The management like to give sweet and poison. Few days ago had announced good result. Yesterday again announced that will have to retrenchment and costs RM12.9 mil. The situation is similar with last financial year end period. Very good result and declared 14sen dividend but the next day said right issue. Really kind of manipulating our emotions.

Asset written off is unavoidable. TW has transferred old assets to Dubai's new plant.

Refers to the circular for shareholders during the right issue subscription. They had mentioned the rights will be allocated by the basis below.

1) to minimise the incidence of odd lots;

2) on a pro-rata basis and in board lot to our Entitled Shareholders who have applied for the Excess Rights Shares, calculated based on their respective shareholdings as at the Entitlement Date;

3) on a pro-rata basis and in board lot to our Entitled Shareholders who have applied for the Excess Rights Shares, calculated based on the quantum of their respective Excess Rights Shares applied for; and

4) on a pro-rata basis and in board lot to the renouncee(s)/transferee(s) (if applicable) who have applied for the Excess Rights Shares, calculated based on the quantum of their respective Excess Rights Shares applied for.

They have mentioned in advance on the basis to allocate to significant shareholders, then only to minority shareholders. They can even take up all 1mil unwanted shares from LTAT.

Good management, only subscribe additional 779,310 shares.

TW is given the opportunity for LTAT to sell the rest at higher price. Very smart they put the dividend ex date at end of September. Coincidentally, the renewal of contract should be around that period of time.

If the managing director has given the correct growth rate of not more than 20% in second half of 2016, then Tguan is in hot trouble.

As per 30/6/15, the profit was RM 11.7mil, let's say RM12 mil X 20% = RM14.4mil - RM13mil (in Q1'16), the current quarter's profit only RM1.4mil.

Unless the growth mentioned was for revenue, then will be RM334mil X 20% = RM400mil - RM180mil (in Q1'16), then current quarter's revenue will be RM220mil X 5% (marginal profit margin) = RM 11mil. Q1 & Q2 = RM24mil or 22sen.

Ezra_Investor “We are expecting a double-digit percentage growth of not more than 20% in orders in the second half of 2016,” - Datuk Ang Poon Chuan.

The hint is already given by MD himself.
04/08/2016 10:42

Not the time to buy yet. But the executive director can approach Mr Koon to buy over the balance of the shares (approximately 5.7%). Then it won't hit the open market so directly. Since Mr Koon already suffer a loss and he can average down the cost to acquire as well.

Profit before tax for the six months ended 30 June 2016 increased by RM7.2 million or 102.9% to
RM14.2 million as compared to the previous corresponding period of RM7.0 million. The improvement was mainly due to significant improvement in productivity and waste reduction as well as the absence of redundancy expense of RM7.1 million which was incurred in the previous corresponding period as a result of the restructuring of the production footprint within the Group to improve strategic positioning to service the customers and reduce operating costs over the longer term, lower amortization cost by RM 3.7 million and lower depreciation charge from the re-assessment of useful life of major PPE in Q3 2015. The aforesaid had effectively mitigated the adverse change in pricing of some products to a major customer.

The improvement was due to the absence of redundancy expense of RM7.1 mil as well as lower amortization cost by RM 3.7 mil = RM10.8 mil. If these costs were incurred, TW will make a operational loss by RM2mil. Luckily, this costs was avoided.

mjy88,

not really understand the logic. Can you explain it in layman term ?


mjy88 TGUAN drops because of ex-dividend date is 27th July. Those who want the dividend but do not wish to hold will sell within these few days
03/08/2016 22:21

Rights oversubscribed was due to rights price is RM1, someone just own 100 shares but subscribed for 100k rights. It happens.

LTAT should now left 2mil shares to be disposed off.

Comparing the quarterly result as at 30/6/15, net profit of RM7mil should be easily achieved. However, whether Tguan's coming quarterly result will be exceeded the previous quarterly profit of RM13mil is really unlikely. So, y-o-y should be ok, but q-o-q is challenging.

Very strange. When market are start fearful, Tguan was rising star. But when market start to catch up, Tguan is sinking.

TienWah's biggest customer is in hot trouble now. What would be the next for TW ?

it could be. If someone subscribe for excess and granted.

