Posted by Jon Choivo > 2018-09-02 19:05 | Report Abuse

This was pretty decent.

Posted by Flintstones > 2018-09-02 19:08 | Report Abuse

11 trillion sales? Are you sure?

Posted by ramada > 2018-09-02 19:08 | Report Abuse

The balance sheet looks bad. Everyone still hesitating to enter due to this issue. Hope you can enlighten us how the management can solve this issue. Thanks.

Posted by Jon Choivo > 2018-09-02 19:10 | Report Abuse

Its yen, he didn't convert. Somebody going to get scolding by boss d. Hahahahaha.

====
Flintstones 11 trillion sales? Are you sure?
02/09/2018 19:08

Posted by Chicken King > 2018-09-02 19:11 | Report Abuse

It's billion and I've made the correction. Thanks for pointing out!

Posted by Flintstones > Sep 2, 2018 07:08 PM | Report Abuse

11 trillion sales? Are you sure?

Posted by VenFx > 2018-09-02 19:12 | Report Abuse

Wah !
Real fast like PH goverment.
Like 1st.

Posted by VenFx > 2018-09-02 19:29 | Report Abuse

Otb sir and koon wont considere now, given the ugly look from its TA chart.
Arent good we bought before them meh ?

Posted by VenFx > 2018-09-02 19:37 | Report Abuse

OTB 7 Koon with most of us here are different league ma.
Dont forget in LayHong we dare to buy and patient is our price.

I'm sure OTB sir will joint us here, when it is time .

Posted by VenFx > 2018-09-02 19:41 | Report Abuse

After reading so much article from Chicken King,
I planing to buy straight 50% Big 50% Small using my allocated money.

Need not to wait till the Big drop till 0.480 lah.

Posted by Flintstones > 2018-09-02 19:46 | Report Abuse

Layhojg may not be i3 members cup of tea. Most members here trade quarter to quarter. I will be surprised layhong does not drop more from here

Posted by ramada > 2018-09-02 19:57 | Report Abuse

I can average down once only, using 20% of my capital. And the other 80%, is using to average up. Or hunt for other stock, if there's any.

Anyway, a pack of 300g nippon premium nutriplus fried chicken chop is selling at RM11.80, really high margin there.

Posted by chkhooju > 2018-09-02 20:27 | Report Abuse

For a falling stock, NEVER AVERAGE. Just STOP LOSS and move on.

Posted by VenFx > 2018-09-02 20:31 | Report Abuse

That depend lah ...
Counter with good Growth Prospect
U buy and hold can earn good annual ang pow
LayHong with it strengthening for a premium league
Will earn you a Growth machine lo.

Posted by Alex™ > 2018-09-02 20:39 | Report Abuse

aiyo, u see the debt....u see the cash flow....aiyo double face palm..

later rights issue incoming~

Posted by Alex™ > 2018-09-02 20:39 | Report Abuse

unless each egg naik 10 sen la~ but aunty uncle later complain hehe

Posted by Administrator > 2018-09-02 20:43 | Report Abuse

like first

Posted by Daily8 > 2018-09-02 21:19 | Report Abuse

Robot888, how to sell the chicken to get the eggs? Trade with who the chicken ?

Posted by VenFx > 2018-09-02 21:42 | Report Abuse

r18 , looks like we have common way of seeing thing now.

capex for growth plus alliance with strong leaqeue with Nippon Ham ...
i wont pay concern to the debt.

This take gut and second level of thinking as well .

Posted by ramada > 2018-09-02 22:03 | Report Abuse

It's not as bad as you think to raise fund via rights issue. Another poultry player, Malayan Flour also proposed rights issue of rculs and the share price has plunged 10%. Not too bad.

Posted by ramada > 2018-09-02 22:04 | Report Abuse

We all are panic to see Sapura Energy plunged recently due to rights issue. Its rights issue not 1:4 or 1:5 but as high as 5:3, so nobody wants to subscribe.

Posted by ramada > 2018-09-02 22:05 | Report Abuse

Anyway, if no wrong, Lay Hong never raise fund via rights issue.

Posted by VenFx > 2018-09-02 22:22 | Report Abuse

Sapura case ... sharks will tempted while share price
go below 0.310 -0.280

Posted by Fabien Extraordinaire > 2018-09-02 22:53 | Report Abuse

q-o-q might see improvement. but y-o-y is weaker.

unfortunately, market is short-term-ish.

Posted by VenFx > 2018-09-02 23:01 | Report Abuse

Better let the results tell naturally lah ...
whoever follow closely , will have time to tap the rise ma.

Posted by valuelurker > 2018-09-02 23:56 | Report Abuse

How do you derive the RM7-8mil for the frozen processed foods segment based on 'sensitivity analysis' in part 1 and 2

Posted by Chicken King > 2018-09-03 05:51 | Report Abuse

It is actually based on a few assumptions and from whatever information on segmental margins I could dig up from analyst reports.

This initiation report here from UOB has plenty of info:
https://research.uobkayhian.com/content_download.jsp?id=44935&h=5de467a7575b9538de41b90d8df790b7

The concept is simple - Lay Hong has 3 main segments: Eggs (24% revenue), Processed food (50% revenue), and Others (26% revenue). The "Others" segment generally contributes minimally to earnings, while processed food has stable margins from their pricing power. Therefore, the main swing factors are only "Egg" segment profits and feed cost movements.

Using the above information plus egg & feed price trends, I observe q-o-q fluctuations and estimate what were their impact to earnings after considering capacity expansions as well. There's a lot of calculation.

But after stripping out the volatile portion, the remaining "stable" portion is always roughly RM7-8 million per quarter.

