Posted by coolinvestor > 2016-03-07 17:14 | Report Abuse

nice writeup!!!

Posted by soojinhou > 2016-03-07 17:20 | Report Abuse

Nice work. In 3Q15, Tguan suffered forex loss of RM2.97m. In the latest quarter, it is 714k. Who say they benefited from weak RM?

Posted by longkanginvestor > 2016-03-07 17:51 | Report Abuse

Excellent write up.manage to grab more from panic sellers today

Posted by newbie91 > 2016-03-07 18:51 | Report Abuse

But can't deny that the business will be lesser competitive if the ringgit strengthen. It also affect the revenue, usd weaken indicate higher volume need to sold to achieve the same revenue. Realised gain is just second effect. However, management aggressive expansion and refocus on fnb sector will allow them to get more profit in near future.

Posted by Ezra_Investor > 2016-03-07 19:30 | Report Abuse

Hi YiStock, it's been some time, how are you doing? Yes, agree with you.
Actually not all so called exporter benefits from USD appreciation.
Hevea, Tguan is such the case.
Mr. Market is a crazy guy.

Posted by Icon8888 > 2016-03-07 19:43 | Report Abuse

Hey guys, you all are driving me insane... How come my understanding is so different ?

According to my understanding, there are two components.

First component - profit margin. When Ringgit weakens, Thong Guan profit margin will increase as USD sales translate into higher revenue. Right ?

Second component - net USD liabilities. If the group usd liabilities higher than usd assets, weak ringgit is bad. If usd assets higher than usd liabilities, weak ringgit is good.

In thong guan's case, it's usd liabilities more than usd assets, so weak ringgit is BAD FOR SECOND COMPONENT.

However, being an exporter, weak ringgit is always GOOD FOR FIRST COMPONENT , right ?

As such, to say that thong guan does not benefit from weak ringgit (or string usd) is only 50% true, isn't it ?

Posted by PlsGiveBonus > 2016-03-07 19:44 | Report Abuse

Sell

Posted by stockmanmy > 2016-03-07 20:00 | Report Abuse

dont read so much into this forex thing.................

they are manufacturers, not speculators.



once money has been received, the money does not discriminate between forex gain or not.

Posted by kk123 > 2016-03-07 20:38 | Report Abuse

sell before too late.. take profit ..

Posted by value88 > 2016-03-07 21:36 | Report Abuse

Hi Icon8888, yes, your understanding is same as mine. In overall (including both components), Thong Guan is still beneficiary of weak RM.

Posted by newbie91 > 2016-03-07 21:39 | Report Abuse

Agreed with icon. Actually is mixture impact. Exciting way is that the management has refocus on food and beverage manufacturer which is higher ,synergy arising from packaging business. With such a cash rich co, with annual free cash flow of rm60 million minimum, by looking at the forecast of icon which I agreed. plastic business has reach a mature cycle. But f n b they are still baby. It just how deep they can dip.

Posted by paperplane2016 > 2016-03-07 21:41 | Report Abuse

Write a comment..byebye tguan! Myr abovd rm4 soon

Posted by PlsGiveBonus > 2016-03-07 23:22 | Report Abuse

There is plenty of big discounted exporter
but I don't like to pick company who has very small competitive advantage

Posted by stockmanmy > 2016-03-07 23:29 | Report Abuse

so why so many companies reported less profits for 4 Q compared to 3 Q?

it has less to do with currency movements than with raw materials issued to manufacturing.

Posted by stockmanmy > 2016-03-07 23:31 | Report Abuse

all these movements in share prices got more to do with market phenomenon ....than with changes in PL and changes in fundamentals.

Posted by stockmanmy > 2016-03-07 23:45 | Report Abuse

a lot of share movements got to do more with declining sales orders than with currency movements.


world growth is very slow.

Posted by stockmanmy > 2016-03-08 02:59 | Report Abuse

Share price movements are sometimes logical sometimes illogical one.

Posted by JT Yeo > 2016-03-08 06:20 | Report Abuse

Again IMO, value investors should not be looking at forex gain/loss at all.

Posted by riskabsorber > 2016-03-08 08:08 | Report Abuse

Nice article YiStock.
Hi Icon, Actually the example that Yistock using is almost similar with your understanding. Just he is using Trade receivables and trade payables (SOFP) as example and yours revenues (POL) or net USD liabilities.

Last quarter, most of the export counters reported loss in foreign exchange. In this matter, we can see that no really RM weakening/strengthening can make a difference. If the operation of the company is sound, then the exposure should be sensible.

Posted by stockmanmy > 2016-03-09 08:39 | Report Abuse

net exposures is one way to look at it.
natural hedges and managed hedges are another way to look at it.

in summary, the accountants have done their best to provide transparencies and to give a true and fair view.......


too many self educated and amateur analysts done too much to arrive at their own Core profit issues and mislead themselves.

Posted by zefftan > 2016-03-12 10:00 | Report Abuse

Learn a lot from this article, thanks for briefing