Posted by Jon Choivo > 2018-09-05 01:17 | Report Abuse

Pretty similar to my thesis, just written out better than i can haha.

Which fund are you with?

Posted by moneySIFU > 2018-09-05 01:40 | Report Abuse

Well done again, Chicken King.

Posted by VenFx > 2018-09-05 02:07 | Report Abuse

Chicken King 才是真 师傅。
值得我 像他 学习!

Posted by VenFx > 2018-09-05 02:07 | Report Abuse

谢谢您了 Chicken King sifu.

Posted by qqq3 > 2018-09-05 02:14 | Report Abuse

this is not an easy business...no point investing.

Posted by qqq3 > 2018-09-05 02:18 | Report Abuse

rights issue is more than likely

Posted by moneySIFU > 2018-09-05 02:26 | Report Abuse

I am also in the mid of writing an article from the point of view of accounting analysis over the past 5 years' financial performance & positions.

The Management had instead done remarkable good jobs in the past 5 years:

1. Able to maintain GP margin while growing revenue
2. Able to raise funds internally or elsewhere without asking money from shareholders in supporting the capacity growth
3. Debts equity ratio stable despite increase in borrowings
4. Ratio of Selling/Distribution/Admin expenses to Revenue remained consistent
5. Kelantan Bird flu outbreak vs CAB share price & financial performance (Mar ~ Jun 2017) (in replying the concern over the Sabah avian flu)

Another key area that I agreed most with Chicken King is the ending of latest Capex Cycle, of which started in 2016 after the JV of NH Foods Japan.

Posted by moneySIFU > 2018-09-05 02:42 | Report Abuse

If the company didn't ask for the right issue during the peak of capex cycle, why they need right issue now or soon since it is already at the tail end?

During the peak and as indicated in the Cashflow Statements of the Company, the Purchase of property, plant and equipment were as follows:
2017 - RM50,816,823
2018 - RM70,536,308

While in the latest QR, the capital commitment was RM30mil.
https://cdn1.i3investor.com/my/files/st88k/9385_LAYHONG/qr/2018-06-30/9385_LAYHONG_QR_2018-06-30_LHB-QR%20Q1-FYE2019_-854503929.pdf

Anyway, anything can happen in stock market, may be you will be right someday.

-----------------------------------
qqq3 rights issue is more than likely
05/09/2018 02:18

Posted by ramada > 2018-09-05 05:59 | Report Abuse

The best article series of the year, real sifu.

Posted by ramada > 2018-09-05 06:20 | Report Abuse

Malayan Flour Mills Bhd proposes rights issue due to expansion for its poultry business too, but they raise fund before they build more processing plants.

Now the new plants in Pulau Indah & Pasir Gudang for Layhong almost done. That's make sense to say that they won't raise fund via rights issue.

Posted by smalltimer > 2018-09-05 06:43 | Report Abuse

If converting warrant is in the money, there is no need for rights. Make sense...those frightening others insist on rights may hv interior motive

Posted by Goinvest88 > 2018-09-05 06:55 | Report Abuse

Out of this 30mil capital commitment only 18mil is contracted for. Furthermore, idle land has been disposed recently for 29mil for reducing of loan and working capital.

Posted by Ricky Yeo > 2018-09-05 07:24 | Report Abuse

My layman understanding is this entire thesis rest on the growth of LH's frozen food segment, which according to part 3, the underlying factor is margin expansion, which lies in the heart of pricing power in the name of brand. The end of the capex cycle assume the brand has been established, groundwork has been laid and there is no more outlay required to build to brand. So the future value comes from the moat of brand to protect Nutriplus from being outcompete by competitors.That is a big assumption. The assumption that brand has been build; the assumption that there is pricing power; the assumption that there is a product differentiation/brand loyalty needs to be investigated further.

Posted by Chicken King > 2018-09-05 07:26 | Report Abuse

That is true. It's all about the market's expectation and how much has already been priced-in into the share price. My view is: risk-reward is favorable.

