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Davidtslim sharing

Author: davidtslim   |   Latest post: Fri, 22 Nov 2019, 6:37 PM

 

THONG GUAN (TGUAN): One of the Largest Food Wrap and Stretch firm producers in Malaysia to benefit from declining LDPPE raw material cost

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  1. Thong Guan Industries Berhad (Tguan) engaged in manufacturing and trading and of plastic packaging products. It operates in two segments including plastic, food, beverages and other consumable products. The company generates the majority of the revenue from the plastic products segment which comprises of stretch films, garbage bags, industrial bags and PVC (Polyvinyl chloride) food wrap.
  1. Tguan has stayed remarkably focused on fairly simple plastic products. It is now one of the largest producers, of such mundane products as stretch films, plastic shopping bags, plastic sheets, raffia and strings, drinking straws and paper serviette. Over the years, it has built up a powerful and wide-ranging distribution network and its products, though mundane, are daily necessities and are available every where.
  1. Tguan’s has commissioned four premium stretch film production lines. The annual capacity of 11 PVC food wrap lines are about 70,000 mt. At the 1H of 2019, the company has installed a new nano 55-layer stretch film machine.
  1. TGuan outperformed in 9M19 as a result of continued sales growth and higher profit margin for its plastic products as well as sale increase in its tea and coffee products. Overall sales rose by 9.5% YoY, due mainly to higher export sales of stretch film and maiden sales contribution from courier bags as well as higher sales of tea and coffee products. Gross profit rose by 29% YoY.
  1. Tguan is optimistic to continue to grow its sales volume and profitability with the continued expansion of the courier bags and other products division, backed by the additional capacity following the commissioning of new production lines (4th nano-layered stretch film production line from Germany in 2Q19 installed, and the 11th PVC food wrap line).
  1. High gross margin may likely to sustain or improve for the rest of FY19, due to low raw material cost as a result of lower Linear Low-density polyethylene (LLDPE) prices. Let see the LDPE and LLDPE prices in Asia and Singapore as below:

Singapore price chart for LLDPE (raw materials of Tguan)

 

LLDPE CFR CHINA INDEX FUTURES (source: ICIS and tradingview)

 

USD/MYR higher in Q3’2019 vs Q22019 (80% of Tguan’s products are for export)

  1. Strong USD/MYR rate also can help Tguan to improve their margin as 80% of their products are for export (mainly to Japan and Europe). 
  1. Besides, earning and EPS in next 3-6 months should be further improved based on relatively strong USD/MYR rate in recent 3 months and low raw material cost (LLDPE), even after taking into consideration of the dilutive impact of the full conversion of ICULS and exercise of warrants (184mil share base after all ICULS and warrants exercised).
  1. Some of you may ask why PE products (PE consist HDPE, LDPE and LLDPE) of price keep dropping? It is due to PE products from US’s shale oil cannot sell to China (due to tax of 25%) and divert to SEA countries (flooded the market cause the price fall). The situation has been pointed out by LCTITAN Q2’s and Q3’s quarter reports as shown below:

Source: LCTITAN Q2 report (page 28)

Source: LCTITAN Q3 report (Lctitan is the producer of PE, raw material of Tguan)

  1. The turnover of the newly released 3QF19 has reached a new historical high (9 months 2019 also historical high). This is due to increased sales and increased production capacity. Higher turnover may slowly increase the gross profit of Tguan.
  1. It is expected both revenue and net profit may be record high profit in FY2019 higher than FY2016 where the share price hit RM4.3 and above for the following 3 reasons:
    1. Lower raw material price PE, mainly LLDPE in 2H2019 (refer chart above)
    2. Higher USDMYR rate where 80% of Tguan products are for export
    3. Higher revenue from continuous capacity expansion (backed by higher demands from Europe and Japan and 70k mt annual capacity)  
  1. This coming five-year Capex will be in the range of 30-40 mil per year (source from AGM). The current capacity utilization rate is at 80%+.
  1. The Group’s plastic products revenues mainly come from 4 categories which are stretch films, garbage bags, industrial bags and PVC as shown in the Figure 1.

