MINHO TO SEE BIG UPSWING WITH HIGHER GLOBAL TIMBER PRICES

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This covid-19 pandemic had unleashed a massive amount of money into the global financial system, resulting in creeping up inflation. We can see that stock market are heading higher with higher PE ratio, crypto currency are gaining track in the market as the digital gold, and commodities are going higher as well.

The latest QE is the known USD1.9 trillion which President Biden had signed into effect. How is the market going to reflect on this money?

Today I am going to talk about Commodities.

CPO chart are showing massive uptrend on the palm oil. The trend is not stopping and will be looking to hit RM 5000 in the next 3 months to come. Some analyst are projecting RM 6000 to RM 7000.

Here are some metal prices. 

ALUMINIUM GLOBAL PRICES

COPPER GLOBAL PRICES

PLATINUM GLOBAL PRICES

Now, I want to talk about TIMBER prices

TIMBER GLOBAL PRICES

Global timber price will look set to trade around USD 1000 per bdsf. This could be a new norm going forward due to the excessive money printing exercise.

As you can see, when commodities prices go up, a lot of raw material prices will go up, and in the end it will end up in inflation because good and product will go up eventually.

In Malaysia, the steel sector already go up. Leading steel maker - Annjoo, despite report a operating losses, share price went up more than 300%

WHAT IS THE NEXT COMMODITY SECTOR TO SEE UPLEG ?

I believe the next one will be TIMBER SECTOR. Timber companies involved in upstream logging and downstream manufacturing will see massive upleg.

One of the laggard is Minho (M) Bhd - MINHO 5576

The company is involved in timber upstream logging, and downstream manufacturing from plywood to sawn timber. Export market 80% and local usage 20%.

Current share price NTA RM 1.10 per share. MINHO chart shown a breakout from short term down trend. With more than 6 months in consolidation and global timber prices breaking upwards, MINHO is just another company waiting to see a big upwards swing in it's share price.

IMPORTANT NOTICE

Please be informed, I am not a professional or certified analyst. I am not a licensed consultant, just a normal retail investor. I am just sharing on my ideas and  opinion of the market outlook. Above materials are taken from original source as a referencing material. This is not a buy/sell/trade call. Please do your own research and buy at your own risk.

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Global lumber prices soaring to benefit Minho in export

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What is the possible next trend for the global market? 2020 had saw glove theme, vaccine theme, plantation theme, logistic theme and the end year steel theme play. Coming into 2021, we should be looking no further at timber theme play, at least in the 1Q 2021.

Global plywood prices had been staying up, putting up pressure for prices to increase in construction as plywood are one of the main component in construction.

Prices for 1000 bdsf of plywood are now trading above usd 600, and in my opinion, prices will continue to remain inflated above usd 500 due to several factor as highlighted below :-

1. Coronavirus pandemic had affected the supply of log wood due to the lockdown. The timber processing supply chain from upstream logging work until downstream processing are affected by worker supply issue.

2. Developed country practicing work from home are encouraging more home renovation work to be done, and also more new home sales, hence pushing up demand for plywood in construction.

3. The forest supply for raw timber log at British Columbia are affected by infestation of mountain pine beetles. Warmer weather continue to encourage their growth and infestation.

4. Forest fire burned down 15 billion board feet of timber. 

Source - After the fires, timber industry faces ‘generational’ losses and longer-term supply questions of supply (msn.com)

With all the issue that are happening, supply chain are getting damaged while demand keep pushing up higher. This will only result in higher selling prices for timber goods.

WHY MINHO IS A POTENTIAL COMPANY TO GAIN FROM THIS ?

MINHO is in the business of timber for more than 40 years. Throughout the years, the business had expanded into several categories which include

-Kiln drying and chemical preservative treatment
-Manufacturing, exporting and dealing in moulded timber and related products.
-Export of processed timber products
-Trading in logs supply and timber related products
-Exploitation of timber concessions
-Operation of a fully integrated timber complex
-Manufacturing and distribution of industrial paper bags
-Property development
-Plantation

Minho export the sawn timber goods to Germany.

