There should be more than 60 million shares traded since 28 February 2018. Who are buying? I thought there'll be only more actions after Raya, haha :P

While I am not privy to the information whether Tomypak's Q1 FY18 is bad/good or not, I do not think the late release of the result related to the bad performance. Instead, I'd see it as a move to save costs to have the board meeting (to approve the quarterly result and AGM on the same day.

It's understood that the company's AGM is to be held on this Friday (1 June), it's not only the time for shareholders to meet the directors' once a year, it is probably also a time for the directors to meet to have their board meeting and to approve some of the board agenda at the day of AGM (usually in the afternoon after the AGM).

As directors do not meet everyday, probably they only meet few times a year (usually 4 to 5 times), and many directors are not staying at the same city, especially independent directors of non-KL based PLCs are from other cities. In the case of Tomypak, one of its ED Tan, the Tan Sri Chairman, the largest shareholder & non-independent director Yoong, they are from KL.

If you have checked the date of the Q1 results for the past 3 years, you will realise all the date of announcement for Q1 results were released on the same day with the AGMs. However, for this year, the AGM day is set on 1 June, which is a day after the last date (31 May) for December year end companies to release their Q1 result, so this could be the first time for the company to release its first quarterly result before its AGM. Probably the directors may need come to Senai a day earlier to have their board meeting to approve the announcement of Q1 results, then only to attend the AGM at the next day.

This indeed is a good practice. First, the board is not rushing to end the AGM in order to attend another board meeting on the same day, so that shareholders would be given more time to discuss with the board on the company's matters. Second, every shareholders are given fair chance to acquire shares with the release of quarterly results before the AGM. As I noted the company shares price tend to move higher on the day of the AGM, probably because shareholders who attended the AGM in the morning got hints or indications from the board or management on the Q1 results and they bought the shares ahead before the Q1 results approved and released later in the evening.

"W16Y --> Last Quarter Result, Error done by previous CFO , Liew. In fact, no losses. Liew tender resignation & left Tomypak. New CFO being hired."

I don't think Liew resigned because of error in the last quarter result. Moreover, Liew is the finance manager of Tomypak Flexible Packaging Sdn Bhd, not the finance manager of the listing entity Tomypak Holdings Berhad.

The last quarter result, i.e. 4th quarter 2017 was released on 28 February 2018 and Liew resigned on 28 February 2018. The presumption of Liew resigned because of error made in the last quarter result is not making sense.

Don't expect good news for the forth quarter 2017, I look forward to first quarter 2018. Tomypak ED had mentioned "Aims For At Least 20% Rise In Revenue This Year"

"Aims For At Least 20% Rise In Revenue This Year"...Looks like the utilisation rate for the first line is more than 50%, if the remaining 50% is fully utilised, then another 20% growth would be add-on. How about the second line to be installed in the second quarter? I hope this would add-on another 40% growth upon the full utilisation of the second line, then in total there's 80% growth, haha :P

https://asia.nikkei.com/Markets/Nikkei-Markets/Malaysia-s-Tomypak-Aims-For-At-Least-20-Rise-In-Revenue-This-Year-Executive-Director

Malaysia's Tomypak Aims For At Least 20% Rise In Revenue This Year-Executive Director
By Chong Sin Hao
Nikkei Markets
KUALA LUMPUR (Feb 05) -- Malaysian food packaging firm Tomypak Holdings is aiming to grow its revenue by at least 20% this year on the back of capacity expansion although a stronger ringgit weighs on profit margin, its executive director said.

The company's new production lines are expected to start operations this year and handle additional volume of 6,000 tons on top of the current capacity 19,000 tons, Tan See Yin told Nikkei Markets. Tomypak may invest over 20 million ringgit to add capacity this year, he said.

"We are in talks to get more contract from an existing Japanese client, who is aggressively expanding overseas and require more packaging supply for their products," Tan said.

Tomypak's expansion drive comes amid a rise in demand for fresh foods and higher consumption of processed food across the world. The company gets about 90% of its revenue from the food and beverage sector.

Global advanced packaging market is expected to exceed $31 billion by 2019, growing at a compounded annual growth rate of 8%, according to research firm Technavio.

"We are still considering whether to invest in gravure or flexo machines depending on our clients; needs," Tan said. A gravure line could cost more than 20 million ringgit, while a flexo machine will cost about 10 million ringgit, he said.

Profit margin at Tomypak, which gets more than half of its revenue from exports, could face a squeeze if the ringgit continues to strengthen, Tan said.

"We are not fully naturally hedged," he said. "Still, we are trying to reduce our input cost to mitigate negative impact from a stronger ringgit."

In its most recent quarter, net profit declined 11% from a year earlier to 3.10 million ringgit although revenue grew 2.2% to 52.68 million ringgit. For its first nine months, net profit rose 11% to 13.43 million ringgit, while revenue slipped 0.5% to 158.91 million ringgit from the same period last year.

Shares of Tomypak, which have gained nearly 57% over the past 12 months, were trading 0.5% lower at 0.995 ringgit apiece.

I have read through the latest 3rd q report, so not surprise on the result. I mentioned before that not to put much expectation on 3rd or even 4th q of FY 2017.

