I owned Scientex since 2012 and I can tell you nothing is guaranteed in this world, including Scientex. That part of 'no need to think no need analyse no need work hard' is nonsense.
Scientex's CEO buy shares almost every year therefore him buying in October tells you little about what next qtr is going to be. But one thing for sure is he and his bro have 'skin in the game' because most of their fortune sits in Scientex.
If you're a long-term investor, your return for any stock will be very similar to the business return on capital. What is Scientex historical ROC? Around 13-15%. So that is what you'll expect. Sure, if you own 2012, your return will be close to 1,000% but expecting you'll make that same amount of gain for the next 10 years will be unrealistic. Because that simply mean you think Scientex will grow from $6+ bil market cap to $30-60 bil market cap by 2030.
@Ricky Yeo yes everything we need to study a lot before make decision, like what you did in glove counter. Appreciate for your valuable opinions, nobody knows the future, but we only can predict it will go go or bad from the previous history record. Like glove counter now the big 4 is support by a very good fundamental, which is same as Scientx too, have great potential in the future. Actually I feel very impress while the market is in chaos red but here investor is calm and no panic . That’s what a real investor should be, believe themselves and their choices, because they did a lot hard work before investing a stock.
I would say the similarity between Scientex and glove stocks are both are very low margin business. Scientex's property division has good margin, but plastic division is a very low margin biz. Margin slightly improved when they move up the value chain from stretched film to consumer food packaging over the past 5 years. So survival in this business is to run the business as efficient as possible, and something I think Scientex is really good at. And also another reason I think them applying this mindset to their property division allow them to sell affordable housing while still making a really good margin.
Which is also another reason Scientex can make so much acquisition while keeping their debts under control because they make sure all of the companies they acquire produce the synergy they expected and apply the same level of efficiency allow them to immediately produce a lot of free cash flow to pair down their debt and make more acquisition, something that other plastic manufacturers haven't been able to do.
So Lim Peng Jin's brilliance lies in his management skills in controlling cost and running Scientex as efficient as possible. Without him, I would think Scientex will just be another average company. There's not many advantage selling plastics. Just like there's not many advantage selling gloves. IT comes down to controlling cost. And I think Harta is the best at doing that.
Now in the glove biz, it is happy hour, high ASPs due to high demands and tight supply. But watch when all the additional supplies come online, and a sudden squeeze on ASP either from oversupply or soft demand, most newbies in the glove industry like Mahsing will get destroyed.
Scientx is good thanks to their great CEO & management team. Their plastic business now include almost every sector ( car interior and seat, household pipe and wood wrapping, transport container for sand or water, solar system material etc. ) Some product is directly related to their property business, which can further drop their cost in properties.
The demand of plastic wrapping product is increasing during these covid period, while the industrial plastic product for properties is increased while using it to build affortable house themselves, so the revenue should be increased while covid epidemic and Scientx keep building the affortable house.
In this MCO period, the cost of material even drop further. So we can expect higher profit margin for all of these affortable houses, and the higher sales of plastic product at least in the next 3 years. I predict the profit margin is the shining star in their next QR.
Outside the glove and vaccine stock keep turn red and green... their retailer are so panic, sell and buy, just stay calm here, we will be fine . Here is all serious investor XD
Should be nice QR because plastic product and wrapping is immune to Covid, and low price affordable house with low bank interest should have their own market.
Don’t worry, this is a good company, great fundamental with Japanese culture CEO and professional management team. It will shine in bursa soon. Blind confident to Japanese economic power and working culture. That how they can use 1-2 years rise up after world war 2.
The CEO already keep his promise in 2015, double the revenue in 5 years. He made it. I will be here watching him to make his another promise , triple the revenue 2020 in 2028. Salute to you boss.
This book is the result of the author's many years of experience and observation throughout his 26 years in the stockbroking industry. It was written for general public to learn to invest based on facts and not on fantasies or hearsay....
Ricky Yeo
1,637 posts
Posted by Ricky Yeo > 2020-10-28 15:15 | Report Abuse
I owned Scientex since 2012 and I can tell you nothing is guaranteed in this world, including Scientex. That part of 'no need to think no need analyse no need work hard' is nonsense.
Scientex's CEO buy shares almost every year therefore him buying in October tells you little about what next qtr is going to be. But one thing for sure is he and his bro have 'skin in the game' because most of their fortune sits in Scientex.
If you're a long-term investor, your return for any stock will be very similar to the business return on capital. What is Scientex historical ROC? Around 13-15%. So that is what you'll expect. Sure, if you own 2012, your return will be close to 1,000% but expecting you'll make that same amount of gain for the next 10 years will be unrealistic. Because that simply mean you think Scientex will grow from $6+ bil market cap to $30-60 bil market cap by 2030.