Mr Yi, the December 2014 bad debt was due to collapse of oil price. This explanation didn't come from me, it came from Thong Guan.
Thong Guan 's plastic packaging products are priced based on oil price (higher oil price higher selling price, and vice versa). My guess is that a customer placed order based on RM100 oil price, but when oil price crashed to RM60, it probably decided to default (and sourced from another supplier ?)
As for bad debts in Setpetmber 2015, I guesss it is a result of business expansion
They previously sold their garbage bags , etc to regular customers. But since the capex programme, their product range increased, and number of customers also increased (for example : Australia dn South Africa, if I remember correctly)
Due to clinching of new customers, inevitably there is some bad debts
Just my guess , based on bits and pieces of information gathered from public documents. Cannot guarantee correct
Icon8888, your guide on this is very much appreciated. Kindly provide the doc if you manage to find. This is a thorn i long wanted to pull out from my finger. thank you
In such a market and volatile USD, I think investors could shun export related counters. Nevertheless, TG could be a good bet, subject to valuations. Alot of the large cap stocks are turning cheap with the recent decline of the market
TGuan......on 1 .1 .2016 everybody's stock pick for the year. I remember opening the papers and read half of research houses put T Guan as their stock pick for 2016. ...so much so convinced me to put Tguan in my model portfolio for 2016, .....but it became the worse of the 5 stocks in the model portfolio...........hahaha.
I have no bot a single lot with real money...maybe I will buy a little.
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Icon8888
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Posted by Icon8888 > 2016-02-25 08:57 | Report Abuse
Mr Yi, the December 2014 bad debt was due to collapse of oil price. This explanation didn't come from me, it came from Thong Guan.
Thong Guan 's plastic packaging products are priced based on oil price (higher oil price higher selling price, and vice versa). My guess is that a customer placed order based on RM100 oil price, but when oil price crashed to RM60, it probably decided to default (and sourced from another supplier ?)