CSC Steel Holdings Berhad (15 April 2025)
CSC Steel Holdings Berhad, a leading Malaysian steel manufacturer listed on the Main Board of Bursa Malaysia, operates a robust business model focused on producing and marketing high-quality steel products as of 2025. The company specializes in a range of offerings, including pickled and oiled steel (PO), cold-rolled steel (CR), hot-dipped galvanized steel (GI), and pre-painted galvanized steel (PPGI). Its primary customers include service centers, roll formers (the largest customer segment), pipe manufacturers, and drum manufacturers, reflecting a diverse industrial clientele. The company predominantly serves the Malaysian market (above 90%).
(1) Historical performance
Stock Price Uptrends and Positive Company Performance
2006-2007 Uptrend
Company Performance:
In 2006, CSC reported a profit after tax of RM71.966 million on revenue of RM1.025 billion, with strong earnings per share. In 2007, revenue surged by 27% to RM1.302 billion, and profit before tax increased by 14.4% to RM93.1 million. The commissioning of a new cold rolling mill expanded production capacity and enabled the production of specialized cold-rolled coil (CRC) products.Relation to Stock Movement:
The stock price uptrend during 2006-2007 reflects the company’s robust financial performance, including significant revenue and profit growth, as well as strategic capacity expansion, which likely boosted investor confidence.
2008-2010 Uptrend
Company Performance:
In 2008, despite the global financial crisis, CSC achieved a profit before tax of RM51.97 million and a 5% revenue increase to RM1.373 billion, outperforming peers who reported losses. In 2009, profit before tax soared by 125% to RM117 million, the highest since the company’s establishment, driven by effective cost control and market recovery. In 2010, revenue grew by 19% to RM1.03 billion, though profit dropped by 24% due to rising raw material costs and competition.Relation to Stock Movement:
The stock price uptrend was supported by CSC’s resilience during the 2008 crisis, exceptional profitability in 2009, and revenue growth in 2010. The company’s ability to perform well relative to peers during a challenging economic period likely sustained investor optimism.
2016 Uptrend
Company Performance:
Revenue increased by 2% to RM1.035 billion, and profit before tax rose by 18% to RM82.123 million, driven by favorable steel market conditions. The commissioning of a new temper mill improved product quality, and trade measures enhanced sales margins.Relation to Stock Movement:
The stock price uptrend in 2016 aligned with improved financial performance, operational enhancements, and positive market conditions, all of which likely bolstered investor sentiment.
Stock Price Downtrends and Negative Company Performance
2011-2015 Downtrend
Company Performance:
2011: Profit before tax fell by 59% due to softening global steel demand, rising feedstock costs, and the European debt crisis.
2012: Profit before tax decreased by 3%, impacted by a weakening export market and competition.
2013: Profitability was pressured by oversupply and currency depreciation from Q2 onward.
2014: A loss before tax of RM27.02 million was recorded due to global supply-demand imbalances and a weak domestic market.
2015: Profit before tax recovered to RM69.45 million, but market uncertainty persisted due to excess supply from China.
Relation to Stock Movement:
The prolonged stock price downtrend reflected consistent declines in profitability, weak global and domestic steel demand, and external economic challenges, which eroded investor confidence over this period.
2017-2020 Downtrend
Company Performance:
2017: Revenue grew to RM1.323 billion, but profit before tax dropped to RM76.078 million due to rising costs and higher distribution expenses.
2018: Profit before tax plummeted by 65% to RM26.306 million amid weak market sentiment and increased competition from imports.
2019: Profit before tax improved to RM43.4 million, though revenue slightly declined.
2020: The COVID-19 pandemic caused a 20.8% revenue drop, with profit before tax at RM46.6 million.
Relation to Stock Movement:
The stock price downtrend was driven by declining profits in most years, intensified competition, and the significant disruption from the pandemic in 2020, all of which likely dampened investor enthusiasm.
Flat Stock Price Periods and Mixed Company Performance
2021-2022 Flat with Ups and Downs
Company Performance:
2021: Revenue rose to RM1.474 billion, and profit before tax surged to RM114.28 million, fueled by higher global steel prices.
2022: Revenue increased further to RM1.699 billion, but profit before tax fell sharply to RM17.89 million due to declining steel demand in the second half of the year.
Relation to Stock Movement:
The flat stock price with fluctuations reflects the mixed performance: a strong 2021 driven by high steel prices was offset by a significant profit drop in 2022, creating uncertainty among investors and preventing a clear trend.
