Target Invest - We Target, We Invest
(Target Invest) - Red Alert To All Investor!!! Come In and See !!!
Red Alert to all Investor, Trader and Punter of KLSE.
Today need to informed everyone of this champion stock of 2019, which is Johotin.
Johotin sound like a tin manufacturing company for you at first sight. While this is not entirely wrong, it is important to know that Johotin already diversified their core business into F&B manufacturing which focuses on dairy related products. Now, the revenue and profit generated from diary division had surpassed the one from tin manufacturing.
Taken out from the previous quarterly report, you can see that F&B contributed 75% on revenue, and around 67% on profit before tax. This is to note that contribution from the F&B division do not resemble a full capacity operation mode.
The very reason I am writing this is to tell about the potential of the investment in Mexico that will give Johotin the ultimate bottom line boost in the future revenue and profit.
Although this expansion is very big and crucial for Johotin, but it had been lacking of coverage from analyst, which is why I am here to do the noble job of informing all the investor, trader and punter alike to be on the look out for Johotin.
First of all, currently all the operation are processed in Malaysia, which means milk powder are sourced from overseas, tin plates locally, and sugar are purchased on Malaysian market price.
According to the local prices, 1kg of Sugar will cost RM 2.85 for coarse sugar, and RM 2.95 for fine granulated sugar. But most of you do not know that at the international level, sugar price is actually trading around RM 1.20 per kg. This means that manufacturer in Malaysia is paying more than double on the international price.
Sugar prices had been in a depressed mode, and is trading at the range of 13 cents for 1 pound, which is around RM 1.17 per kg (based on exchange rate USD 1 to RM 4.10)
If Johotin is to move it's production into Mexico, the raw material of Sugar will be greatly decrease, hence increasing operating profit. It makes good sense to set up factory in Mexico because Mexico is the top 10 (rank no.6) in sugarcane production, which will put sugar trading at competitive prices.
Question now - If Johotin sugar price input from the current RM 2.85 shrink down into RM 1.20 per kilogram, what is the positive impact in terms of operating profit.
To answer you this good question, I have to show you some projection which is done by professional analyst. This is taken from TAOnline research paper.
http://eas.taonline.com.my/research/Dco/CR_7167_171025.PDF
For every 5% increase in raw material cost within the F&B segment, Johotin net profit is expected to decline 34%.
So, if raw material decrease 5%, will net profit increase 34% ? I think probably not.
But, what if raw material decrease 57%, from RM 2.85 to become RM 1.20 per kilogram ? Will Johotin profit at least increase 50% ? I believe that this can be within the range of expectation.
As I had already outlined, not many analyst and investor noticed about Johotin coming future potential and earning power. At RM 1.20, I think Johotin is still very reasonably undervalued and much more potential to be unveiled in the future.
I had to be honest that I had held Johotin for more than 1 year, buying from RM 1.1x until 0.8x and is still buying and keeping, because I will definitely believe that Johotin will be the future Dutchlady in the making. Solid business, steady revenue and steady dividends.
My advice to you is to grab it before fund manager and unit trust start to add Johotin into their fund portfolio.
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Discussions
1 person likes this. Showing 34 of 34 comments
future Dlady? come on... i wont expect so much, let just focus on 3rd world country cheaper alternative milk product will do.
2019-01-25 01:25
In Mexico, there will be other competitors for Jtin which also buy sugars at cheap level price lah. Beware of too optimistic view of Jtin in Mexico lah. That's why market hvnot level up / revalue up Jtin target price.
Anyway, good write up.
2019-01-25 07:35
Condensed milk use 50% of sugar as the ingredient.. So sugar is very vital
2019-01-25 09:06
Management set factory elsewhere rather than in Malaysia sure got good reason. One of the best is because outplace sugar price is cheap cheap.. Malaysia expensive..
2019-01-25 09:07
what about the cost of transporting the goods back to Malaysia? Any import tax? Also does condensed milk subject to sugar tax?
2019-01-25 09:58
KPS later stage will sing song.. but now not the right time to sing ma
2019-01-25 10:28
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2019-01-25 22:06
Does share market gives you a second chance ? For this case, YES!
Author: targetinvest | Publish date: Fri, 27 Jul 2018, 10:09 AM
Hello everyone, it is me again after so long on promoting KPS.
Today I am still going to talk about KPS, yea KPS again. .
<-- At tat time kps is 1.98. Hahahaha
2019-01-26 01:38
rogers123 Posted by targetinvest > Jul 25, 2018 07:29 PM | Report Abuse
Rogers123.. u say 1.64 right?
Prepare ur 200k when didnt reach there <-- Does tat mean targetinvest will pay me 200k if kps felt to 1.64? I think i deserved to have 200k today right?
16/08/2018 20:53
X
rogers123 Targetinvest: Will u keep ur promise to pay me 200k?
16/08/2018 21:14
targetinvest Lol... i sudah game over in kps already. New one is johotin
17/08/2018 00:06
targetinvest My father told me invest in johotin and dun play kps anymore.. tats why ..
17/08/2018 00:06
targetinvest Johotin will boom very soon.. me and my father and aunt and grandfather will buy all the milk from johotin soon... hahahaha
17/08/2018 11:31
X
rogers123 Targetinvest: watever ur father told u. U need to pay me 200k for ur loss.
18/08/2018 14:41
2019-01-26 01:40
U lose till laosai in jaks ah? Hahha.. deswai i already tell u buy n invest johotin when it is 85 cent
2019-01-26 08:34
U tak mau listen now u rugi lo.. i know u still will tak mau listen.. but johotin is heading rm 1.30 then 1.40 next week already
2019-01-26 08:35
Targetinvest: Hahaha. U think i am so stupid to loss money in jaks? I can swear i not even loss 1 cent to jaks. Hahahah. I am accumulating the second chance stock since 1.18++ until now. Havent stopped. Hahaha wan join and bet with me?
2019-01-26 22:03
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This book is the result of the author's many years of experience and observation throughout his 26 years in the stockbroking industry. It was written for general public to learn to invest based on facts and not on fantasies or hearsay....
sapurakencana
i like your article but still concern foreign exchange loss if USD weak compare to Malaysia.
2019-01-25 00:51