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SLP produce good result. Hopefully TG too

Revenue 2Billion in year 2027. Cover page for the Annual Report

Thong Guan Industries Bhd (Fundamental BUY with TP 3.40)

• We are positive on Thong Guan Industries Bhd (TGUAN) for the expansion to its existing premium stretch film line for higher volume growth with value added products for margin expansion.
• Sitting on a robust balance sheet and hefty net cash position of RM147.4m, we recommend BUY with a target price of RM3.40 based on 14.5x FY21 PER, as per the 5-year average valuation of industry players.

• TGUAN is the world’s top 10 stretch film producer with production capacity of >150,000MT/annum. For FY20, over 90% of sales are underpinned by plastics products (stretch films - 45%, industrial bags - 16%, garbage bag - 16%, courier bag - 6%, PVC food wrap - 5%, compounding - 1%). TGUAN has built a strong presence in the export market (over 80% of revenue) and is the top garbage bag supplier to Japan conquering 12% of market share, testament to its stringent product quality control.

• The packaging industry in Malaysia has over the years undergone consolidation, especially within the plastic packaging industry (eg Scientex’s acquisition of Great Wall Plastic, Klang Hock Plastic, Daibochi Bhd). In effect, the elimination of competition has enabled TGUAN access to new clients where previously was not possible.
• To this extent, TGUAN have been striving to move up the value chain since 2016 coupled with the setting up of its own R&D centre. Its premium Nano stretch film which garners higher margin than the conventional film has been gaining good traction and the Group plan to add additional four lines progressively till year 2023, with potential additional revenue of RM80m-RM100m per line, representing ~10% of present revenue each line.
• Expansion plan is in the pipeline for the next 5 years, with an estimated yearly CAPEX of RM30m – RM40m. Next growth driver will lie on courier bags, which the Group is looking to double up capacity due to encouraging orders from U.S. giant e-commerce customers. Other expansion plans include additional 10 lines of premium blown film, 10 new lines of PVC food wrap, and new manufacturing facilities in Myanmar (targeting annual revenue contribution of ~RM150m).
• TGUAN operates based on cost-plus pricing strategy and is able to increase selling price in the case of rising resin prices, while the time lag effect in selling price adjustment could lead to near term margin expansion.
• Historically, the Group has been paying at an average dividend payout ratio of 25% since 2017, giving a projected yield of 2.4% in FY21.

Don't forget about the warrants dilution

After adjusting the share option expenses of 2.3m, PBT shall be 29.7m, not bad

During MCO also can achieve good result. Thumb up

good news from today AGM?

if not because of MCO, the results will even better.

Scientx just reported very good result. Manufacturing profit increased from 39m to 65m (Y-Y)

oil price down is good news for tguan. coz raw material cheaper now

Anybody has the post by Affin Hwang?

something brewing. up trend again with high volume althought indices down

Is Mr Ooi also recommend tguan now?

SCGM traded at PE~20 and P/BV~2, no revenue growth, debt company. If Tguan to use PE15, easily shoot up to rm6

Quarter report mentioned about courier bags numerous times. I think prospect for this business is very good.

3.90 rily? you have the CIMB link?

Scientx manufacturing profit has increased from 26.3m to 67.1m Y-Y basis. Hopefully TG will have impressive result too

If Mr Koon willing to invest little money only, let say 1million, the TA will become positive. Other retailers will surely follow to buy.

BUKIT MERTAJAM: A beneficiary of the ongoing US-China trade war, Chin Well Holdings Bhd will ramp up output of its industrial fastener products to 120,000 tonnes from 105,000 tonnes for the financial year ending June 30, 2020, to cater to rising demand.

Group executive director Tsai Chia-ling told StarBiz the ongoing US-China trade conflict created new business for the group.

“Wholesalers and distributors of steel hardware products in the United States have reduced sourcing from China due to the 25% duty that they have to pay for imported China products.

“Most of them have reduced sourcing from China by 30% to 70%. However, they won’t place all their orders with us as the preference is to source from a few manufacturers to ensure there is no disruption in the supply.

“This means they will still source from China and a few other suppliers in Asia that make fasteners according to the US standards and specifications. In the United States, the Imperial system-which measures in feet and inches is still in use.”

“Chinese companies are among the few in the world with the capacity to produce fasteners according to US standards and specifications,” she said.

Chin Well is able to tap into the opportunities of the trade war because it is capable of manufacturing fasteners that conform to standards and specifications required by the US customers.

“Therefore there is a need for us to raise production.

“Smaller competitors in the country and region that are unable to invest in the moulds to produce fasteners suitable for use in the US market will lose out,” she added.

She said the group was looking at exporting 20% of the targeted output to the US market in 2020.

