I have written about this company before in my previous article. Please click here for more fundamental analysis about NTPM.

Ever since I started my private portfolio management journey, I have always been visiting companies which I think are fundamentally sound and deserved a place in my portfolios. This round, I visited NTPM's factory in Nibong Tebal, a town situated in south Seberang Perai, Penang. Despite a long 4-hour journey drive, I felt extremely satisfied and energetic to have the opportunity to see and feel the management as well as the huge factory (close to 100 acres).

 

Basically, recycled papers and pulp will be made into jumbo rolls first before converting into final products with different sizes. According to the management, most of the competitors don't produce jumbo rolls from raw materials, but they buy the jumbo rolls and convert them into final products instead.

As the factory land is way too large for us to walk (100 acres!), David Khoo, NTPM's financial controller, drove and we stopped at intervals so as to explain more about the operational details.

Since there will be waste produced in the midst of the tissue production, the management made full use of the waste to make arch files and medium density boards. Instead of dumping the waste and get charged by the dumping site, NTPM makes a bit more money in this little segment.

Mr. Lee Chong Choon, the group CEO, mentioned that NTPM practises vertically integrated business model. In other words, they try to do all by themselves. While its competitors have external distributors to market the products, NTPM has its own lorries to deliver the inventories to the retailers. This enables them to be more flexible and possibly higher margin as distributors will mark up the price for their own profits.

 

Besides, I asked about the Vietnam's venture. NTPM will implement a different business model whereby no lorries will be used to distribute the products. Instead, NTPM will sell their products to wholesalers in Vietnam.

Finally, just my personal opinion, I think Mr. Lee Chong Choon is a very honest and long term businessman. He said that NTPM is a very conservative company and you ought to invest for the long term. Short term quarterly results won't bother him as long as the long term trend is upward.

For Mr. Lee Chong Choon and Mr. David Khoo, if you are reading this, please keep up the good work in your shareholder friendliness. There are just many public listed companies out there with extremely bad investor relations.

For the fellow investors, if the companies you are analyzing don't even wish to reply your emails or answer your questions through phone calls, please avoid investing no matter how good the financials are. They are just not shareholder-oriented and they think you are troublesome. In the long run, this kind of companies will only jeorpadize your interest by doing something like excessive remunerations?

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