Currently, Minho charting is attractive as consolidation of the chart looks good at 35 cents

The price movement suggest a maturity point where a potential break out point will trigger the share price to move with a positive upward bias based on the global event happening in the timber trading.

For Mid/long term investor, current price around RM 0.35 +/- could be a good entry as price consolidated nicely around this range.

Above information is for reading and references on the write own personal opinion on the global timber trade and how it will affect company (Minho) that is dealing with timber trading. It does not represent a buy sell or trade to your investment decision.

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INVEST DOMINAN NOW, FUTURE CAN GENERATE 10% ROI FROM DIVIDEND. CASH COW GOOD BUSINESS SOLID DIVIDEND PAYMENT RECORD. NO TIME TO MISS

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With MALAYSIA OPR rate shrinking down, FIXED DEPOSIT RATE had been dropping and interest income are affected greatly. 2 years back, the FD PROMOTION RATE can be as high as 4.5% PER ANNUM. At the current market scenario in 2020, the FD PROMOTION RATE can only go as high as 2% PER ANNUM, and the OPR RATE will be expected to stay low for sometime until economy recover and pick up again.

How long the market will takes to recover? How long will it pick up again? Will it stay low for a few years? 2 years? 3 years? 5 years?

If that is your concern, maybe is time to take some time and look for some dividend income that had better yield, steady and also had good management.

The one company I am looking into is DOMINAN 7169 (DOMINANT ENTERPRISE BERHAD).

This company main business is to supply raw material to furniture company for their manufacturing. Furniture plywood and skirtings. Dominan also supplies so construction material as their expansion business.

Dominant will also be looking to create a stream of steady rental income this year after their warehouse factory is ready and already have ready tenant to rent their commercial property.

Most importantly, investor have to know that this company is not a goreng goreng stock, the company owner always prioritize shareholder value, and dividend payment every quarterly.

DOMINAN had been paying dividend without fail since 2005.

Why the current price is very attractive for you to invest into DOMINAN.

1. The company had good and strong record of paying dividend. Here are the past 4 years total dividend that the company had paid out to shareholder.

YEAR 2017 - TOTAL DIVIDEND PAID IS 5 CENTS

YEAR 2018 TOTAL DIVIDEND IS 7 CENTS

YEAR 2019 TOTAL DIVIDEND IS 7 CENTS

YEAR 2020 TOTAL DIVIDEND IS 4 CENTS 

WHY FYE 2020 TOTAL DIVIDEND PAID IS LESSER ?

REASON IS SIMPLE, NOW THE WHOLE WORLD GOT COVID-19 SITUATION, AND DOMINAN SUFFER FROM A 3 MONTH LOCKDOWN ON OPERATION. THE IMPACTED THE REVENUE, HENCE THE LOWER DIVIDEND PAY OUT

HOWEVER, THE CURRENT FURNITURE LANDSCAPE AT MUAR, JOHOR IS OPERATING AT MAX CAPACITY. ORDER ARE PILLING UP AND FURNITURE MAKER ARE ALL BUSY FULFILLING ORDERS.

COMPANY LIKE POHUAT WHICH HAVE OPERATION IN MUAR AND VIETNAM ARE BOOMING WITH ORDERS.

DOMINAN ALSO HAVE OPERATION AT MUAR JOHOR AND VIETNAM.

BOTH ARE FURNITURE HUB IN SOUTHEAST ASIA!!!

SO WILL DOMINAN BUSINESS CONTINUE TO BE LOW ? OR THE BUSINESS WILL REBOUND?

IF BUSINESS REBOUND, WILL THE DIVIDEND GO BACK UP?

LETS SAY U ARE INVESTING AT 70 CENTS NOW, GIVE ANOTHER 1 YEAR, DOMINAN BUSINESS REGAIN TRACK AND CONTINUE PAY BACK 7 CENTS DIVIDEND A YEAR, MEANS YOU ARE GETTING 10% ROI ON DOMINAN DIVIDEND

RULES OF 72, BASED ON 10% ROI OF DIVIDEND, YOU WILL RECOUP ALL YOUR INVESTMENT FROM DOMINAN IN 7 YEARS!!!!