“We also want the do-it-yourself (DIY) fasteners to contribute to 20% of group revenue in 2020 from about 10% currently.

“For example, we will be exporting at least 50 containers of DIY screws per month to the United States in 2020, compared to 30 previously,” she added.

Tsai said the group started the production of reinforcement bar connectors in Vietnam this year.

“These connectors could speed up construction work and are used for high-rise buildings. Wires are now used to tighten the rebars, which is not cost-effective.

“The fasteners are targeted at the South-East Asian markets,” she said.

For the 2020 financial year, Chin Well will increase its wire products exports to the Middle East, South Asia and Australia.

“There are potential customers that require wire products in the agriculture and infrastructure sectors,” she said.

The wire products are produced by Chin Herr, a wholly owned subsidiary of Chin Well.

For 2020, Chin Herr is targeting to produce 45,000 tonnes of wire products or 38% of the group’s total output.

On its RM12mil automated warehouse in Shah Alam, Tsai said the facility would operate in two to three months.

“The warehouse, with a built-up area of 25,479 sq ft and 12,920 storage areas, will generate long-term recurring rental income for the group.

“The facility provides one-stop warehousing services.

“Customers in the central region, for example, can use it to store their steel hardware products,” she said.

Meanwhile, according to the San Franciso-based Grand View research house, the global industrial fasteners market size, estimated at US$83.34bil in 2018, is anticipated to expand at a compounded annual growth rate (CAGR) of 4.1% over 2019-2025.

“The product demand in industrial machinery such as construction and mining is expected to expand at a CAGR of 4.4% from 2019 to 2025. “Performance of the machinery depends on the components that go into the construction of this equipment.

“As a result, the selection of the product is done on the basis of environmental conditions under which the machine is required to operate. The demand for the product in lawns and gardening equipment was valued at US$1.46bil in 2018 and is expected to witness a CAGR of 3.2% over the projected period,” according to the report.

Read more at https://www.thestar.com.my/business/business-news/2019/07/29/chin-well-gains-from-uschina-trade-war/

some more nett cash of 50sen/share after PPE investment. F&B also start make profit.

Maybe underwriting at RM 3.00 is a better idea.

Oldman use same tactic again. Remember what happen to Hengyuan and JAKs before? Time to sell! Do not let him cheat our hard earn money.

Financial report Item B1 mentioned that poh huat received RM 3.95 million other income from Qingdao divestment. Without this exceptional item and fire insurance, the profit actually not so encouraging

Petronm has carried out plant maintenance recently and result for next quarter will not be good either.

Any idea when is the next plant shutdown for petronm?

No worry, Kenanga and CIMB investment bank said can reach 5++.

Suspect poor result coming. Sell fast. Buy after result

Beware that the crack spread has dropped to 7+ from 10. Price can be adjusted fast.

Astino's inventory shall be steel sheet. During this period, the price shall go higher if not the same price. How come?

Any sifu here know what is diminution of inventory in accounting standard? Why there are substantial amount being write off for consequence two quanter result?

Mr Koon has emerged has major shareholder for Astino. Refer the annual report

Sometimes share market is not logic. One year ago share price 8, now 14, but yet profit drop. Broker still ask to buy.

thx for the link

How come the crack spread drop suddenly from 12.10 to 9.07. Anybody know how to read it?
https://www.quandl.com/data/CHRIS/CME_1NB1-Singapore-Mogas-92-Unleaded-Platts-Brent-Crack-Spread-Futures-Continuous-Contract-1-1NB1-Front-Month

FY18 EPS of 8.07 is too low. Why not used 10.8 (in canatonese) instead

Still put hope on the bonus issue? The boss had talked about the bonus issue more than a year ago but no action in place. Either empty promise or very poor execution. Better invest in Scientx. Today Scientx up again but see what happen to TG

Chong, i mean since the 1st nano machine being installed, no additional profit being generated. Do not expect too high for 2nd nono machine

Profit drop though so many machines have been installed. Based on enlarge share base of 184m, the adjusted PE already 16. No dividen declared also.

Base on mother share price of 12.80, the theoritical LR price shall be 12.80/10.99-1.00 = 0.165.
It is overvalue now at 0.21

Beside coldeye, icapital is also the 8th largest shareholder of the company

The article was published on 9 Nov but share price of CSC has jumped 10 sens from 1.98 to 2.08 on 8 Nov. Who is buying?

At first glance, the result looked good with dividen. But if you study in detail, the profit has dropped actually from 18m to 14m (Qtr to Qtr) after take away the FX and property gain.

SLP dropped from 3 to ~2.20 now after announcement of financial result. Will same thing happen to tguan?

Trade carefully ahead of result announcement. Price has capture good result announcement if any. But if bad or stagnant result being announced, it will cause panic drop.