  1. Food and Beverage turns from losses to small profitable in FY2019 after some loss making restaurants were closed.
  1. According to Fact.MR, global plastic protective packaging registered a steady growth at 5.4% CAGR between 2013 and 2017. The plastic protective packaging market will continue to witness modest growth in the future owing to various factors ranging from growing demand for inflatable packaging to increasing adoption of plastic packaging in the ecommerce sector.
  1. Tguan shows its product quality and consistency by meeting the strict requirement of Japan and Europe especially their new nano stretch firm machine. 
  1. Europe is likely to remain the largest market for plastic protective packaging with revenues estimated to exceed US$ 4 billion in 2019. Plastic protective packaging market is expected to witness a relatively faster growth in East Asia, as China continues to gain significance as attractive hub for packaging manufacturers, as shown in the Figure below.

Source: Fact.MR

  1. Valuation - Achieved net profit of RM43.9 million in 9months of 2019. 9M19 net earnings rose by 62% YoY. Tguan is optimistic to continue to grow its sales volume and profitability with the continued expansion of the courier bags and other products division and this is further boosted by lower material cost (helped by US’s LLDPE products flooded in SEA countries due to trade war). Additional capacity following the commissioning of more production lines (4th nano-layered stretch film production line), and the 11th PVC food wrap line will likely support further growth. Estimated FY19 Annualized Profit = 63mil, Estimated FY19 EPS = 34.2 cents.  (based on full converted ICUL and warrants share base). Fair value of Tguan should be in the range of PE11 to 13x due to its growing revenue and profitability (fair price based on PE11x = 3.77). 
  1. Packaging Materials Companies (not all direct peers) comparison (this articletable prepared in late Oct based on market price at that time)

 

Let me have a SWOT analysis on Tguan as below:

SWOT analysis (S-strengths, W-weaknesses, O-opportunities, and T-threats)

Strengths

Weaknesses

  1. Improving profit margin and growing revenue in recent 3 qtr.
  2.  Capacity keep expanding in stretch firm, courier bags and PVC food wrap productions lines may further improve its market share especially in Europe and Japan.
  3.  Growing to be one of the largest PVC food wrap producers in Malaysia.
  1.  Consumers turn to using other types of packaging materials like paper packaging for environmentally friendly reason.
  2.  Competition from other food warp producers

 

 

Opportunities

Threats (risk)

  1.  Potential beneficiary from Japan 2020 Olympic games where the demand of packaging products may increase. 
  2.  Strong USD/MYR in last 6 months rate further improve its profit margin or it may have forex gain (USDMYR rate hovering at 4.17 for past 3 months) 
  3. Expected to have small growth in profit in coming 1-2 years based on 1 billion revenue target and growing profit margin and revenue

 

  1. Rising labour cost
  2.  Higher crude oil price and LLDPE price which may affect its material cost.  

 

If you interested on my analysis report, please contact me at davidlimtsi3@gmail.com

You can get my latest update on share analysis at Telegram Channel ==> https://t.me/davidshare


Disclaimer:

This writing is based on my own assumptions and estimations. It is strictly for sharing purpose, not a buy or sell call of the company and the contents of this report should not be considered as professional financial investment advises or buy/sell recommendations. I strongly encourage you to do your own research and take independent financial advice from a professional before you proceed to invest.

I make no representations as to the accuracy, completeness, correctness, suitability, or validity of any information on my report and will not be liable for any errors, omissions, or delay in this information or any losses and damages arising from its display or usage. All users should read the posts and analysis the information at their own risk and we shall not be held liable for any losses and damages.

 

Appendices:

  1. Tguan Products:

Tguan produce high quality, cost-effective stretch films available in the machine and hand-applied formats that save you time, money, and primary packaging damaged goods.

 

Recognised as one of the leading stretch film manufacturers in Asia Pacific, Tguan has high sales turnover, production capacity, and quality standards. With over 20 years of history, Tguan's Stretch has achieved the latest annual production capacity of 85,000 metric tonnes.