2023-2024 Flat with Temporary Uptick
Company Performance:
2023: Profit before tax rose to RM64.44 million, supported by strong domestic steel demand, particularly in construction.
2024: Profitability was pressured by lower selling prices and increased competition from imports following the expiration of anti-dumping duties.
Relation to Stock Movement:
The stock price remained flat overall, with a temporary uptick likely tied to the improved profitability in 2023. However, subsequent challenges in 2024, such as declining prices and import competition, brought the price back down, maintaining the flat trend.
Summary of the Relationship
Uptrends (2006-2007, 2008-2010, 2016):
These periods coincided with strong financial performance, including revenue growth, profit increases, and operational improvements like capacity expansions or product quality enhancements. Positive market conditions also played a role in boosting stock prices.Downtrends (2011-2015, 2017-2020):
These were associated with declining profits, weak steel demand, increased competition, and external shocks like economic crises or the COVID-19 pandemic, all of which negatively impacted investor sentiment.Flat Periods with Fluctuations (2021-2022, 2023-2024):
These reflected mixed results, where strong performance in one year was followed by weaker results in the next, leading to investor uncertainty and a lack of sustained momentum in the stock price.
Additional Insights
While CSC’s financial and operational performance strongly influenced its stock price movements, external factors also played a significant role. For instance:
During the 2008-2010 uptrend, CSC’s ability to remain profitable amid the global financial crisis likely made it a standout investment compared to struggling peers.
The 2020 downtrend was exacerbated by the unprecedented impact of the COVID-19 pandemic, beyond the company’s control.
In conclusion, there is a clear correlation between CSC Steel Holdings Berhad’s stock price movements and its company performance. Positive financial and operational outcomes drove uptrends, while challenges led to downtrends or flat periods. However, broader market conditions and economic events also shaped investor expectations and stock price behavior, highlighting the interplay between internal performance and external influences.
Business/product analysis:
Are CSC’s Products Commodity-Type?
CSC sells processed steel products, including:
Pickled and Oiled Steel (PO)
Cold Rolled Steel (CR)
Hot-Dipped Galvanised Steel (GI)
Pre-Painted Galvanised Steel (PPGI)
These products are not raw steel but are standardized goods produced by many manufacturers. While the processing (e.g., galvanizing or painting) adds value, the products remain largely interchangeable with similar offerings from other suppliers. In industries like construction or manufacturing, customers typically prioritize price over brand for such goods, a key trait of commodities. Thus, CSC’s products can be considered commodity-type, even if they are slightly more specialized than raw materials.
Is the Market Highly Competitive?
The market for CSC’s products is indeed highly competitive:
Local Competitors: CSC faces competition from companies in Malaysia like Mycron Steel, Southern Steel, Melewar Industrial Group, Yeeh Phui Malaysia, and NS BlueScope Malaysia.
International Pressure: Imports from countries such as China, South Korea, and Japan add further competition. The management stressed the significance of import competition in their AGM minutes.
Price-Driven Competition: With standardized products, differentiation is limited, forcing companies to compete primarily on price. This intense rivalry confirms the market’s highly competitive nature.
Does CSC Have a Low Business Moat?
A business moat reflects a company’s ability to maintain a competitive edge. CSC’s moat appears relatively low:
Limited Differentiation: The standardized nature of its products makes it hard for CSC to stand out.
Some Advantages: CSC benefits from its parent company, China Steel Corporation (Taiwan), which provides raw materials and technology. It also markets branded products (e.g., "Realzinc," "Realcolor") and holds quality certifications (e.g., ISO standards). However, these advantages are not unique enough to create a strong barrier against competitors, many of whom likely have similar capabilities or lower costs.
Industry Challenges: The steel industry’s cyclical nature—driven by economic conditions and raw material price swings—further weakens CSC’s ability to sustain a wide moat.
Are Profit Margins Low?
CSC’s financial performance supports the idea of low profit margins:
Historical Data: Profit margins have typically been in the single digits. From 2019 to 2023, the company net income margin only averaged 3% (2022:1% (lowest), 2021: 6% (highest)).
Industry Norms: The steel sector is capital-intensive and sensitive to cost pressures (e.g., energy, raw materials), often resulting in slim margins, especially in competitive, commoditized segments.
