CSC Steel Holdings Berhad (KLSE:CSCSTEL) - Share price, News & Analysis

Q: What is the Fair Price of CSCSTEL when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

CSCSTEL (MYR1.17) is trading below our estimate of [[fair value]] (MYR1.33)

CSCSTEL fundamental analysis
Snowflake Score
Valuation	2/6
Future Growth	0/6
Past Performance	4/6
Financial Health	4/6
Dividends	4/6

CSCSTEL Stock Overview

CSC Steel Holdings Berhad, an investment holding company, engages in the manufacturing and marketing of steel coils in Malaysia and the Asia Pacific.

Rewards

Trading at 12.4% below our estimate of its fair value

Earnings have grown 4.1% per year over the past 5 years

Risk Analysis

Earnings are forecast to decline by an average of 5.9% per year for the next 3 years

Dividend of 11.97% is not well covered by earnings

Does not have a meaningful market cap (MYR432M)

CSC Steel Holdings Berhad Competitors

Pantech Group Holdings Berhad

KLSE:PANTECH

RM500.8m

Hiap Teck Venture Berhad

KLSE:HIAPTEK

RM505.2m

Ann Joo Resources Berhad

KLSE:ANNJOO

RM552.7m

Choo Bee Metal Industries Berhad

KLSE:CHOOBEE

RM252.3m

Price History & Performance

Summary of all time highs, changes and price drops for CSC Steel Holdings Berhad
Historical stock prices
Current Share Price	RM1.17
52 Week High	RM1.79
52 Week Low	RM1.14
Beta	1.22
1 Month Change	-27.78%
3 Month Change	-28.66%
1 Year Change	-16.43%
3 Year Change	12.50%
5 Year Change	-35.00%
Change since IPO	-44.29%

Recent News & Updates

Jun 23

The Returns At CSC Steel Holdings Berhad (KLSE:CSCSTEL) Aren't Growing

If we want to find a potential multi-bagger, often there are underlying trends that can provide clues. Typically, we'll...

Shareholder Returns

	CSCSTEL	MY Metals and Mining	MY Market
7D	-20.9%	0.6%	-1.2%
1Y	-16.4%	-2.7%	-8.7%

Return vs Industry: CSCSTEL underperformed the MY Metals and Mining industry which returned -2.7% over the past year.

Return vs Market: CSCSTEL underperformed the MY Market which returned -8.7% over the past year.

Price Volatility

Is CSCSTEL's price volatile compared to industry and market?
CSCSTEL volatility
CSCSTEL Average Weekly Movement	6.0%
Metals and Mining Industry Average Movement	5.9%
Market Average Movement	5.5%
10% most volatile stocks in MY Market	11.5%
10% least volatile stocks in MY Market	2.9%

Stable Share Price: CSCSTEL is not significantly more volatile than the rest of MY stocks over the past 3 months, typically moving +/- 6% a week.

Volatility Over Time: CSCSTEL's weekly volatility (6%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
2004	676	Ping-Tung Chiu	https://www.cscmalaysia.com

CSC Steel Holdings Berhad, an investment holding company, engages in the manufacturing and marketing of steel coils in Malaysia and the Asia Pacific. It offers hot rolled pickled and oiled steel for underbodies, automotive wheels and inner parts, strapping, tubing, and racks; and cold rolled steel products for use in various industries, including automotive, home appliances, drum, pipe, tube, steel furniture, office equipment, etc., as well as base metal for coated steel products. The company also provides hot dipped galvanized steel under the Realzinc brand; pre-painted galvanized steel under the Realcolor brand for use in building materials comprising awning, roofing, cladding, wall panels, etc.; and medium and high carbon steel.

CSC Steel Holdings Berhad Fundamentals Summary

How do CSC Steel Holdings Berhad's earnings and revenue compare to its market cap?
CSCSTEL fundamental statistics
Market Cap	RM432.08m
Earnings (TTM)	RM76.31m
Revenue (TTM)	RM1.51b

5.7x

P/E Ratio

0.3x

P/S Ratio

Is CSCSTEL overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
CSCSTEL income statement (TTM)
Revenue	RM1.51b
Cost of Revenue	RM1.39b
Gross Profit	RM118.43m
Other Expenses	RM42.11m
Earnings	RM76.31m

Last Reported Earnings

Mar 31, 2022

Next Earnings Date

n/a

Earnings per share (EPS)	0.21
Gross Margin	7.83%
Net Profit Margin	5.04%
Debt/Equity Ratio	3.8%

How did CSCSTEL perform over the long term?

See historical performance and comparison

Dividends

12.0%

Current Dividend Yield

68%

Payout Ratio

We’ve recently updated our valuation analysis.

Valuation

Is CSCSTEL undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

2/6

Valuation Score 2/6

Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
PEG Ratio

Key Valuation Metric

Which metric is best to use when looking at relative valuation for CSCSTEL?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for CSCSTEL. This is calculated by dividing CSCSTEL's market cap by their current preferred multiple.
What is CSCSTEL's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	RM432.08m

CSCSTEL key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	0.1x
Enterprise Value/EBITDA	2.1x
PEG Ratio	-1x

Price to Earnings Ratio vs Peers

How does CSCSTEL's PE Ratio compare to its peers?