TG Stretch was a division established to focus on stretch film production strategically. Continually strive for quality in products and services through technology and innovation to help our customers reduce unsellable, providing not just excellent films but also work closely with their partners to achieve their goals.

 

 

 

 

PVC Food Wrap (lot of Food Panda need PVC food wrap)

Polyvinyl chloride (PVC) food wrap is a thin plastic film typically used for wrapping food. The clear plastic wrap is used to keep your food safe for storage and transportation. They are commonly used for catering, for use in the freezer or at home to wrap fruits, vegetables, sandwiches, cheese, cooked meats, and many others. 

2. What are the Key Growth Drivers of Plastic Protective Packaging Market?

  • Plastic continues to be the widely used material in protective packaging across various industries, with introduction of advanced materials such as polypropylene that provide high barrier and temperature resistance, thereby, protecting packaged products from harsh environments.
  • Adoption of flexible packaging in the food and beverage, including pouches, bags, sleeves, shrink films, and tubes, owing to their low weight, flexibility, and durability properties, will continue to create growth opportunities for the plastic protective packaging market.
  • Bubble products being the most versatile protective packaging, manufacturers are offering multiple configuration, inflated bubble packaging with various grades that adjust the size of bubble as per the product. Moreover, recycled materials are also being used to produce modern inflated bubble products.   
  • With an increasing number of consumers opting for online shopping, companies have started focusing on offering protective packaging solutions such as bubble packaging, plastic stretch, and air cushions to ensure the protection of goods during shipping and transportation. According to the US Department of Commerce estimate in 2018, consumers spent $513.6 billion on online shopping, up 14.2% from 2017.

 

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  6 people like this.
 
Fabien "The Efficient Capital Allocater" i will continue to hold TGUAN



Stock: [TGUAN]: THONG GUAN INDUSTRIES BHD
Nov 21, 2019 11:34 AM | Report Abuse

average PE multiple is around 12x

CIMB ascribed a PE of 13x for packaging sector

i believe 40sen earnings is achievable in 2020

estimated valuation = 12 x 0.40 = RM4.80
plus net cash 0.31sen
TP = RM5.11
25/11/2019 2:25 PM
Connie555 Halo Abang Kembar Choivo...If everyone do business with your kind of thinking...this economic is not gonna work or roll anymore...

To be honest i respect pasar pagi aunty who is selling nasi lemak bungkus for RM1 per pack more than your whole analysis...i dont even bother to read at all....at least they go out there and try and dont even calculate ROC at all...KL area is flooded with nasi lemak bungkus also yet they woke up early go out to the tepi jalan and sell instead of kira this kira that kira the whole day and wasted a day and never earn a living....

let me teach you something, in chinese they always say 船头怕鬼 船尾怕贼....at the end u are destine to serve the labour force for the entire of your life.

If Jack Ma at the beginning also think like u...there is no alibaba no more....kira this kira that.....

being so calculative that at the end what also never buy and here u tot got mines thr u tot gt enemy ambush u...

u better stay in ur mancave and continue ur phobia of buying a share ok....

Not to say that calculative is not right, ofcourse no one wants to pay more for their share, but to an extend which is jz right and not too EXCESSIVE...
25/11/2019 5:05 PM
Connie555 Fire me with theories...look where Jon's Petron heading...are u gonna cover his ass?

Commonsense dont even bother to reply Jon's comment "i can name you how many how many share which is cheaper than MBMR bla bla bla"

At the end of the day, you have to be REALISTIC...u must face the reality...and REALITY IS ALWAYS CRUEL...people are convinced by how success you are and also how much money you have...

You so suka Warren Buffet....Lets imagine this...if Warren buffet is a homeless and telling u value investing shit...are u gonna listen to him??? This is where reality hits....dont always use all the theory u learnt and shoot....its not gonna hit anyone...

