Posted by chl1989 > 2019-09-19 15:24 | Report Abuse

warrant expiring next month. it might dive a bit i guess?

Posted by GLNT > 2019-09-19 18:19 | Report Abuse

Why will it dip in the first place?

Posted by Icon8888 > 2019-09-19 18:30 | Report Abuse

I bought at 250

Undervalued

Posted by yfchong > 2019-09-19 19:50 | Report Abuse

Bro 8888. What do you think abt LA conversion how much impact... Thank

Posted by Icon8888 > 2019-09-19 20:21 | Report Abuse

Even if Factored in

Still cheap

Posted by GLNT > 2019-09-19 21:56 | Report Abuse

yfchong, Most warrants and LA were converted and last trading date for these is just days away. There will be almost zilch dilution from now onwards. Dilution story is way behind us now.

Posted by cheoky > 2019-09-19 23:24 | Report Abuse

Icon ada. Lu jgn bimbang.

Posted by Ncm88 > 2019-09-20 05:58 | Report Abuse

LLDPE price from July till September stayed below 8000. Definitely a good QR coming. However due to recent attack on Saudi refinery may cause slight supply glut that may push back up the price. Continue monitor

Posted by Icon8888 > 2019-09-20 06:00 | Report Abuse

Thong guan earning independent of raw material price

Cost pass through

But there will be lag effect

Posted by Ncm88 > 2019-09-20 07:56 | Report Abuse

Cant break 3.00 due to warrant. Wait for expiry soon

Posted by GLNT > 2019-09-20 10:10 | Report Abuse

Warrants:
Last Date & Time for Trading : 23/09/2019 05:00 PM
Date & Time of Suspension : 24/09/2019 09:00 AM
Last Date & Time for Transfer into Depositor's CDS a/c : 02/10/2019 04:30 PM
Date & Time of Expiry : 09/10/2019 05:00 PM
Date & Time of Delisting : 10/10/2019 09:00 AM

Posted by GLNT > 2019-09-20 14:38 | Report Abuse

Please sell down. Thanks!

Posted by Icon8888 > 2019-09-25 09:12 | Report Abuse

Finally moving

Huat ah

Posted by GLNT > 2019-09-25 09:18 | Report Abuse

Don't go up so fast lah...

Posted by sharegain > 2019-09-26 13:40 | Report Abuse

Scientx manufacturing profit has increased from 26.3m to 67.1m Y-Y basis. Hopefully TG will have impressive result too

Posted by Icon8888 > 2019-09-26 14:44 | Report Abuse

Fair value RM4

Still Long way to go

Posted by Sean888 > 2019-09-26 14:45 | Report Abuse

For manufacturing segment, profit margin of scientx up from 5.6% to 10.6% q-q...thanks to low cost material

Posted by Fabien "The Efficient Capital Allocater" > 2019-09-26 14:48 | Report Abuse

Posted by Icon8888 > Sep 26, 2019 2:44 PM | Report Abuse

Fair value RM4

Still Long way to go


Mine is about RM5. Trust me, its not a number randomly pick from the sky.

i can afford to wait for market to close the gap.

Posted by VincentTang > 2019-09-26 15:02 | Report Abuse

OTB buy call TGuan. Sapu...

Posted by GLNT > 2019-09-26 15:04 | Report Abuse

KYY don’t come in...no....

Posted by Icon8888 > 2019-09-26 15:05 | Report Abuse

Oh ya OTB called Buy

Posted by chankp7010 > 2019-09-26 15:23 | Report Abuse

May I allow to ask VincentTang where to get OTB 's report call to buy TGuan! Thank you. I would like to read this article.

Posted by akupolitikkk > 2019-09-26 15:28 | Report Abuse

TP 4 (6 month-9 month)

Posted by GLNT > 2019-09-26 16:42 | Report Abuse

With earnings resuming back to RM50-55mil, share price should head back to historical levels of RM4

Posted by Fabien "The Efficient Capital Allocater" > 2019-09-26 17:03 | Report Abuse

very much undervalued.

it remains a pipe dream for the company to hit 1billion market cap

Posted by PotentialGhost > 2019-09-26 17:32 | Report Abuse

Uptrending now , 200 day msi RSi??????TA ??? 400 msi day?

Posted by johotin88 > 2019-09-26 18:05 | Report Abuse

Looks good! I want to buy some tomorrow.

Posted by Victory99 > 2019-09-27 07:34 | Report Abuse

Add more....

Posted by Rex Ang > 2019-09-27 09:39 | Report Abuse

masih murah..pe8.9

Posted by George Leong > 2019-09-27 10:31 | Report Abuse

Its NTA is rm3.28, it should be trading at least at that level, still undervalued.

Posted by 林俊松 > 2019-09-27 10:35 | Report Abuse

Ok, sailang at RM2.77 today.

Posted by akupolitikkk > 2019-09-27 15:41 | Report Abuse

if nx qr eps at least got 12, easily RM3

Posted by EatCoconutCanWin > 2019-09-28 07:49 | Report Abuse

Aizai..I am here liao

Posted by gladiator > 2019-09-28 11:23 | Report Abuse

Under value for some time already...hope tguan pay more dividend.

Posted by GLNT > 2019-10-04 09:54 | Report Abuse

Kenanga just upgraded Tguan to RM3.00 target price. Such laggard....