I've stated in the previous comment that all the assumption are just my wild guess. Try to imagine yourself as BAT's management / TienWah's BOD, you will know that the reason for constant share price falling since 3months ago.

Please read through the latest annual report, you will find out that few directors were from BAT. If you have former staff in your supplier's company, do you like it? Would you not angry that your staff "betray" you? LTAT just further suppress the price.

iamsoonoob, This is just my wild guess and apparently I'm not from the management. I would not know whether the contract will be renewed or not. Just want to highlight again, if the contract not renew, then the revenue for two years will be affected sharply.

Based on the share price trending, it must be revealed from internal parties such as higher management and staff regarding the BAT's contract. Just imagine yourselves, will BAT want to wait until last minutes only inform TienWah about the renewal of contract ? Even if BAT will, TienWah should be approached them earlier about the renewal rite ? The Vietnam's investment is still not mature yet, if Vietnam's government want to give the printing business to the JV, it will also by progressively and will not suddenly shifted all to them. Hence, BAT is still their only hope. Otherwise, will need to wait for more than 3 years.

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Members Representing Contributors

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Bluefun, Vietnam's revenue in 2015 was just peanuts compared to other countries. Assume that the Vietnam's JV generate 10/20 folds revenue, it is only 80mil maximum.

No worries. You may buy cheaper after dividend ex date which might be lower than 70 sen. After capital reduction of 75 sen, the market capitalization left RM133mil and holding cash 260mil is not possible. Full bullet to buy if lower than 70 sen.

Simple calculation if ex price is RM2.05, every 2 shares will be entitled 1 right issue at RM1.00 = RM2.05 X 2 + RM1 = RM5.10 / 3 = RM1.70

Still got time, since LTAT still have 4mil shares to dispose. This week not really active, don't think they disposed much.

LTAT's 10mil shares were taken up by us lo. Since last 3 months, they are disposing and the price has been adjusted from the highest RM3.26 to now RM2.30(before ex). Each trading day, LTAT contribute 90% of the volume. If based on the trend of disposal, they should be finish selling at the end of the month or latest early next month before Raya.

Hi Yistock, can you enlighten us the substance over form that you mentioned in your article? I still cannot get the logic that disposal of 50% stake to Vietnam's Gov will have impacted inter-segment. For example, Co A has making profit for 10 years and now want to dispose 50% of the profit to Co B. Why need to have such losses ? Should it be compensated by the proceed from disposal ?

The management might be foresee that LTAT kept disposing the shares. Hence, they delayed to announce the date of the right issue. The management would need to have strong justification/supporting to call for the right issue. If based on the current situation, very unlikely to have investors to subscribe the right issue even at RM1.00. TienWah has already take up the additional 5mil rights which indirectly tells the potential investors that they are at the high chance to get the renewal contract from BAT and Vietnam's JV will contribute positively.

Tguan's board is the conservative type of management. They will not simply issue private placement or other corporate exercise without serious thought. Besides, last year they just call for right issue. Someone who think that profit growth must have corporate exercise is wrong. Price will adjust but in long term still looks good.

Not logical for Mr Tham to acquire the price at RM2.60 and the share currently trading at RM1.6+, apparently he need to fork out additional RM126mil for this acquisition. As a businessman, if the share not worth more than RM2.60, he won't spend additional money on this. Besides, he can borrow additional money to buy over the valuable land in Penang and later on sell back to E&O at high price. (Experience from Founder of Tropicana).

http://www.thestar.com.my/business/business-news/2016/06/07/terry-thams-eo-play/

LTAT bought TIENWAH long time ago, the cost of investment for them is low. When they want to dispose off their stake, they still making profit. Besides, due to 3 uncertainties (date of right issues, BAT renewal contract, future prospect in Vietnam) that keep troubling TienWah's investors and potential investors. When LTAT keep disposing their shares is consider good sign for us to collect. Ensure that, in future won't have this kind of significant institutional investors who keep selling like no tomorrow.