Go back and make some money until u no need to work.

free come kota bahru...

no offence...u can always find me there, shelter are provided
25/11/2019 5:09 PM
Connie555 Forgive me England...uncle education level is Form 3...then 1 Year of 独中
25/11/2019 5:10 PM
Ricky Yeo Connie, as always, haven't offered anything substantial. Really theory? I haven't even started throwing formulas. Uncle, england not good no problem. But at least write something useful, not blow water everyday. If you want cafeteria talk, free come Kuching. But if you want to talk Tguan, I'll wait for you any day.
25/11/2019 5:16 PM
Connie555 Jack Ma start up time bottomline is in Red...bleeding...ROC i bet is negative.....................................

Masayoshi Son invested....so he is dumb fuck or what? Never calculate ROC or what.....yet Alibaba is Masayoshi Son most successful investment afterall....

Masayoshi Son so rich...he dont have accountant like u helping him to calculate ROC????

Bleeding wor....still invest...with ur theory then he mar quite dumb fuck to invest in to a bleeding company?

Track record already telling that Jack Ma has been rejected by few investor before Masayoshi Son....
25/11/2019 5:19 PM
Ricky Yeo Everytime someone can't win argument, they call it 'theory'. When someone can't win argument, they go ad hominem. Oh wait too theory, let me explain ad hominem "refers to a fallacious argumentative strategy whereby genuine discussion of the topic at hand is avoided by instead attacking the character, motive, or other attribute of the person making the argument"

Let's dissect Connie's writing:
Personal attack #1 - at the end u are destine to serve the labour force for the entire of your life
Personal attack #2 - u better stay in ur mancave and continue ur phobia of buying a share ok
Personal attack #3 - Go back and make some money until u no need to work.

When someone can't discuss the matter, that is, Tguan, he inevitably start attacking the writer to divert attention to make it look as if he wins the argument.

Sorry Connie. You need to do better than this.
25/11/2019 5:26 PM
Ricky Yeo Connie, you're getting better, but I'm waiting for your discussion on Tguan, not Son, not Baba, not Softbank, not Wework, but Tguan. Oh wait, what happened to Wework? Should be very successful right?
25/11/2019 5:29 PM
probability what makes difference between a 'pasar malam talk' and 'theory'...nothing except RESULTS on prediction.

Both are 'stories' only...till you have empirical data to support.

Note that 'theory' which has empirical data to support in U.S market...can be a 'pasar malam talk' in Bursa...

we must accept that

I think that is the essence connie555 is trying to convey Ricky.
..............................................................

as a logical man you should be able to grasp the point he is putting across with his limited vocab
25/11/2019 5:33 PM
Icon8888 the following is Thong Guan comment of its prospects as set out in quarterly report :

For the current quarter ended 30 September 2019, the Group recorded a very encouraging double digit growth in revenue and profitability. The world economic condition is expected continue to be challenging and has impacted the growth of the plastic packaging sector. This has jeopardised the sales growth of the Group to its existing customers and its pace of market expansion. Despite this, the Group has been working hard and has concrete plans to look for new customers and markets for its products.

The Group has completed commissioning its fourth premium stretch film production line, a new blown film extrusion line and its 11th PVC food wrap line during the quarter. With the additional capacity coming on stream and the continued expansion of the courier bags and other product divisions, the Group is optimistic to continue its upward trend in sales volume and profitability.
Barring any unforeseen circumstances, the Group expects to continue its growth plans for all its business units.
25/11/2019 5:50 PM
Icon8888 Please note the following :

"With the additional capacity coming on stream and the continued expansion of the courier bags and other product divisions, the Group is optimistic to continue its upward trend in sales volume and profitability. Barring any unforeseen circumstances, the Group expects to continue its growth plans for all its business units. "

The boss sounds happy and positive, a big contrast to the bleak assessment of Ricky Yeo

who should I believe ?
25/11/2019 5:52 PM
Icon8888 For at least three to four years already, Thong Guan's boss has been consistently talking about Capex and growth for the coming years (and he kept on delivering). You don't make this kind of statement and planning unless you believe the industry is healthy and the prospects is good. Thong Guan boss is very savvy. The fact that he has always been happy and positive is indication that he is confident of the growth prospect.