NOW THIS IS UR CHOICE TO SEE IF DOMINAN AT THE CURRENT PRICE WORTH FOR YOU TO TAKE THE RISK

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BE SMART AND DOMINAN !!!! INVEST DOMINAN ON UNDERVALUED POSITION

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Looking for the next trend play in Bursa Malaysia? No need to look further, neither left or right, east or west. The trend that is in play and will continue for a while will be the furniture theme play. But not all furniture player are going to benefit from this Work From Home, only a certain player stand out to benefit more.

Hence, I would like to point out to the FURNITURE HUB of MALAYSIA, that is in MUAR, JOHOR. This is the place where all the popular and branded furniture maker gather together, where raw material, skill worker are centered in a location.

According to data, the furniture export from MUAR, JOHOR represent 50% of the whole Malaysia. That is a very commendable figure to say.

The current COVID-19 situation had created a new market - WORK FROM HOME. This new opportunity is currently having a big void to be filled up for most of the exporting furniture player in MUAR.

The EDGE - Local Furniture players get a boost from WORK FROM HOME POLICY from the US.

https://www.theedgemarkets.com/article/local-furniture-players-get-boost-wfh-policy-us

According to the report, furniture maker in MUAR stand to benefit from US 2 trillion (RM 8.3 trillion) stimulus cash hand out.

So, how are furniture player in MUAR performing in terms of share price? .

POHUAT - REBOUNDED HIGHER FROM THE SELL DOWN DURING LOCKDOWN

WEGMANS - REBOUNDED HIGHER FROM LOCKDOWN SELL OFF

LIIHEN - REBOUNDED HIGHER FROM LOCKDOWN SELL OFF

SWSCAP - REBOUNDED WITH GOOD UPTREND

WHEN MOST OF THE FURNITURE MAKER IN MUAR ARE HAVING THRIVING BUSINESS, HOW ABOUT THE SUPPLIER FOR FURNITURE MAKER ????

I WANT TO INTRODUCE TO YOU - DOMINAN 7169

LESS KNOWN TO MOST, BUT THIS WOOD PANEL / PLYWOOD SUPPLIER TO FURNITURE MAKER IN MUAR AND VIETNAM IS UNDERLOOKED

HOWEVER, THE POTENTIAL TO REBOUND BACK TO IT'S NORM SHOULD NOT BE FAR AWAY AS DOMINAN IS A GOOD FUNDAMENTAL COMPANY, PAY DIVIDEND FEW TIME EVERY YEAR, NTA RM 1.80 AND WELL MANAGED WITH GOOD OWNERS.

DOMINAN STAND TO BENEFIT FROM

1. STRONG ORDER FROM FURNITURE MAKER AT MUAR

2. BETTER PRICING IN WOOD MATERIAL

3. LOWER INTEREST RATE WILL BENEFIT THE OUTSTANDING LOAN TAKEN BY DOMINAN

CURRENT PRICE CHART WILL SEE DOMINAN IS READY TO BREAK OUT FROM THE LOW PRICE RANGE, CONSOLIDATION ALREADY MAX OUT AND READY TO GO UP

DOMINAN

https://www.dominant.com.my/

DOMINAN PROMOTED IN TELEGRAM DURING 68 cents to 70 cents. CURRENT 72 cents. Looking at DOMINAN to reach RM 1.00

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BTM RESOURCES BHD CONFIRMED UPTREND.. SHAREHOLDER ALSO INDICATE CONFIRMED UPTREND

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BTM RESOURCES BERHAD, A NORTHERN REGION TIMBER PLAYER DIVERSIFYING INTO RENEWABLE ENERGY COULD BE ATTRACTIVE TARGET FOR INVESTOR EYEING TO INVEST INTO THE CONCESSION AT THE CURRENT PRICE.

BTM RESOURCES BACKGROUND

BTM Resources Berhad ("BTM") was incorporated in Malaysia on 10th June 1994 as a public limited company under the Companies Act, 1965. BTM is listed on 27th March 1996 on the Main Market of the Bursa Malaysia.

The principal activity of BTM is that of investment holding and provision of management services while its subsidiary companies are involved in logging, sawmilling, trading of sawn timber, logs and plywood, kiln-drying operations, timber moulding, manufacturing of finger jointed timber and lamination boards, and letting of plant and machineries.

