Steppe Cement Share Discussion Threads

[aleman] 01/8/2022 11:39

You seem to have overlooked the 5p or 3.8p decision. If it's the Prosperity Tax and only for 2022, there's the option to pay 10p next year - or maybe 11p, given how business is going. Or I wonder if they might consider buy-backs on on top a dividend. Not usually a fan but it would put a rocket under the share price on this occasion.

[zangdook] 01/8/2022 10:31

Four possibilities -
1. Dividend is ok, and they pay it. Sp rises
2. Dividend is ok but they decide to miss it this year - unlikely. Sp falls
3. Dividend is not ok so they do some corporate juggling and find a way to pay. Sp falls and then rises, unless the solution is announced at the same time as the tax news, in which case it probably just rises assuming there's no downside to the corporate stuff
4. Dividend is not ok so they decide to miss it this year. Sp falls hard.

¯_(ツ)_/¯

edit: of course the share price isn't likely to behave as we might consider predictable or rational

[zangdook] 01/8/2022 05:14

So it's just a matter of waiting. Isn't it more usual to write your laws out in detail before they come into force?

[aleman] 31/7/2022 23:33

Is this what seems to be causing confusion? It sounds like STCM could be exempt from the withholding tax/prosperity tax provided they comply with certain conditions - but those conditions have yet to be published. I'm far from sure about it, though. I only just looked for it tonight and I'm not familiar, but it seems to fit the narrative. The last sentence of this sample is interesting. Could it be a problem for 2022 only?



Tightening of Foreign-Sourced Income (FSI) Exemption

Since year of assessment (YA) 1995, the income of any person derived from sources outside Malaysia and received in Malaysia has been tax-exempt (the FSI exemption). Only tax-resident companies carrying on banking, insurance, or sea or air transport businesses were excluded from the FSI exemption.

One of the FA amendments (the FSI amendment) seeks to tax tax-resident persons on their foreign-sourced income remitted to Malaysia and to restrict the FSI exemption to non-resident persons, with effect from Jan. 1, 2022— marking a significant departure from the entrenched position .

As such, tax-resident persons, whether individuals or corporations, would be taxed on their foreign-sourced income received in Malaysia, initially at a flat rate of 3% on gross amount received from Jan. 1, 2022 to June 30, 2022 and thereafter at prevailing income tax rates.

However, at the eleventh hour, and unexpectedly, a press release was issued by the Ministry of Finance (MOF press release) the same day on which the FA received Royal Assent, with a view to ameliorating the potentially far-reaching detrimental effect of the FSI amendment.

Pursuant to the MOF press release:

all categories of foreign-sourced income received in Malaysia by tax-resident individuals from Jan. 1, 2022 to Dec. 31, 2026 would be tax-exempt provided that no partnership business was carried on by the individual;
for tax-resident companies and limited liability partnerships, only foreign-sourced dividend income received in Malaysia by them from Jan. 1, 2022 to Dec. 31, 2026, is tax-exempt, and all other types of foreign-sourced income remain taxable.

However, in both instances, the exemption is subject to compliance with conditions which have yet to be issued by the Inland Revenue Board. Hence, it remains uncertain as to how the FSI exemption will operate in practice.

The MOF press release also clarified that the “prosperity tax” or “cukai makmur” would not apply to foreign-sourced income received in Malaysia by small or medium-sized enterprises (SMEs) which are taxed under paragraph 2A of Schedule 1 to the Income Tax Act 1967. The prosperity tax was introduced through the FA to tax companies (other than SMEs) earning chargeable income in excess of 100 million Malaysian ringgit ($23.8 million), so that the first 100 million Malaysian ringgit of its chargeable income would be taxed at 24%, and any excess would be taxed at a higher rate of 33%. The prosperity tax is imposed for YA 2022 only.

[my retirement fund] 31/7/2022 22:56

The tax rate applicable to a Labuan entity is 3% on the chargeable income from Labuan trading activities only and zero for none Labuan. This means the income from the Labuan non-trading activities (ie the holding of investments in securities, stocks, shares, loans, deposits or other properties) of a Labuan entity is not subject to tax at all. The alleged 24% confusion over some unknown Malaysian withholding tax which has miraculously appeared and very clearly completely unconnected with the laws and regulations applicable to Labuan entities seems from my own research, wholly fictitious. (disclaimer, this is from my own research and I would need to take appropriate legal advice from appropriate international tax experts to consider shorting this stock). Currently I have no position, I am unable to invest in this company as I personally find it uninvestable. My starting point when choosing my investments is always along the lines of if it looks too good to be true, it probably is. I wish others who hold an alternate view my best wishes and hope it works out for you and hope in time I am proven wrong and you all get your correct share of the reported profits.