as an expert in the industry, he must have known something we don't know and Ricky doesn't know
25/11/2019 6:05 PM
Icon8888 one of the biggest pleasant surprise of this quarter is their revenue posted huge gain

so it is not only benefiting from margin expansion due to low raw material cost

something positive is happening on the ground

in this article dated 1 July 2019, Thong Guan mentioned growth potential in Latin America

"The group is also working on penetrating into new markets in Latin America, and the US. “There are countries in Latin America who prefer to source stretch film and garbage bags from Asian countries."

what should I believe ? ROC ? or the business details as given to us by Thong Guan, backed by sterling set of results ?
25/11/2019 6:18 PM
Icon8888 read this article to find out more :

https://www.thestar.com.my/business/business-news/2019/07/01/thong-guan-to-spend-up-to-rm40mil-on-expansion
25/11/2019 6:19 PM
yfchong If pe 15 happy liao
25/11/2019 8:08 PM
Connie555 Based on Ricky analysis, my understanding is we should believe the analysis of the academian instead of Thong Guan Boss himself i suppose.

Correct me if im wrong Ricky...Uncle Vocab is very limited.

Btw I ask u to Go back and make some money until u no need to work is trying to advocate u to go and take some risk instead of attacking you. dont get me wrong, otherwise i wouldnt wasting my time telling u chinese philosophy 船头怕賊 船尾怕贼...
25/11/2019 8:20 PM
Sslee Dear Connie555,
Why so angry?
In life sometime fortune favor the brave. The brave one become boss and hire the calculative one to work for him.
Choivo still have a lot to learn. In i3 only KYY pump and pump and at the end others dump to him or he dump to others.
Incon8888 no pump and dump because he likes to recommend stock at its low and this year many of his stocks is flying.
3iii like to talk theory and I like to talk politic.
So everyone got what they want. What a wonderful world.

Thank you
25/11/2019 9:23 PM
Ricky Yeo Probability, like that die loh, everything need empirical data to support. go ask TSLim to empirically support that PE 11-13 is fair then.

Let's start with you. Given pasar malam talk is the same as theory, but I don't trust you. Maybe you should provide you empirical data to support pasar malam talk = theory. Don't forget to add reference and citations.
26/11/2019 4:00 AM
Ricky Yeo When did I say you should trust me instead of Tguan's boss? Never said that. All I'm writing here is to provide an alternative perspective. I never said whether Tguan is good or bad either. Any stock is good at some price, bad at other price. I'm telling you what's happening in the flexible plastic packaging industry, it is up to you to make the judgment how that is going to affect Tguan in the next 10 years. But if one is going to call others academian or theoretician everytime someone offer a conflicting view, life is going to be tough. That, I don't need empirical data.
26/11/2019 4:13 AM
YiStock "We have penetrated markets to supply premium plastic films.."

SLP and Scientex has higher PE partly due to product mixed.

Read more at https://www.thestar.com.my/business/business-news/2019/07/01/thong-guan-to-spend-up-to-rm40mil-on-expansion#KZOVwfLd8GYcFdjp.99
26/11/2019 9:25 AM
Choivo Capital Can you tell me a scenario where the boss and majority owner of the company does not sound happy and positive? All course you're going to toot your own horn.

Shahril from sapura say going to turnaround dunno how many years d. Now after huge right issue.

Current asset less than current liability again.

No idea if thong guan is good or bad business since i've never studied it in depth before.

But for the newbies here, please note davidtslim spoke very highly of MASTEEL, HENGYUAN etc at their all time high prices, before they fell more than 60-70%.

Do not read this and think you now understand the business, and you are now "investing" in the company.

If you're trading it, you know better than me how to play this.

===
Posted by Icon8888 > Nov 25, 2019 5:52 PM | Report Abuse

The boss sounds happy and positive, a big contrast to the bleak assessment of Ricky Yeo
27/11/2019 9:18 AM
Choivo Capital I mean, booking holdings, the company that holds Booking.com, Agoda.com, priceline.com.

With great economics and moat is around 16PE.

You sure you want to pay 13 times earnings for a commodity co?