LTAT is disposing through open market. The buyers are those genuine long term investors like us. However, dividend will ex tomorrow and this may be no more support to hold at RM2.30, if the support is lost, then will need to wait until the date for the right issues which likely will be end of this month.

From 26/05/16, LTAT will not disclose about the disposal. Based on the latest disclosure, LTAT should have only 4.8mil shares. I believe next month onward will be able to dispose everything. If in July/August announce good result. Then it will move upward again.

Based on wild guess, few reasons that why LTAT disposed the shares.
1) LTAT need to pay dividend to their fund holders
2) LTAT want to restructure the portfolios
3) LTAT want to use the proceed from disposal to take up the rights.

However, whatever the reasons behind, LTAT must be notified/informed before the bad news (BAT planned to move to Indonesia, Right issues). Otherwise, even 14 sen dividend declared also keep disposing.

Just finish reviewed this quarter result, few points would like to highlight
1) Net cash stands at RM 330 mil or RM1.48 per share, which also indicates that after the capital repayment will have 73 sen cash per share in hand.
2) Receivables to be collected RM98.3 mil or RM0.44 per share.
3) Total cash and receivables after capital repayment is RM1.17 per share.
4) Future prospect is to focus develop on its existing land banks to unlock value. The management believes certain property segment can still deliver market acceptance, based on the good locations in the City and affordable pricing strategy. To seize this opportunity, the
Group is targeting to launch the first phase of affordable home at Kota Kinabalu within next financial year. Meanwhile, the Group has planted 2,352 Ha and 50 Ha in Indonesia and Malaysia respectively. The Group continues to expand its oil palm planting area at Kalimantan Timur and Selatan, Indonesia with a target of achieving more than 10,000 planted Ha within next 3 years. With CPO trending upward due to extreme weather pattern, increasing demand from biodiesel initiatives and population increase, the long term prospect for this business is promising.
5) Property and plantation also under bright future prospect. Furthermore, with net cash RM1.17 cash in hand, can easily give another round of special dividend in this coming year end result.

Golden Land has been disposed the plantation land at proper time.

This quarter result will be excellent.

They won't able to give 15sen dividend this year.

Review based on the current quarterly result:-
1) Cash flow issue yet to resolve
2) China's investment has been incurred material forex losses
3) Profits mainly come from one-off gain which is disposal of non-controlling interest
4) Foresee another round of disposal of property, in order to repay the borrowing.
5) Borrowing USD 146mil, gauge the risk yourselves.

15% to 20%, the noodle related business will only contribute RM3mil to the revenue. Not really as significant as you thought of.

very unlikely they will able to maintain the profit compare to Q1'15.

Hi YiStock, Q1 2016 is expected better than Q1 2015. But, if compare with Q4 2015 ?

http://www.thesundaily.my/news/1804291

Apparently, Tien Wah's issue was the re-negotiation of extension with BAT. Current good performance of Tien Wah is driven by high profit margin on Printing on Tobacco Product. If they cannot get the extension agreement with BAT. 80% of their revenue will be slashed.

http://www.thestar.com.my/business/business-news/2016/05/16/tien-wah-to-diversify/

Based on the disposal period mentioned between 18 March 2016 to 11 April 2016, the price range is RM1.18~RM1.28. He said he is buying back now? Then what is the purpose of selling off to earn few sen ? Though his investment is huge, yet the methodology is wrong and does not make any sense.

On 23/02/16, wrote an article to encourage investor to buy in. Yet, he himself is selling big stake in the open market. This is so called philanthropist. I would like to call him "Hypocrite".

http://www.bursamalaysia.com/market/listed-companies/company-announcements/5084225

just wait another month when the quarterly result has to release before end of May. I think at that time should be announced the date of capital repayment, post disposal results on the balance of cash flow and the current status of property development with Mayor of Sabah.

Based on page 93 AAA, the key customer of TW announced that it will cease its manufacturing operations in Malaysia under an operations restructuring exercise and would be winding down its facility in stages and the process is targeted to be completed by Q2 2017. Basically, it will only start impacting TW in 2017.

In 2015, TienWah incurred RM6mil in redundancy expense which mean the management has already notice the contract with BAT going to expire.

margin is going to be shredded by the forex.