[%pbdw%] Thank you. Now I understand why the big swing in profit.

Its peer [%JZOR%] also have similar pattern of margin compression. The share price has also come down.

Any idea whether such upcycle/ downcycle pattern apply to the consumer goods distributor [%NUPz%] and [%nJEs%] ? Their net margins have more than double as compared to 5 years ago. But so far the margins remain high. I wonder if the margin could sustain. (I recall you've studied Harrison, and maybe DKSH too?)

@terence775 Thank you. Now I understand why the big swing in profit.

Its peer $KLSE-LUXCHEM also have similar pattern of margin compression. The share price has also come down.

Any idea whether such upcycle/ downcycle pattern apply to the consumer goods distributor $KLSE-DKSH and $KLSE-HARISON ? Their net margins have more than double as compared to 5 years ago. But so far the margins remain high. I wonder if the margin could sustain. (I recall you've studied Harrison, and maybe DKSH too?)

$LUXCHEM / 5143 (LUXCHEM CORPORATION BERHAD)

$DKSH / 5908 (DKSH HOLDINGS (MALAYSIA) BERHAD)

$HARISON / 5008 (HARRISONS HOLDINGS (MALAYSIA) BERHAD)

@pineforestof89 $KLSE-SAMCHEM is predominantly a chemicals distributor / trader; during the upcycle they can sell their inventory for higher prices and vice versa for downcycles (thus can see reporting losses there in the latest qr (which was not really operational losses but due to the write downs on inventory as chemical prices dropped))

that being said, management did guide that they're looking for ways to improve margins such as:
- new plant in pulau indah and Vietnam which will streamline operations and have some cost savings
-adopting a solutions based approach rather than being a pure distributor/trader
-offering more specialty chemicals

since this is a high turnover business, a slight change in margins could lead to large changes in profits; if the management can find ways to squeeze a few points of profit margin here and there.

Current prices seem quite reasonable, considering that they had:
-strong NOCF of +138 mil for the year (and about 50mil in the final Qr)
-FCF of +100mil for the full year
-had mostly digested their inventory (234mil->164mil->134mil) so they can replenish at cheap prices

That's my few cents on the company.