I admit it might not be 100% accurate, in fact it might be far from actual contribution. So it's still an estimation. But the idea makes sense: There are only 2 segments contributing to profit. The segment with higher margins should contribute more to bottomline.

Thanks for asking. I wasn't sure I should include this explanation in the article because it might become too long-winded.

Posted by valuelurker > Sep 2, 2018 11:56 PM | Report Abuse

How do you derive the RM7-8mil for the frozen processed foods segment based on 'sensitivity analysis' in part 1 and 2

Posted by moneyfacetrader > 2018-09-03 13:23 | Report Abuse

good reading.

Posted by moneySIFU > 2018-09-03 17:18 | Report Abuse

Thank you for such good sharing, Chicken King.

To me, the insight analysis over the 3 articles from Chicken King made reasonable sense.

I have been monitoring Lay Hong for quite sometimes, even way back before QL gave up on their pursuit in taking over Lay Hong. But the valuation in terms of share price had stopped me from making any move.

Until late when I saw the rapid decrease in share price over just a month plus time, I asked myself, how can such a good company with such strong branded products suffered such huge drop in share price?

It seemed like a perfect storm, all bad news came at the same & short time. Anyway, perfect storm good for those not in yet.

Then I decided to go in with 2 questions:
What is upside potential?
What is downside risk?

Bearing any external factors, the answers were:
Upside = huge
Downside = limited

I started to buy at 60 cents all the way to 53 cents.

Since Chicken King has written the business & possible potential growth, I will share my findings on the financial cash flows & needs with hope to help ease on certain guesses about the company may go for right issues.

Posted by paperplane > 2018-09-03 17:39 | Report Abuse

Long time no see money sifu

Posted by moneySIFU > 2018-09-03 17:49 | Report Abuse

hi paperplane, good to see you again, hope you are fine & doing well in stock market.

Posted by VenFx > 2018-09-03 19:34 | Report Abuse

Cant wait any longer for moneySIFU's next article

Posted by Flintstones > 2018-09-03 19:39 | Report Abuse

Money sifu is back! Look forward to your articles.

Posted by value88 > 2018-09-03 21:42 | Report Abuse

LayHong has good potential but I think one must ready to hold till next year 2019 to see its fruits.
The new JV food processing plant will commence in Sept 2018 and it will take some times to setup and fine tune the machinery and processes. I suppose it will take months before the production can run smoothly and production output can contribute significantly to earnings.

Posted by supersaiyan3 > 2018-09-03 23:23 | Report Abuse

Well, well written!

But, whether LH has enough financial strength to accomplish is questionable. (Years ago i was wrong about QL, maybe i am wrong again.)

See the director sold more warrant, (i already told you the last shock) maybe another shock has just happened.

Yes, the feed price is getting lower and the egg prices etc is getting higher.

Posted by moneySIFU > 2018-09-04 12:11 | Report Abuse

It is always privileged to be linked to those good people, thank you, r18.

Posted by WealthWizard > 2018-09-04 16:44 | Report Abuse

@Chicken King, your works are brilliant & adorable, can we communicate through emails? Thank you.

Email: wealthwizard.invest@gmail.com

Posted by quinnkoh > 2018-09-04 21:26 | Report Abuse

im waiting part 4......

Posted by Chicken King > 2018-09-05 07:22 | Report Abuse

Hi WealthWizard. Love your work too! I've dropped you an email :)

Posted by WealthWizard > Sep 4, 2018 04:44 PM | Report Abuse

@Chicken King, your works are brilliant & adorable, can we communicate through emails? Thank you.

Email: wealthwizard.invest@gmail.com

Posted by moneySIFU > 2018-09-05 07:48 | Report Abuse

Thank you for your comment, r18, wish you doing good.

r18 aiyo, moneySIFU, I really admire of you. Which kind of person dare to buy in while others still in panic selling mode. Only the person who has far-sightedness and full of confidence can do this impossible job. Kudos! Kudos!
04/09/2018 18:29

Posted by valuelurker > 2018-09-27 11:46 | Report Abuse

The original question simply requires you to post up spreadsheet + chart of the 'egg prices and feed costs, considering capacity expansions as well' and exchange rates - saying 'there's a lot of calculation' wont quite do

After all, youve written four long posts, and the main selling proposition for LH is their NH/frozen food segment (which can be seen as a consumer-play)

UOBKH research report has no such information. Tracking only publicly available information (qtrly and AR), I dont see how you could 'backward calculate' the 7-8mil per quarter profit contributions (and I assume you mean PBT)


Chicken King It is actually based on a few assumptions and from whatever information on segmental margins I could dig up from analyst reports.

This initiation report here from UOB has plenty of info:
https://research.uobkayhian.com/content_download.jsp?id=44935&h=5d...

The concept is simple - Lay Hong has 3 main segments: Eggs (24% revenue), Processed food (50% revenue), and Others (26% revenue). The "Others" segment generally contributes minimally to earnings, while processed food has stable margins from their pricing power. Therefore, the main swing factors are only "Egg" segment profits and feed cost movements.

Using the above information plus egg & feed price trends, I observe q-o-q fluctuations and estimate what were their impact to earnings after considering capacity expansions as well. There's a lot of calculation.

But after stripping out the volatile portion, the remaining "stable" portion is always roughly RM7-8 million per quarter.

I admit it might not be 100% accurate, in fact it might be far from actual contribution. So it's still an estimation. But the idea makes sense: There are only 2 segments contributing to profit. The segment with higher margins should contribute more to bottomline.

Thanks for asking. I wasn't sure I should include this explanation in the article because it might become too long-winded.