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Today want to introduce a stock which is overlooked, due to the market attention that is all focus on gloves, vaccine, gold primarily. Malaysia is a diverse market, not only good in gloves, vaccines and gold. There are other important commodities that Malaysia export to such as Palm Oil, Timber/Lumber.
The retail perception of these timber / lumber commodity is that during the MCO lockdown, demand of such goods will fall. Surprisingly, the demand for LUMBER had sky rocketed into all time high (highest in the history) as the lock down force US/EUROPE citizen at home, they are looking into renovating their own house, and doing up repairs that are needed.
This had put up a surprising demand from the lumber operator, where most lumber operator thought demand will not be good, hence reducing output.
The situation now is high demand and low supply, pushing LUMBER FUTURES to all time high in history
So, what can this mean for lumberjack operator in Malaysia?
In Malaysia, those involved prominent ones that are involved in lumber chopping are FLBHD, WTK, SUBUR, JTIASA.
WHY I CHOOSE WTK ?
Of all, the company with most liquidity is WTK - 4243. That is the reason WTK will perform better than the rest due to availability of liquidity for investor.
At the current market, investor/trader/IB will prefer to trade on company with liquidity. Although FLBHD is going to benefit, but the liquidity of shares will shy away big investor.
WHY WTK CAN BENEFIT IN A DOUBLE KILL MANNER?
There are a few operation under WTK, namely LUMBER, PALM OIL, MANUFACTURING OF TAPES.
Of all, revenue is 70% from LUMBER, 15 to 20% from PALM OIL, and the rest at manufacturing.
The drastic increase in LUMBER LOG price will give WTK a JACKPOT WINDFALL towards it's existing stock pile inventory.
Another benefit that WTK is getting is improving FCPO prices. FCPO predict to hit above RM 3000
As you can see, during crisis time, different country will want to stock up their important supplies. India is going to continue purchasing palm oil, europe as well and China. All these will be pushing CPO towards 3000 and beyond.
WTK CHART STRONG BREAKOUT WITH POSITIVE VOLUME
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WTK recommended at 11th AUGUST 2020 at baseline price.
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