I did initial reports on both companies earlier, so this post will not go into the superficial stuff, but look deeper at these 2 steel middlemen, and what I feel some investors may have misunderstood about the industry’s characteristics. Here are the earlier posts: LTC Corporation (Part I) LTC Corporation (Part II) Asia Enterprises Holding Ltd Analysis – August 2016 In this post, I aim to highlight:

• How investors with different level of competencies will analyse these 2 companies
• Clarify why even though I’m a deep value investor, I’ve previously said that with regard to these 2 companies, the global macro picture and the resulting steel price is more crucial currently, rather than valuations
• The weighted average price of inventory and how it accentuates profits/losses
• The FCF utilization of LTC Corporation

For the purpose of simplicity, I’ll describe 3 levels of investor competencies. Of course, in reality, all investors are divided ......