Lionmesh Prima (LMSH) shares had gone up high

Lionmesh Prima Tbk (LMSH) set a quite optimistic target this year. The issuer, a producer of high-quality reinforcing steel nets, targets this year’s sales volume to reach 16,750 tons, up 12.72{57f679433bdda16678ea619f315c9bc28ff40af1ef9e9f7b6fe14a3c8b72c25f} from the realization of sales in 2020 which was only 14,860 tons.

Citing public exposure on the Indonesia Stock Exchange (IDX) page, the increase in sales volume has an impact on the increase in this year’s revenue target. LMSH management targets revenues of Rp 230.71 billion, or an increase of 84.86{57f679433bdda16678ea619f315c9bc28ff40af1ef9e9f7b6fe14a3c8b72c25f} from revenue in 2020, which is Rp 124.81 billion.

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LMSH’s management is also targeting to be able to book a net profit of Rp 9.29 billion, from previously recording a net loss of Rp 8.07 billion.

LMSH said, In the first quarter of 2021, there will be improvements in several national economic indicators, such as trade performance, manufacturing index, lending, to automotive sales.

In addition, along with the improving economy of China and the United States, the price of steel in the global market has increased since September 2020. Then, at the end of February 2021, the price of steel in China has increased drastically again.

“Steel prices will remain strong in the coming months as domestic demand from China strengthens and a number of iron ore producers raise prices again in April 2021,” said Lionmesh Prima’s management.

Management continued, global steel prices have tripled, and Taiwan steel stock prices have almost doubled at the same time. This is a phenomenon that has not occurred in the last two decades.

The main reason is that China has drastically cut production capacity and canceled subsidies to curb production capacity and no longer encourage exports. In addition, Australia also raised iron ore prices substantially.

China as the world’s largest steel producer has accounted for 55{57f679433bdda16678ea619f315c9bc28ff40af1ef9e9f7b6fe14a3c8b72c25f} of global production capacity. Simultaneously, as China cuts production and curbs exports, India, which is the second-largest steel producer, is currently falling into an uncontrollable pandemic situation.

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“So it is conceivable that the demand for steel is limited, so the price of steel soars,” continued the management.
As an illustration, the stock exchange temporarily suspended trading (suspension) on LMSH shares on Wednesday (19/5) following a significant increase in cumulative prices. The stock exchange has re-opened the suspension of LMSH shares starting the trading session I on May 21, 2021.

In his presentation, LMSH’s management denied and emphasized that they had no plans to take corporate actions in the near future. All material information and facts that may affect the value of the Company’s securities or investment decisions of investors have been informed to the public (according to regulations) and there is no other additional information.

On Monday’s trading (24/5), LMSH shares fell 6.64{57f679433bdda16678ea619f315c9bc28ff40af1ef9e9f7b6fe14a3c8b72c25f} and were hit by lower auto rejection (ARB) to a level of Rp 1,265. However, since the beginning of the year or on a year-to-date (YTD) basis, LMSH shares are still up 201.19{57f679433bdda16678ea619f315c9bc28ff40af1ef9e9f7b6fe14a3c8b72c25f}.

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