[3800] 31/7/2022 22:12

I think retirement fund is pointing out legitimate concerns If the dividend gets paid all is Ok and the share price is very very cheap. but there is a chance that it won't and as time goes on that becomes more of an issue, a passed dividend here would crush the share price. It's not a total dead cert that the dividend will get paid just very likely.
3800

[eggbaconandbubble] 31/7/2022 21:58

retirement fund - you trying to run the price down????

[aleman] 31/7/2022 20:47

Netherlands indirectly held holding company fits in somewhere?

[my retirement fund] 31/7/2022 20:30

This is a London listed company on Aim that is incorporated in the Malaysian Federal Territory of Labuan, with its advisors in Australia and its office in in Kuala Lumpu, carrying out its business in Kazakhstan right ?

[tag57] 31/7/2022 18:03

MRF. I had a look into this and the Govt have issued new tax rules affecting dividend payments but have not provided further clarification for companies to move forward, so until they do, this is going to be stuck.
So good news is that it isn’t the management trying to stuff the investors.

[andydaf] 31/7/2022 07:05

FWIW i am sure the company wants to pay the dividend as much as we want to recieve it.Directors are not exactly overpaid here and i am pretty sure the ceo and the rest of the concert party want their top up.Interims in september and fingers crossed all will be looking good.Kazakhstan seems to be weathering the storm quite well as far as i can see.Imho this is a good well run company,maybe there is not much growth but 5p is a stonking yield.Whats more looking at the updates i really cannnot see why 5p is not on the cards for next year as well.As always GLA and we will just have to be patient

[gutterhead] 28/7/2022 20:33

Dividend payment would be good

[mattjos] 28/7/2022 20:09

I've see these Holdings statements before where Party N says they are now out and at Zero but, what they have actually done is sold their remaining rump to an MM who is willing to dribble it out for next few days/weeks. Being 'at Zero' does not necessarily mean the overhang is entirely now gone.Then business has the cash to pay the dividend & the few majority equites holders will be keen to secure that dividend but, equally as keen not see a chunk of it disappear in unnecessary taxes.There is a pretty decent alignment of interests between the majority equity holders, the management equity holders and the PI equity holders so, I am persuaded that the necessary efforts are underway, behind the scenes, to determine the necessary workaround.In the meantime, the core business is performing well and is now entering the seasonal sweet spot for volume sales.Management have consistently demonstrated a deep understanding of their market & the requirement to balance Sales v. Price & Costs to optimise their Gross Margin.As I've repeatedly observed, this is viewed by most as far too 'boring' to merit investment but, given the state of things, I'm comfortable with a competent, 'boring' & grossly undervalued investment that continues to sail under the radar of 90% of investors.The herd will arrive at some point but, i hope that day is still some long time into the future as i struggle to find anything quite as persuasive for new monthly drip-feed investment.

[mattjos] 28/7/2022 10:37

few more for me today while easily available

[zangdook] 27/7/2022 14:48

Three days to the anniversary of our last dividend.

Is it pure coincidence that both the interim and final dividends didn't happen because of (unrelated) tax issues?

I'm also in NTBR where they haven't declared a dividend because they couldn't make up their minds if they wanted to. I kid you not. So STCM isn't the worst of the non-payers.

[3800] 22/7/2022 16:18

thanks tiger i'm glad some one has actually been and even knows how to spell it.
3800

[tigerbythetail] 22/7/2022 16:11

Well I've been to Kazakhstan a few times.
Believe me, there is a good market for cement there. Lots of new commercial buildings in Almaty and every Kazakh dreams of some land and building his own home.

[mattjos] 22/7/2022 16:04

order book much more sensitive to buying these days

[3800] 22/7/2022 15:45

in the past I have owned shares in companies which have delayed the dividend then after a while cancelled it altogether. I'm not saying that is going to happen here but it certainly a risk. Foreign companies listed on AIM always do carry extra risk, has anyone here ever visited Kasakstan? I would like to believe everything is OK but it pays to look at the downside or bullitin boards can turn into company fan clubs.
3800

[11_percent] 22/7/2022 14:48

Its just a waiting game.....

[finctastic] 20/7/2022 22:28

Zzzzzzzz. I could have made the withholding tax amount back by now if I had actually received the div and last year's interim. I hope they have been doing something worthwhile with all the PI's cash.

[xenomorph1] 15/7/2022 15:38

So the company traded yesterday -9%, like the company burned around 5-6M USD in fire xD

I really cant understand the minds of those who sale, this is a company that returns 20% annually and it has given back to shareholders in previous years, so a slight delay in dividend this year is not change in dividend policy by the company. Imagine, those 10M USD that are not disbursed as dividend will be available on the company account and thet CAN make use of them and bring additional 20% on those funds in next years earnings. So sit back, relax and enjoy in investing in a great company as Steppe Cement! Have a nice weekend all!

[eggbaconandbubble] 14/7/2022 15:05

I wonder what kind of a salary he draws for that privilege?

[zangdook] 14/7/2022 14:30

He can't be independent, he owns too much of the company. I think the term is he has a material relationship with it.