Here are other factors which impacted the company historical performance
Factors and Risks That Reduced Sales and Earnings
Global Economic Downturns
Major economic events, such as the 2008 financial crisis and the 2020 COVID-19 pandemic, severely affected steel demand. In 2008, the credit crisis caused a 44% drop in profit before tax, while in 2020, the pandemic led to a 20.8% revenue decline due to reduced demand and operational restrictions.
Increased Competition
The liberalization of trade agreements (e.g., ASEAN Trade in Goods Agreement) and an influx of cheap imports, particularly from China, intensified competition. This pressured CSC's pricing power and market share, reducing sales and margins. The lifting of anti-dumping duties in 2024 further worsened this by allowing lower-priced imports to flood the market.
Raw Material Price Volatility
Sharp rises in raw material costs, such as hot-rolled steel coils, squeezed profit margins when CSC couldn’t fully pass these costs to customers. For example, in 2010 and 2011, higher feedstock costs contributed to a 24% drop in net profit in 2010 and a 59% decline in profit before tax in 2011.
Currency Fluctuations
While a weaker Ringgit sometimes helped, a stronger MYR posed risks. In 2017, the strengthening Ringgit made imported steel cheaper, increasing competition and pressuring domestic sales. Currency volatility also raised the cost of imported raw materials in some years, hurting profitability.
Operational Disruptions
Events like the Movement Control Order (MCO) in 2020 and the Full Movement Control Order (FMCO) in 2021 forced temporary shutdowns, halting production and sales. In 2021, a nearly three-month shutdown constrained performance despite an otherwise strong year.
Policy Changes
Government policy shifts, such as the lifting of anti-dumping duties in 2024, negatively impacted earnings. This allowed cheaper imports from China and Vietnam to enter the Malaysian market, leading to a 17.6% drop in net profit in Q3 2024 compared to the previous year. Uncertainties in steel-related trade policies also posed ongoing risks.
(2) Current trend and how to benefit from
In January 2025, Malaysia introduced provisional anti-dumping duties on flat-rolled iron or non-alloy steel imports from China, India, Japan, and South Korea. These duties range from 2.52% to 36.80% and are in place for up to 120 days, pending a final decision by May 10, 2025. The targeted products include types of steel like cold-rolled steel and galvanized steel, which align with CSC’s product lineup—such as cold-rolled steel (CR) and hot-dipped galvanized steel (GI).
However, CSC’s history with anti-dumping duties shows challenges. In March 2024, Malaysia lifted anti-dumping duties on flat-rolled plated steel from China and Vietnam. This led to a surge in imports, hitting CSC hard:
Third quarter 2024: Net profit dropped by 17.6% year-on-year.
Nine months of 2024: Net profit fell by 49.5%, with the company blaming the import influx after the duty revocation.
This suggests that while duties can protect CSC, their absence exposes it to fierce competition.
Based on Malaysia’s consistent application of anti-dumping duties, the likely confirmation of provisional measures by May 2025, regional protectionist trends, and the absence of evidence suggesting a policy reversal, the odds are high that Malaysia’s anti-dumping duties on steel will continue from June 2025 onwards. An increase in tariffs is also possible, though less certain, reinforcing the overall high probability when both outcomes are considered.
Demand Trends
From 2025 onwards, the demand for Pickled and Oiled Steel (PO), Cold Rolled Steel (CR), Hot-Dipped Galvanised Steel (GI), and Pre-Painted Galvanised Steel (PPGI) in Asia, ASEAN, and Malaysia is expected to rise, fueled by growth in AI infrastructure, renewable energy, electric vehicles (EV), and robotics. These sectors will likely increase construction and manufacturing needs, boosting steel consumption.
PO Steel: Likely to see moderate demand growth, mainly for general construction and industrial uses.
CR Steel: Expected to experience high demand, especially from the EV sector for automotive components and robotics for precision parts.
GI Steel: Anticipated to see significant demand from renewable energy projects, like wind turbines and solar frames, due to its corrosion resistance.
PPGI Steel: Projected to benefit from EV manufacturing for aesthetic body panels and construction for visually appealing, durable applications.
Malaysia outlook
Infrastructure-Driven Demand
Malaysia's demand for steel products will be substantially driven by major infrastructure developments. Projects such as Penang's Mutiara Line Light Rail Transit (LRT), the Kuching Autonomous Rapid Transit (ART), and the Mass Rapid Transit 3 (MRT3) will create significant steel demand in the coming years. These projects require various steel products, with galvanized and coated products particularly important for exposed structural elements.
