SHARINGAN: JAG BERHAD - JAG of all trades

JAG of all trades? Our personal favourite. JAG does electronic waste recycling. They take wastes from big tech companies like Intel and Infineon, and extract metals from the wastes to resell - mostly copper, followed by Tin, Nickel etc.

The stock was trading above 60 sen in 2017, but now only 40 sen, which doesn't make sense. Now both copper price and JAG's profit are already above 2017 level. And tech industry has enjoyed many years of booming volume, means there will be lots of e-wastes coming. And JAG just doubled their capacity few months ago. Plus now more people focus on sustainable investing (ESG), and recycling company like JAG is good for environment.

We think copper price still has alot of upside bcos it's the most supply constrained commodity in the world. Most of the new mining capacities will only come onstream after 2023. Copper inventory now is also extremely low. And more importantly now we have new demand from new sectors - renewables and EVs which are very copper intensive. Last copper bull run from 2009 to 2011 lasted 26 months and went up almost 4x. We r only halfway there now. Last bull run was driven by synchronised economic recovery globally. And this time is similar bcos Covid-19 provided an economic reset point for all countries, and so fiscal policies and recovery will be unified this time as well.

Market has been left clueless for the past 2 months. Investors haven't decided which is the next big sector to play for 2021 after glove and tech bull run last year. We started off the year with continued interests in tech and renewable energy, but towards February investors began to switch focus onto recovery play (commodity related like Ann Joo, travel related Genting). Well, JAG is best of both worlds bcos it benefits from both high tech manufacturing volume and high commodity price.

Sharingan,
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DISCLAIMER: The note above is purely facts sharing for educational and discussion purposes. We do not recommend BUY/SELL actions. We're also invested in the stock(s).