Posted by Ricky Yeo > Sep 5, 2018 07:24 AM | Report Abuse

My layman understanding is this entire thesis rest on the growth of LH's frozen food segment, which according to part 3, the underlying factor is margin expansion, which lies in the heart of pricing power in the name of brand. The end of the capex cycle assume the brand has been established, groundwork has been laid and there is no more outlay required to build to brand. So the future value comes from the moat of brand to protect Nutriplus from being outcompete by competitors.That is a big assumption. The assumption that brand has been build; the assumption that there is pricing power; the assumption that there is a product differentiation/brand loyalty needs to be investigated further.

Posted by briantc14 > 2018-09-05 08:46 | Report Abuse

I think a lot ppl still not understand why trade receivables are increasing “terribly”. If you have time, u can write one more article to talk about this. I don’t concern on this and I knew that LH is a good paymaster.

Posted by ccc1 > 2018-09-05 10:32 | Report Abuse

tough business...must be a very competitive business...eggs controlled pricing...no pricing power, thin margin, high short term borrowings to revenue and to current assets suggest living dangerously, struggling every day, lives days to day.

looking at the charts, trade la....but invest? not suitable.

aiyoh, some more chicken business...can die any time, needs high risk premium for investors.

Posted by ccc1 > 2018-09-05 11:56 | Report Abuse

chickens are die...suddenly

Posted by Stock Kingdom > 2018-09-05 13:34 | Report Abuse

Very well observed & written, Chicken King, thank you for sharing.Truly appreciate.

Posted by TakeProfits > 2018-09-06 04:34 | Report Abuse

Hey chicken chikketty king...i don't agree with you. No one knows. Thanks for your explanation. Well,thats your opinion. There will be a rights issue for sure..I am sure..

Posted by TakeProfits > 2018-09-06 04:36 | Report Abuse

Agree with you ccc1..chicken.business is no easy to manage. I stay away this counter. Hard tough business..

Posted by TakeProfits > 2018-09-06 04:42 | Report Abuse

Chicken Coventry king. Thanks for your opinion. I will not invest in this company due to the difficulties of the chicken business. It's not easy. Margins low. I stay out buy will trade if price actions warrants a trading opportunity.

Posted by 一卖 就涨 > 2018-09-07 08:06 | Report Abuse

I heard my father said , boss daughter is driving Merz sports . This fxxking company build chicken farms everywhere near villager's houses. The fxxking chicken manure's odor is so disgusting and causing pollution. Their family member enjoy luxury life, and villagers suffering from the pollution.

Posted by EngineeringProfit > 2018-09-07 08:16 | Report Abuse

Buy on rumour.....(sell fast on news later..huh)

Posted by KLCI King > 2018-09-07 11:10 | Report Abuse

No disrespect to your father, strongly advise you to read Lay Hong annual reports to find out how many are closed house farms & how many are open concept farms. Then you will realise you are spreading fake news & untruthful rumour.

By the way, what's wrong for people live at good standard living?



一卖 就涨 I heard my father said , boss daughter is driving Merz sports . This fxxking company build chicken farms everywhere near villager's houses. The fxxking chicken manure's odor is so disgusting and causing pollution. Their family member enjoy luxury life, and villagers suffering from the pollution.
07/09/2018 08:06

Posted by qqq3 > 2018-09-07 11:15 | Report Abuse

my approach to stock market.....business sense comes first.

Posted by huggs1 > 2018-09-07 11:21 | Report Abuse

Must read!
https://klse.i3investor.com/blogs/smartinvestment/173263.jsp

Posted by moneySIFU > 2018-09-07 11:32 | Report Abuse

LAY HONG - Why The Directors Do Not Want Right Issue? (moneySIFU - Part 1)
https://klse.i3investor.com/blogs/moneymoney/173015.jsp

Posted by santocs > 2018-09-12 17:17 | Report Abuse

Hi briantc14, you own this counter too?