Electronics manufacturing growth (for example, semiconductor and solar panel equipment assembly) contributes to flat steel needs (for casings, frames, etc.). Malaysia’s steel federation (MISIF) noted that new semiconductor factory investments are boosting flat steel demand domestically.
In Malaysia, dozens of new data centers are planned through 2030 to support AI and cloud growth. Each large data center can consume thousands of tonnes of steel in its construction. Furthermore, AI’s rising compute needs are driving an unprecedented scale of investment in server farms – Sequoia Capital estimates an “enormous” CAPEX surge for new AI data centers globally, which implies robust orders for steel components. For Malaysia, MISIF highlighted that semiconductor industry investments (part of AI infrastructure) are directly lifting flat steel demand locally.
Environmental Considerations
The National Investment Council (NIC) has approved proposals to accelerate the implementation of carbon tax and carbon pricing mechanisms for emission-intensive industries, with the steel sector leading compliance efforts. MITI is developing a decarbonization roadmap including regulations to measure, report, and verify greenhouse gas emissions. These environmental initiatives will likely affect production costs for all steel products but may create competitive advantages for more efficient producers.
EV push
Malaysia’s National Automotive Policy (NAP 2020) aims to double annual vehicle output to 1.22 million units by 2030, largely by embracing EVs. This push will elevate demand for automotive-grade CR and GI steels, especially advanced high-strength steel for lightweight EV frames. If industrial plans (e.g. NIMP 2030 and NAP 2020) succeed in attracting EV assembly plants, local steelmakers could see a surge in orders for quality CR and GI products.
Overall:
In summary, CSC Steel’s products will remain relevant in the future due to the ongoing need for steel in key industries. However, the company faces intense competition from both local and international players, which will challenge its market share and profitability.
(3) Financial performance
Balance Sheet Quality
CSC Steel Berhad has exhibited robust balance sheet quality from 2011 to 2024, consistently maintaining a net net current asset (NNCA) status. The NNCA increased from RM487 million in 2011 to RM741 million in 2024, reflecting a compound annual growth rate (CAGR) of 3% over 14 years. This steady growth demonstrates the company’s ability to build liquid assets while effectively managing liabilities. Notably, CSC Steel has rarely relied on external financing, engaging in debt only briefly in 2021 and 2022, which was fully repaid by 2022. The current market capitalization to NNCA ratio of 0.59—the lowest in the observed period—suggests that the company’s assets are significantly undervalued relative to its market price. Operating in a low-profit-margin industry without leveraging debt, CSC Steel’s healthy balance sheet provides a strong foundation for financial stability and resilience against economic uncertainties.
Earnings and Cash Flow Analysis
CSC Steel Berhad has shown earnings resilience despite operating in a competitive, low-margin industry, recording only one loss-making year in 2014. Revenue has grown notably, with an average of RM1,590 million from 2022 to 2024, compared to RM1,100 million during the declining period of 2011-2015, though the net profit margin has fluctuated, averaging around 3%. The company has consistently generated positive free cash flow (FCF) on an aggregate basis from 2011 to 2024, despite negative FCF in specific years (2011, 2014, 2017, 2021). Cash from operations exceeds net income, with approximately 44% (RM304 million out of RM691 million) reinvested into capital expenditures (CAPEX) to support production capacity. Dividend payments have been adequately covered by FCF, reflecting a balanced approach to shareholder returns and operational reinvestment. This strong cash flow generation highlights CSC Steel’s operational efficiency and long-term sustainability in a challenging market environment.
(4) Company characteristics
Strengths
Robust Balance Sheet
CSC Steel maintains a strong financial position, characterized by a consistent net net current asset (NNCA) status since 2011. The NNCA has grown significantly from RM487 million in 2011 to RM741 million in 2024, reflecting excellent liquidity. The company operates with minimal debt, having only briefly utilized external financing in 2021 and 2022, which was promptly repaid. This financial prudence provides resilience against economic downturns and flexibility for future investments or shareholder returns.Operational Efficiency and Cash Flow Generation
Despite operating in a low-margin industry, CSC Steel has consistently generated positive free cash flow (FCF) from 2011 to 2024 on an aggregate basis. Its cash from operations exceeds net income, showcasing efficient management of working capital and operational costs. About 44% of this cash is reinvested into capital expenditures (CAPEX) to sustain production capacity, while the remainder supports dividends and liquidity, highlighting operational strength.Market Relevance and Product Diversification
CSC Steel produces a range of essential steel products, including pickled and oiled steel (PO), cold-rolled steel (CR), hot-dipped galvanized steel (GI), and pre-painted galvanized steel (PPGI). These products serve key industries such as construction, automotive, and manufacturing. The company’s emphasis on innovation—developing new coated steel products and adopting eco-friendly practices—ensures it meets evolving market demands and sustainability standards.Strategic Sourcing and Parental Support
The company benefits from a strong partnership with China Steel Corporation of Taiwan, its parent entity, which supplies raw materials (hot-rolled steel coils) and provides technical expertise. This relationship ensures a stable supply chain and enhances CSC Steel’s competitive edge through access to advanced technology and operational synergies.Resilience in Competitive Markets
CSC Steel has demonstrated resilience despite intense competition from local and international players. With only one loss-making year (2014) in over a decade, the company’s ability to navigate cyclical downturns highlights its adaptability and operational robustness, reinforcing its market position.
