judge your own.

This post has been edited by SKY 1809: Oct 29 2008, 08:31 AM

Since most of the people here target 10sen. My target will be 11 sen, maybe I can buy 100 lot and keep it for my kids

I oredi bought 100lots this afternoon at 0.19. planning to sell tomorrow :-p

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Added on October 29, 2008, 8:03 amI bet huaan will hit 0.24 today , i m going to offload my huaan today

This post has been edited by alivecmh: Oct 29 2008, 08:03 AM

Nice bet, your wish might be granted today...

I would rather think profits made elsewhere, could be parked here .

Cap appreciation could be 100% .

anyone knows if the steel plant acquisition were completed or not?

Did they complete that with loans too?


Also, strong resistance at 0.215, too many ppl eager to unload huaan.


This post has been edited by eltaria: Oct 29 2008, 10:02 AM

They have suspended the talks to buy the steel plant ( to a later stage ) , due to prevailing economy.

Check their websites, all research there.

crazy bursa.... totally no steam at all. huaan might even go red today if this goes on..

all the gains in the first hour are getting smaller and smaller.

Short Term Vs Long term , totally diff.

actually, i wanted to talk about this too. mind exchanging thoughts on huaan?

Short term, steel sector wont recover for at least 6 months.
Even if recover it's hard to say if it'll reach the level during olympic times.

Long term,
Would you buy huaan when there's other big fishes at discount prices too?

For example, I'm thinking both short term and also long term, it's better to buy genting at 3.5 for example or carlsberg at 3.x, guiness at 4 or Reits with 10% dividends now....

There's just so many other shares that's worth much more, in long term growth potential, dividends and short term growth too, that's why i decided to bite the bullet and exit now.

But then again, i didn't buy too much huaan. so it's not too big a bullet, and i can still makan it
Disclaimer : this is not an advice to sell...



Huaan see red already. 0.205.....

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Added on October 29, 2008, 10:31 amall gains in the first 2 hours lost, counters seeing red already now.
So fast lost momentum.

This post has been edited by eltaria: Oct 29 2008, 10:31 AM

Orang Green banyak (5-10%) kita green oso tapi (0.05-0.5%)

Yup, there are a lot other more stable business model or company stocks that are attractive as well.
Huaan stock is mainly attractive because of hardly beaten down, with no gearing and selling 50% of its NTA. But if company making losses and need to raise borrowing afterwards, then everything should be assessed all together, as fundamental no longer the same.
That's why need to monitor its financial result closely to determine its near future.

6 months?, I reckon at least 1-2 years and above before any real and obvious recovery can be seen.

I actually prepared for their profit to be halved, with cash generated to weather through the coming recession. The capacity expansion just come in at the wrong time but it won't burden them much. What I concern more is the impact of the environment issue (although they claim they are very environmental friendly, but the industry is well known to be notoriously pollutant. If what they claimed was true, we might see their competitors shutting down by environmental pressure, thus benefiting them). Can try to invest on this type of share, but not to be dominant in the portfolio. That's my 2 cents.

Let put a bet for a cup of Teh Tarik.

Giving 1-2 years time horizon, if market is good.

Huaan share could appreciate by 100% , THAT IS 42sen ( WITHIN 2 YEARS ).

You can name Cals or Guiness or REits that would beat Huann by THAT 100% margin ( from current prices ) , I accept the challenges.


This post has been edited by SKY 1809: Oct 29 2008, 03:31 PM

Capacity expansion will incur a lot of capital expenditure which drive down the cashflow while overhead expenses which might reduce the company profit signficantly.
Don't look down company overhead expenses especially for manufacturing company, it could be significant as well that's why company need to layoff staff, downsizing during bad time as it could save a lot of overhead expenses.

I've looked at the coke prices for the past few months, 30-50% decline, depending on the type of coke, this will probably be reflected in the 3rd and 4th quarter. Assuming their production rate is unchanged, it'll be a 30% drop in profit already. We've also seen reports that coking associations in china have called for a 50% production cut.

All taken in, profit can be reduced by 75% or more.

I think the capex already incurred and reflected in their 2Q financial statement, and personal cost will be limited to direct labor to the new plant (a lot of overlapping labor can be saved, if they planned it wisely). I still waiting for 3Q result to confirm whether to increase/ decrease/ maintain my holding. But judge from the research posted on their website, I guess 3Q result might be 10~20% lower than 2Q, thus maintain 'buy in weakness' policy for me. Wait for 3Q result, I long term investor. The one-day rally almost over, think market was not convincing with Dow's 10% hike.