I mean at this price, using a very cursory view, it does not look too expensive, but im not sure its that great as a long term investment. I do regret not buying some at 2-ish.

Still wonder why tbh, probably because i thought it was a commodity co, and they were better ones (prices did not similarly increase though, ahah).

But as a trade, got good story, lots of eyeballs on this co, potential good quarters coming up that can support the future frying, potential extra davidtslim article, and OTB KYY frying?

Should be fine for the next 3-6 months.



=====
Stock: [TGUAN]: THONG GUAN INDUSTRIES BHD
Nov 21, 2019 11:34 AM | Report Abuse

average PE multiple is around 12x

CIMB ascribed a PE of 13x for packaging sector

i believe 40sen earnings is achievable in 2020

estimated valuation = 12 x 0.40 = RM4.80
plus net cash 0.31sen
TP = RM5.11
27/11/2019 9:24 AM
Connie555 this 2 kembar......really a tin kosong...

When commonsense start recommending MBMR he at there i could recommend uhow many how many stock which is cheaper than MBMR...while he at there icould i could, MBMR already one fold and outperform the market...and his petron price couldnt sustain nvm but drop 99....

if it is a pump n dump case, shark would hv dumped MBMR already, but seems like not the case, given so many months already...MBMR still sustain while petron kena dump like fuck...so who is the one kena trap by pump and dump....

Another guy which is Jon abang kembar...Ricky Yeo...dont know why they always appear tgt...while ricky at there keep saying tguan doesnt worth that much blabla teaching how to calculate ROC...tguan price already risen 1/3...

They are more suitable to be a colleage lecturer than investor....while saying ppl pump and dump never thought of himself posting RCE capital shit on i3....that thing himself post doesnt consider pump and dump while other people post then is consider pump and dump....

i would say they are sour grapes...last time so lan confirm about RCR talk until he has 30% of his portfolio, now on the other hand he sold it all already....if you are so confirm about something why so fast change your opinion?

When ever i mention things like this this 2 kembar cant answer it dirextly and use all the theory they learnt to fire me...I am ok with that...free can come find uncle YC at kota bahru....
27/11/2019 9:28 AM
Connie555 dont talk about other people share first lar...talk abour your petron first....cant even manage own petron properly....ur own rce also....last time say invest 10yrs down the road la blablabla...

why sell rce then? why dont gv them time to rectify their mistake? since u say u are long term investor....

how is ur petron? let shark dump until cannot see front road jo? thats why come and sour grapes others???

pls la john....cant make money dont at thr cry fathee cry mother...

and say lar...since the day i raise this question u nvr explain also everytime say ppl pump n dump....

what about ur rce capital post? not pump and dump? when ppl recommend a share then is pump and dump....when u recommend a share is like jesus giving out holy water everyone cant judge about it and u wont answer it..... and mbsb post is it u buy short then u post the article to talk bad about it?

i still rmb the day how u attack icon and commonsense....
at the end of the day seems like commonsense mbmr is the one look cheap thats why market rerated it...instead of ur how many how many share which is cheaper bla bla....i only hear tin kosong sound at thr ting ting tong tong....at the end results speak for everything
27/11/2019 9:36 AM
Choivo Capital Very long never see Connie posting d.

On the nasi lemak ladies.

I have nothing against people trying their luck and putting their neck out there. To try hard and make a living.

I'm just saying, work smart better than work hard.

You want to sell nasi lemak? Well ask yourself?

1) How good is your nasi lemak? How is your sambal? is it the best within a 10km radius?

2) What is your price? RM5 for one bungkus? or RM1 or RM3? Is it of good value? RM5 come with chicken?

3) What is your costing, you got big pot anot? or you still using small pot?

4) How many people selling nasi lemak around the vicinity? If there are 3 stalls selling nasi lemak next to you, you sure you want still want to sell nasi lemak, or maybe you sell milo ais better?

5) If egg and rice price drop 20%, you expect to make more profit. But if you are in the scenario where you got 4 people around you selling nasi lemak, and they drop the price from RM2 to RM1.8. You sure you want to keep at RM2?

