Lee metals report a poor set of results.
I am not panicking yet.
The poor comparison of YOY results is due to Lee metals locking in Austville profits in 2Q in 2014.
Without this one-off item, the fall in profits would be less than 30%
Dividends was maintained.
After the bumper years of 2013 and 2014, I expect 2 cents dividends from Lee metals for the rough years ahead.
QoQ profits is relatively stable at 4 mio, or close to 1 cent EPS.
To maintain dividends, Lee metals need to pay 50-60% of earnings, assuming the 1 EPS can be maintained. I predict Lee metals would pay either 1.5 - 2 cents dividends in total for 2015.
Next, with the exception of Sin Ghee Huat, which is in the niche Nickel steel segment, Asia Enterprise, Hupsteel reported or going to report loss for the current quarter. BRC is still turning a profits but the fall is more drastic compare to Lee metals. It reinforced that Lee Metals is the alpha company in the Steel business. Nam Lee Pressed Metals Quarter report was not out yet.
However, this is no catalyst in the near time for this company.
Just have to feed on dividends.
I however, do know that the steel market is going to the dogs for years, mainly due to the fact that China is over producing and under consuming (Property sector in doldrums)
CCC for 1H 2015 is still high at 127 days. The same as 2014.
The high CCC however is a risk for impairment or rundown of inventory.