CSCSTEL PE Ratio vs Peers

The above table shows the PE ratio for CSCSTEL vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	3.7x
PANTECH Pantech Group Holdings Berhad	6.9x	1.8%	RM500.8m
HIAPTEK Hiap Teck Venture Berhad	2.2x	-9.5%	RM505.2m
ANNJOO Ann Joo Resources Berhad	2.7x	-15.5%	RM552.7m
CHOOBEE Choo Bee Metal Industries Berhad	2.7x	n/a	RM252.3m
CSCSTEL CSC Steel Holdings Berhad	5.7x	-5.9%	RM432.1m

Forward PE

Price-To-Earnings vs Peers: CSCSTEL is expensive based on its Price-To-Earnings Ratio (5.7x) compared to the peer average (3.7x).

Price to Earnings Ratio vs Industry

How does CSCSTEL's PE Ratio compare vs other companies in the MY Metals and Mining Industry?

Price-To-Earnings vs Industry: CSCSTEL is expensive based on its Price-To-Earnings Ratio (5.7x) compared to the MY Metals and Mining industry average (4.9x)

Price to Earnings Ratio vs Fair Ratio

What is CSCSTEL's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

CSCSTEL PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	5.7x
Fair PE Ratio	9.1x

Price-To-Earnings vs Fair Ratio: CSCSTEL is good value based on its Price-To-Earnings Ratio (5.7x) compared to the estimated Fair Price-To-Earnings Ratio (9.1x).

Share Price vs Fair Value

What is the Fair Price of CSCSTEL when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: CSCSTEL (MYR1.17) is trading below our estimate of fair value (MYR1.33)

Significantly Below Fair Value: CSCSTEL is trading below fair value, but not by a significant amount.

Price to Earnings Growth Ratio

PEG Ratio: CSCSTEL's earnings are forecast to decline next year, so we can't calculate its PEG ratio.

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Future Growth

How is CSC Steel Holdings Berhad forecast to perform in the next 1 to 3 years based on estimates from 1 analyst?

Future Growth Score

0/6

Future Growth Score 0/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

-5.9%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: CSCSTEL's earnings are forecast to decline over the next 3 years (-5.9% per year).

Earnings vs Market: CSCSTEL's earnings are forecast to decline over the next 3 years (-5.9% per year).

High Growth Earnings: CSCSTEL's earnings are forecast to decline over the next 3 years.

Revenue vs Market: CSCSTEL's revenue is expected to decline over the next 3 years (-4.1% per year).

High Growth Revenue: CSCSTEL's revenue is forecast to decline over the next 3 years (-4.1% per year).

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: CSCSTEL's Return on Equity is forecast to be low in 3 years time (6.9%).

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Past Performance

How has CSC Steel Holdings Berhad performed over the past 5 years?

Past Performance Score

4/6

Past Performance Score 4/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

4.1%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: CSCSTEL has high quality earnings.

Growing Profit Margin: CSCSTEL's current net profit margins (5%) are higher than last year (4.4%).

Past Earnings Growth Analysis

Earnings Trend: CSCSTEL's earnings have grown by 4.1% per year over the past 5 years.

Accelerating Growth: CSCSTEL's earnings growth over the past year (41.8%) exceeds its 5-year average (4.1% per year).

Earnings vs Industry: CSCSTEL earnings growth over the past year (41.8%) underperformed the Metals and Mining industry 126.2%.

Return on Equity

High ROE: CSCSTEL's Return on Equity (8.4%) is considered low.

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Financial Health

How is CSC Steel Holdings Berhad's financial position?

Financial Health Score

4/6

Financial Health Score 4/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: CSCSTEL's short term assets (MYR907.8M) exceed its short term liabilities (MYR153.2M).

Long Term Liabilities: CSCSTEL's short term assets (MYR907.8M) exceed its long term liabilities (MYR16.8M).

Debt to Equity History and Analysis

Debt Level: CSCSTEL has more cash than its total debt.

Reducing Debt: Insufficient data to determine if CSCSTEL's debt to equity ratio has reduced over the past 5 years.

Debt Coverage: CSCSTEL's operating cash flow is negative, therefore debt is not well covered.

Interest Coverage: CSCSTEL earns more interest than it pays, so coverage of interest payments is not a concern.

Balance Sheet

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Dividend

What is CSC Steel Holdings Berhad current dividend yield, its reliability and sustainability?

Dividend Score

5/6

Dividend Score 5/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Future Dividend Coverage

11.97%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: CSCSTEL's dividend (11.97%) is higher than the bottom 25% of dividend payers in the MY market (2.15%).

High Dividend: CSCSTEL's dividend (11.97%) is in the top 25% of dividend payers in the MY market (4.94%)

Stability and Growth of Payments

Stable Dividend: CSCSTEL's dividend payments have been volatile in the past 10 years.

Growing Dividend: CSCSTEL's dividend payments have increased over the past 10 years.

Earnings Payout to Shareholders

Earnings Coverage: With its reasonable payout ratio (67.7%), CSCSTEL's dividend payments are covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: CSCSTEL is paying a dividend but the company has no free cash flows.

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Management

How experienced are the management team and are they aligned to shareholders interests?

0.8yrs

Average management tenure

CEO

Ping-Tung Chiu (60 yo)

Tenure

Mr. Ping-Tung Chiu serves as Group Managing Director and Executive Director of CSC Steel Holdings Berhad since June 1, 2021. He has experience in the steel manufacturing industries. He joined China Steel C...

Leadership Team

Experienced Management: CSCSTEL's management team is not considered experienced ( 0.8 years average tenure), which suggests a new team.

Board Members

Experienced Board: CSCSTEL's board of directors are not considered experienced ( 2.6 years average tenure), which suggests a new board.

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.

Data	Last Updated (UTC time)
Company Analysis	2022/06/26 00:00
End of Day Share Price	2022/06/24 00:00
Earnings	2022/03/31
Annual Earnings	2021/12/31