6) What is the demand elasticity like? Does your still taste better?
27/11/2019 9:37 AM
Up_down Wait for the price to cool down first ...Half way big gap up is not a good sign...example MBMR, Takaful, Redtone...
27/11/2019 9:39 AM
Connie555 btw, i knew professor chew of Tarc, can intro u for him...they are looking for finance lecturer. U and ur abang kember are suitable...

gv me ur email if u are looking for job especislly lecturer job
27/11/2019 9:44 AM
Choivo Capital Connie,

My rce capital post, people tell me, after they read, they get confused, dunno should buy anot. At least 30% of the article, detailing and the risk and the dangers. Good and bad inside, make people confuse only.

While david's one, after you read, he is clearly telling you, "SAILANG NOW", not a word on risk etc.

Now my RCE, why i sold? I think you can find the article explaining it. David when he sell, got tell you ah?

And my RCE, after i sell, it continue going up summore.

The sign of a good investor, is that he sells a good investment for a better one. This should mean over a long period, the price increase of the second should exceed the first. (this is clearly not the case for me the last 2-3 months lol, though my genting warrants and mother did ok)

David one leh?

MASTEEL, ANJOO, MUDA, HENGYUAN, LIONIND, LCTITAN etc. I dont need to explain more lah.

Which is, to be fair, the mark of a good trader or goreng artist. After you sell, it goes up abit more before crashing down to holland (the going up abit part is optional).
27/11/2019 9:47 AM
Connie555 instead of counting how many cars on the highway count until u sot 9 jor better come and work for professor chew....can express all ur theory...and also why ur theory doesnt work in petron... this and that....

student of tarc sure feel very thankful to hv u n ur abang kembar as their lecturer
27/11/2019 9:49 AM
Choivo Capital Connie,

Lets make a fun bet ok.

You prepare a portfolio of stocks, i just pick one petron. 3 year later, see which one higher.

Loser donate 10k to nasi lemak auntie to expand business.
27/11/2019 9:51 AM
Connie555 yawn...dont talk about 3 years....while u cant fucking hold your RCE like how u hold ur balls for so many years you come and tell me 3years????

REALLY? PLEASE LA....3 YEARS 4 YEARS....ONE RCE CANT HOLD FOR 3 YEARS NOW AT THR TELL ME 3 YEARS.

______________________________

Choivo Capital Connie,

Lets make a fun bet ok.

You prepare a portfolio of stocks, i just pick one petron. 3 year later, see which one higher.

Loser donate 10k to nasi lemak auntie to expand business.
27/11/2019 9:51 AM
27/11/2019 10:02 AM
Choivo Capital My rce sold at one month after the 3rd year anniversary actually. :)

No idea why this is relevant though.
27/11/2019 10:04 AM
Up_down Everything happens for a reason. Many Bursa retailers have turned into short or mid term investors due to the structural issues of the local business. Many companies are involved in short cyclical business in nature with more than 90% of the listed companies.
27/11/2019 10:31 AM
Up_down Don’t blame the short sighted of Bursa retailers, it’s the environment causing them to protect their capital as a first priority in such situation. Is it pump and dump? Go for DJ companies with strong moats if you want to seen to be noble in investing for long term or follow 3i.
27/11/2019 10:31 AM
Up_down It’s unethical not to make money in a business for long term. The business would certainly go burst. So..it is unethical too for being not able to protect our capital investing or trading in share market. The risks of being extinction.
27/11/2019 10:56 AM
Connie555 Whatever u said u still a tin kosong to me....ting timg tong tong... track record worst than commonsense...

last time say icon888 pump and dump ended up at thr PLP.....

PLP.....

PLP.......

____________________________________
Choivo Capital My rce sold at one month after the 3rd year anniversary actually. :)

No idea why this is relevant though.
27/11/2019 10:04 AM
27/11/2019 11:22 AM
Fabien "The Efficient Capital Allocater" if the company is growing 20% over the next few years, it's fair to pay PE 13x (though note that i didn't pay 13x, i believe its a fair valuation. my cost is at single digit PE)

whether it's a great long term investment, i'm not sure.

it's not my core holdings anyway.
27/11/2019 11:25 AM
Fabien "The Efficient Capital Allocater" but i do have to take note of what Ricky pointed out.

the competitive landscape surrounding the industry.

and the ability to scale up.
27/11/2019 11:33 AM
Ricky Yeo if a company can compound 20% over 3-5 years, then one should buy all they can at 13x.