Weaknesses
Low Profit Margins and Earnings Volatility
Operating in a commodity-driven industry, CSC Steel faces inherently low profit margins, averaging around 3% net profit margin. Earnings are volatile due to external factors like fluctuating global steel prices, raw material costs, and import competition. This inconsistency challenges sustained profitability and may deter investors seeking stable returns.Dependence on Cyclical Industries
The company’s primary customers—service centers, roll formers, pipe manufacturers, and drum manufacturers—are linked to cyclical sectors such as construction and manufacturing. This reliance exposes CSC Steel to economic cycles, risking revenue declines during downturns.Intense Competition and Import Pressures
CSC Steel contends with significant competition from local manufacturers and imported steel, particularly from China and Vietnam. The lifting of anti-dumping duties in 2024 has already pressured profitability, and ongoing trade dynamics may further compress margins, posing a persistent challenge.Limited Geographic Diversification
While CSC Steel exports to Southeast Asia and Oceania, its sales are predominantly concentrated in Malaysia. This geographic focus limits its ability to offset risks tied to local market fluctuations or policy shifts, making it vulnerable to regional economic conditions.Undervaluation and Market Perception
Despite its strong balance sheet and operational efficiency, CSC Steel’s market capitalization to NNCA ratio stands at a historic low of 0.59. This suggests the market may undervalue its assets, possibly due to concerns over future profitability or growth prospects, which could restrict access to capital or strategic opportunities.
(5) Valuation
Quantitative Analysis
1. Balance Sheet Strength
Net Cash vs. Market Cap: With RM374 million in net cash and a market cap of RM402 million, the market values the operating business at just RM28 million (RM402m – RM374m). This is a striking disconnect—essentially, you’re getting a profitable business for a tiny fraction of the stock price, cushioned by a massive cash pile.
Net-net Current Assets (NNCA): Growing at a steady 3% CAGR since 2011, NNCA reflects a robust liquidity position. The current market cap to NNCA ratio of 0.59 is the lowest historically, suggesting the stock is trading at a deep discount to its liquid asset value.
Net Operating Assets: At RM526 million, these exceed the market cap by RM124 million, reinforcing the idea that the company’s tangible worth is underappreciated.
Takeaway: The balance sheet is a fortress—loaded with cash, no debt, and assets that dwarf the market’s valuation. This screams potential undervaluation.
2. Earnings and Profitability
Future Earnings: Expected at RM30 million annually with no growth. This assumption feels conservative given historical resilience.
Historical Profitability (2006–2023):
Gross Profit Ratio: Ranges from 1% (2014) to 14% (2009), averaging ~6.5%. It’s volatile, reflecting the steel industry’s cyclicality.
Net Income Ratio: Averages ~3%, with only one loss year (2014, -2%). Peaks at 10% (2009) and troughs at 1% (2022).
Operating Income Ratio: Mirrors net income, averaging ~3.5%, with highs of 11% (2009) and lows of -2% (2014).
Revenue Trends: 2022–2024 average revenue (RM1,590m) exceeds the 2011–2015 declining period (RM1,100m), yet profit margins remain slim and fluctuating, consistent with a low-margin, cyclical business.
Takeaway: CSC Steel is a steady earner, weathering industry cycles with only one hiccup in 18 years. The 3% net margin is modest but reliable, especially without leverage amplifying risks.
3. Cash Flow Dynamics
Free Cash Flow (FCF): Positive on aggregate from 2011–2024, though negative in 2011, 2014, 2017, and 2021. This ebb and flow align with industry cycles.