Reason being the old plant is/was going through realignment of its machinery, as stated in the annual report 2016. The realignment would be completed by year end 2017. While I’m not an mechanic expert or insider of Tomypak, I’m not sure how much time would it take to complete the realignment of the machinery in old plant, be it 1 week, 1 month or 1 quarter. The only indication from the management is that the realignment is expected to be completed by end of the year 2017, so worst case I assume by end of December 2017 then only completing the realignment.

During the realignment, there would be very likely a disruption on the old plant’s operation, hence the old plant production for existing order would be transferred to the new plant. I believe we’d only be able to see revenue growth after the completion of the realignment which would likely to happen earliest on the 4th q 2017 or even later on 1st q of 2018.

Second possible reason would be the additional capacity to be taken up by the largest client, i.e. Nestle which only has its third new global procurement centre commencing its operation on 3rd week of November 2017. I believe Tomypak’s revenue should move in tandem with the new order from Nestle amid the operation of its new globabl procurement centre in KL. Looking at other plastic packaging companies which have their financial results encountering a setback in the past few quarters due to challenging environment, I believe Tomypak is not doing too bad as its future prospect remain in tact.

By excluding one off expenses such as maintenance cost for the realignment, increase in depreciation (assuming depreciation only incurs in tandem with new sales), additional cylinder costs due to the adoption of new MFRS standard, these would render the 3rd quarter PBT to be RM5 million, which would be close to the 2nd quarter PBT. As reported in the quarter report, the management is still “optimistic that the Group’s overall performance going forward will be further improved”. I cross my finger that an increase of sales will be on its way soon, be it the 4th q 2017 or 1st q 2018. This is truly a long term investment, we need to be patience like an entrepreneur who is taking time to nurture his business and hope to reap a good profit in the long run.

Expected, new plant will start to contribute more in 3rd quarter of 2017

Even though the new capacity of Tompak was fully taken up, I'm not sure if this happened in 2nd quarter or 3rd quarter. To be prudent, better this only happened in 3rd quarter.

Also after reading through the quarterly reports of several plastic packaging peers, their latest quarter results were in negative growth as compared to the previous quarter or the corresponding quarter in the previous year, such as Daibochi, BP Plastic, Thong Guan, SLP, etc. Even Eddie's holding in Johore Tin also recorded lower profit. All these probably due to the rising of material costs so their margin was squeeze. Tomypak may face the same factor.

So my guess is that don't put much hope at 2nd quarter, look at 3rd quarter which I hope Tomypak should deliver at least PAT RM8 million after taking into consideration of 30% growth in capacity along with reinvestment tax allowance. By then, the target price for the end of year 2017 should be RM1.30, assuming there is no bear correction in the stock market.

https://asia.nikkei.com/print/article/285825

INTERVIEW: Tomypak Expects Sales Growth To Keep Pace With Capacity Expansion-Official

By Gho Chee Yuan and Chong Sin Hao
Nikkei Markets
KUALA LUMPUR (Aug 11) -- Malaysia's Tomypak Holdings expects sales growth to keep pace with capacity expansion as the flexible packaging materials maker plans to double its production capability in the next three years and forays into different packaging segments, its executive director said.

"We plan to double our capacity in the next three years to cater to rising demand," Tan See Yin told Nikkei Markets. The company is building a plant on 10.5 acres in the Senai Industrial Estate in the southern state of Johor, which will have an estimated production capacity of about 16,000 tons a year.

The first phase of the plant, which will add 6,000 tons in capacity, has started operation in the second quarter this year. "The additional capacity has been fully taken up by existing and new customers," said Tan, noting that changing consumer lifestyle has boosted demand for packed foods and beverages.

"The growth prospects of packaging companies, especially in the Asia Pacific region, are expected to be high," he added.

The second phase, with similar capacity as the first, is slated to commence operation by the first quarter of 2018, Tan said. "The products being produced can be used to pack sauces, seasonings, noodles, beverages, oils as well as snacks," he added.

With additional capacity in place, Tomypak intends to expand into other food and beverage packaging segments in which the company currently has no presence. "There are more segment for us to explore. We only have presence in the food and beverage packages segment, we have yet to be involved in rice and bread packaging," he added.

Currently, Tomypak's 19,000 tons a-year plant in Tampoi in Johor, runs at 60%-to-70% of its capacity. The company got about 90% of its revenue from the food and beverage sector.

Tomypak's aggressive expansion comes amid a rise in consumer awareness, increasing demand for fresh foods, and higher consumption of processed food across the world. According to research firm Technavio, global advanced packaging market is expected to exceed $31 billion by 2019, growing at a compounded annual growth rate of 8%.

Despite higher capital spending, the company will continue to pay more than 40% of its net profit as dividend to shareholders, Tan said.

On foreign exchange risk, Tan said the company adopts a "natural hedge" to mitigate risk. "About 60%-to-70% of raw material cost are U.S. dollar denominated," and any swing in the foreign exchange rate is adjusted by export pricing, which is also in dollar terms, he said.

"We expect raw material cost to remain stable for the remaining of the year, and with the new machines coming in, our margin could improve gradually," he added.

About 52.9% of Tomypak's revenue come from exports.