But to achieve 20% growth, assume dividend payout of 0%, ROC has to be 20%.
27/11/2019 12:52 PM
Fabien "The Efficient Capital Allocater" it's getting closed to that i believe.

if i'm not wrong, latest ROIC is at 18%
27/11/2019 1:48 PM
Icon8888 All these ROIC thing nonsense

Look at Dufu, UWC, MI, etc

What is their ROIC ? How much are their PE ?

Get my point ?
27/11/2019 1:50 PM
Ricky Yeo Let me try to translate your point so I can get your point

All these "smoking is bad" nonsense

Look at my uncle, my neighbour, my friend etc

What is their health (super healthy)? How much they smoke (a pack a day)?

Get my point?
27/11/2019 4:32 PM
Connie555 ting ting tong tong whr is the choivo PLP
27/11/2019 9:19 PM
popo92 scientex plastics packaging division have recorded lower margins than thong guan all these years(latest quarter slightly surpass tguan merely 1.59% ebit), so if you consider plastics packaging only scientex's roic would be worse than thongguan. Of coz you need to consider what industry are they into. You are comparing peers not Semiconductor companies like MI who currently have ROIC of 25% and its still growing fast.
27/11/2019 11:30 PM
Ricky Yeo So what are you trying to say?
28/11/2019 4:32 AM
Ricky Yeo Scientex spent >$500 mil making acquisitions over the past 5-6 years so ROIC will definitely get dragged down due to a massive increase in invested capital. And if Scientex continue to acquire other companies in the future, which they will, ROIC will continue to be less than TG. But then again, investing is about paying for future ROIC, not past ROIC; future cash flow; not historical cash flow.
28/11/2019 6:31 AM
Ricky Yeo And this comes back to Icon's point, why some stocks have disconnection between their ROIC and PE i.e low ROIC but high PE.

Why did Scientex's share price went up 800%, P/E expanded from 7x to 17x, over the past 7 years, while TG's share price only went up 200% during the same period when TG's margin and ROIC is superior to Scientex (excluding property division)? Because the market has higher expectation that Scientex's aggressive expansion will increase future cash flow (once they slow down their expansion), thus generate a sustainable and gradually higher ROIC in the future (when utilisation rate catches up).

Not saying TG is bad or anything, 200% gain in 7 years is impressive, but ROIC cannot be interpreted based on the number itself. Investor has to connect that number to what the business is doing. ROIC is not a formula, or a meaningless number on a stock screener, but a starting point for investor to understand the business strategy.

ROIC is like the bananas (fruits) on a banana tree. IF you see beautiful bananas (ROIC), you want to pay more to own the tree. But if you see disease and pest eroding the tree roots, then you will pay less because future bananas will be less or even none. In contrast, a banana tree might have little to no fruits now, but if one is to look at its healthy roots, strong trunk, fertile soil, then one would pay more knowing the future banana will be abundance and delicious.

Hope you get the analogy. The point is: Don't always look at the fruits, the fruits right now is irrelevant, you're paying for future fruits (future cash flow), and the only way to be sure you'll get alot future fruits is to look at the tree, the roots, the trunk, the soil, the weather (industry).
28/11/2019 8:45 AM
Ncm88 Sell now retracement wait at 3.2
28/11/2019 8:53 AM
jiaen0509 Buy at RM3.44 and now the price dropped to RM3.30 at 29-Nov. Shall I give it up or hold it for long term? Newbie here
29/11/2019 6:39 PM
Fabien "The Efficient Capital Allocater" newbie, perhaps you should stay away from the market, learned your trade (read up and learn from the experienced investors) before investing your hard earned money.

the market is very unforgiving.
02/12/2019 4:12 PM


 

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