Cash from Operations: Exceeds net income, signaling high-quality earnings. Of this, 44% (RM304m/RM691m) goes to CAPEX, balancing maintenance and cash preservation.
Financing and Dividends: Rarely uses external financing (briefly in 2021–2022, repaid by 2022), and dividends are fully backed by FCF—a sign of financial discipline.
Takeaway: CSC generates real cash, supports dividends without stretching, and avoids debt traps. It’s a cash machine with a conservative streak.
4. Valuation Metrics
Price-to-Earnings (P/E): Market cap (RM402m) ÷ Earnings (RM30m) = ~13.4. For a no-growth company, this is fair but uninspiring.
Enterprise Value (EV): EV = Market Cap – Net Cash = RM402m – RM374m = RM28m. EV/Earnings = RM28m ÷ RM30m = ~0.93. This is absurdly low—the market assigns almost no value to the operating business.
Market Cap to NNCA: At 0.59, it’s a bargain compared to historical norms, hinting at a margin of safety.
Takeaway: Traditional P/E looks reasonable, but adjusting for cash reveals a dirt-cheap operating business. This disconnect suggests either overlooked value or hidden risks.
Qualitative Analysis
1. Business Model and Products
CSC Steel produces pickled and oiled steel (PO), cold-rolled steel (CR), hot-dipped galvanized steel (GI), and pre-painted galvanized steel (PPGI)—staples for construction, automotive, and manufacturing. Demand isn’t flashy but endures.
2. Market Position
A key player in Malaysia’s steel market yet dwarfed by local and global rivals. The 2024 lifting of anti-dumping duties unleashed cheaper imports, threatening margins.
3. Customer Base
Serves service centers, roll formers (largest segment), pipe manufacturers, and drum makers. Diversified enough to avoid single sector dependence but tied to cyclical industries.
4. Supply Chain
Sources hot-rolled steel coils (HRC) from its parent, China Steel Corporation (Taiwan), ensuring reliability amid global supply swings.
Takeaway: CSC is a solid niche player with stable inputs and adaptive strategies, but it’s not immune to competitive and cyclical pressures.
Investment Synthesis
1. Undervaluation Evidence
The operating business (worth RM30m in annual earnings) is priced at RM28m, backed by RM374m in cash. Add RM526m in operating assets, and the market cap of RM402m looks like a steal.
The 0.59 NNCA ratio screams “cheap” relative to history.
2. Stability Amid Cyclicality
One loss in 18 years, a 3% average net margin, and consistent FCF paint a picture of resilience. No debt amplifies this strength.
3. Risks
Competition: Import pressures post-2024 could squeeze margins.
No Growth: Flat earnings limit upside unless catalyzed.
Cyclicality: Steel’s ups and downs could test patience.
4. Catalysts
Cash Deployment: Special dividends or buybacks could jolt value.
Trade Policy: Reimposed duties might boost profitability.
Innovation: New products could lift margins.
5. Valuation Scenarios
Base Case: Earnings RM30m, P/E 10 = Operating Value RM300m + Cash RM374m = RM674m (67.7% upside).
Bear Case: Earnings drop to RM20m, P/E 8 = RM160m + RM374m = RM534m (32.8% upside).
Bull Case: Earnings rise to RM40m, P/E 12 = RM480m + RM374m = RM854m (112.4% upside).
Even the bear case offers a cushion, thanks to that cash moat.
Creative Perspective
Picture CSC Steel as a treasure chest in a stormy sea. The chest holds RM374m in gold (cash), guarding a humble but steady workshop churning out RM30m yearly. The market, distracted by the storm (competition, cycles), prices it at RM402m—barely above the gold’s value, as if the workshop were worthless. Yet, this workshop has weathered tempests for 18 years, losing its footing only once. With a clever captain (management) to wield the gold—say, via dividends or growth—the chest could shine far brighter than its current dull gleam.
Conclusion
CSC Steel Holdings Berhad is undervalued—a rare gem blending a rock-solid balance sheet, consistent cash flow, and a price that ignores its operational worth. Risks like competition and stagnation exist, but the RM374m cash buffer and low valuation (EV/Earnings < 1) provide a hefty margin of safety. For patient investors who can stomach steel’s volatility, the upside (33%–112%) outweighs the downside.
Verdict: Buy. This isn’t a rocket; it’s a fortress with hidden potential. If management unlocks the cash or margins improve, the reward could be substantial.