RECENT DEVELOPMENT

BTM TO SELL ENERGY TO TNB FOR 21 YEARS, COMMENCING NO LATER THAN JANUARY 2023. THE CAPACITY IS 10MW, WITH A FIXED RATE OF 34.86 cent PER kWH FOR 21 YEARS.

https://www.nst.com.my/business/2020/07/605491/btm-sell-power-tnb-21-years

While things are still fresh, there are a lot of background work which is already going on.

Firstly is private placement of 10% which is approved.

Secondly, there is a new entry of shareholder which is very bullish on BTM to be CONFIRMED UPTREND

DATUK WOO THIN CHOY 4.45% acquisition via CONFIRMED UPTREND SDN BHD. This company name already giving hint :D

Now that the KLSE MOST PROLIFIC COMPANY, TOPGLOVE, already announce outstanding QR, i believe the shift of trend will be coming towards PLANTATION AND TIMBER INDUSTRY next week

The chart is showing good consolidation effort around 20 cents. Trend like is looking good with uptrend effort able to see BTM trading 25 cents for next spike.

Market talks are looking at BTM probably eyeing for fresh concession from TERENGGANU STATE GOVERNMENT for fresh timber concession. If BTM is able to secure more land for INDUSTRIAL TIMBER PLANTATION, then BTM will be very attractive moving forward.

The INDUSTRIAL TIMBER PLANTATION CONCESSION will be used to feed in fuel for the 10MW BIOMASS ENERGY PLANT.

MARKET OBSERVER ARE POSITIVE BTM WILL BE ABLE TO GET 3000 TO 6000 ACRE OF LAND FOR INDUSTRIAL TIMBER PLANTATION, FROM A MIXED OF PRIVATE JOINT VENTURE AND STATE GOVERNMENT LEASE LAND.

With just a market capitalization of RM 27 million, there are much space for BTM to explore upwards

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TSH BENEFIT FROM HIGH FPCO AND TIMBER PRICE, BACK WITH EPF PURCHASE FOR A GOOD UPWARD SWING

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Today glove industry stage a nice rebound, with multiple limit up coming back to the market. Market sentiment will continue to be strong with ample of volume.

I do not need to introduce gloves industry counter anymore, because it is known to everyone. Today want to highlight a potential company - TSH RESOURCES BHD (9059)

This company main business is palm oil plantation, including milling and refinery services. Other business is cocoa, biomass energy and timber (wood) business.

Primary revenue contribution is from operation of Palm Oil Plantation, and then follow with Timber sector (wood).

3 MAIN POINT THAT PUT TSH AS AN ATTRACTIVE COMPANY

1.) FCPO PRICES HAD BEEN CONSOLIDATING AT 2800 FOR MORE THAN 1 MONTH. LOOKING TO PUSH ABOVE 3000 WITH MORE BUYING FROM INDIA, EUROPE AND CHINA TO RESTOCK

FCPO projection can go above 3000 with supported buying from INDIA, EUROPE and CHINA as government restock on this commodity

https://www.reuters.com/article/malaysia-palmoil/update-1-industry-body-expects-q3-rise-in-malaysian-palm-oil-exports-to-biggest-buyers-idUSL4N2DO1YR

2.) LUMBER FUTURE ALL TIME HIGH, BENEFIT TSH TIMBER CONCESSION

TSH got 100 years concession for sustainable timber plantation. A few years ago, TSH privatized Ekowood, a company that manufacture timber flooring products. The product are supply to local and international market.

High timber price will give TSH a better margin.

https://www.ekowood.com/en/inspirations/malaysia-projects/

3.) EPF AGGRESSIVE BUYING OF TSH FROM OPEN MARKET

The past 30 days, EPF had accumulated approximately 2% of TSH shares. This I believe is due to the positive outlook from higher palm oil and better margin from timber division.

TSH technical chart is giving good entry point. Current trend look set to see TSH is heading for uptrend, with positive news from industry. The current price is at technical low side, and can point towards potential upward swing.

Can target for a mid term RM 1.20

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