Posted by Ricky Yeo > 2019-10-04 10:40 | Report Abuse

Some observation: If you pay attention to the flexible film packaging (FFP) industry, you will realised the industry is undergoing a lot of consolidation. Amcor, one of largest plastic manufacturer based in Australia (rigid and flexible) acquire Bemis, a big player in US almost a year ago. At local front, Scientex has acquired 5-6 local companies over the past 7 years, the latest one being Daibochi.

Generally, when an industry is undergoing consolidation, it is mostly because it has become too cost inefficient, cost overrun for smaller size plastic companies. And of course the ROE is become really poor. And this is apparent looking at the profit margin of plastic players in Malaysia as well as other countries.

As players started to consolidate and hit scale economies, this is going to present problems for small players like Tguan. Tguan's profit margin could be under alot of pressure because bigger players can use their lower cost structure to squeeze smaller players.

And also keep in mind film packaging is 'commoditised'. Yes, one does need to meet certain food regulations but basically no one is going to say hey I prefer Tguan's film over Scientex's film. This is also one of the reason why Scientex is moving up the value chain, from manufacturing industrial stretch film to transition over to other films like food packaging, bread packaging, and metallic BBOP packaging used for candies because those carries a better margin.

Although Tguan is spending alot on expansion, but on an absolute scale, they're gradually becoming a smaller and smaller player as the market consolidate so that is going to be something you need to think about.

Posted by Fabien "The Efficient Capital Allocater" > 2019-10-04 11:50 | Report Abuse

Tguan is the survival of the fittest. as the industry consolidates, only the best, efficient and well-managed, will survive. due to its small size, tguan unable to expand as in Scientex through acquisitions , but there's potential for the company to achieve that scale.

Posted by EatCoconutCanWin > 2019-10-04 11:50 | Report Abuse

Buy in tp4.88

Posted by Ricky Yeo > 2019-10-04 12:22 | Report Abuse

I'm not quite sure why they can't do what Scientex has done. Scientex only has a market cap of $700 mil in 2012, and their packaging business is probably smaller than what Tguan is today. So it has more to do with intention and strategy, less to do with inability. And scale is relative.

Posted by Ricky Yeo > 2019-10-04 12:59 | Report Abuse

And let's do a thought experiment, to forecast when will Tguan reach market cap of 1 billion. Current market cap is $450 mil, or 45% to $1 bil.

Historically, TG payout ratio is around 20-30% of total earnings, or reinvestment rate of 70-80%. And historically, return on capital has been around 9-12%, so one would expect the revenue growth rate to be 8-9%. Historical growth rate is much slower (5% +/- p.a), but net income has been a lot faster.

So if future ROC remains more or less the same, then you would expect TG to hit $1 bil market cap at around year 2028.

There was a news in 2016 (https://klse.i3investor.com/blogs/ss2020_TGuan/99307.jsp) where TG targets $1 billion market cap in 3-5 years time, or hitting that target between 2019-2021, which is unrealistic and nonsense.

And if one read the news carefully, the management explains "the market gives us a very low valuation". So he is pinning on the prospect that the market can ascribe a higher valuation aka higher P/E, then of course you can easily hit $1 bil, if suddenly the market gives you P/E of 15-20x instead of the current P/E 8x. That is why "Ang believes that a PER of 15 times for Thong Guan “is not asking too much”

Then the question comes back to why the hell is the market only giving TG 8x instead of 15x?

It goes back to the ROC of TG. Why would the market give a 15 PE when the ROC is around 9-11%? Given the logic that if Scientex's ROC is 14-15% with a PE with 13, why should market give the same PE to TG when their ROC is way lower?

So again, if TG wants to get to $1 bil before 2028 as I would estimate, lift their game, don't blame the market. Lift their ROC to increase growth rate, and market will start giving higher PE. Simple as that.

Posted by Fabien "The Efficient Capital Allocater" > 2019-10-04 13:16 | Report Abuse

yes agreed the management has been overly optimistic in the past. they should have learned from their past mistakes. the restaurant business has been a drag. i never understood the rationale for this venture.

whether market gives PE of 8x, 10x or 15x is beyond their control. they just need to focus in increasing their ROE and let the market do its work.

Posted by Ricky Yeo > 2019-10-04 13:29 | Report Abuse

Of course I can always be wrong, but I'm interest to find out why the fair value should be $4-5 (or market cap of 630-800 mil), or PE of 11-14x, and not what it is right now?

And for the 10 years record, TG's PE ratio has only exceeded 10x once, in 2014, to 13x, because their business took a dive. Otherwise, their PE has never gone into 11-14x territory, which again simply because their ROC has remain at the same level. Of course the market can suddenly get excited on TG and push their PE into 11x or more, but is that the game you want to play? Against the odds of 10 years track record?

If you're not going to 'gamble' on the odds that the market will suddenly get excited, being the probability is relatively small for that to happen, even smaller if you're a trader with short investment horizon, then the next thing you have to look at is TG's ROC. So what's the probability for TG to improve their ROC so market can give a higher PE? Higher growth? Growth is only good if it exceed opportunity cost.

Something to think about.

Posted by Fabien "The Efficient Capital Allocater" > 2019-10-04 13:38 | Report Abuse

if i can recall correctly, when they used to do margin of 6-8% their PE hovers around 9-10x

anyway, what is important is forward looking, management is continuously investing in R&D to improve its profit margin.

last 2 years, despite top line growth, bottom line was affected due to margin compression.

Posted by cheoky > 2019-10-04 17:05 | Report Abuse

Ah guan tolong makan tongkat Ali and Naik kuat kuat

Posted by yfchong > 2019-10-05 11:28 | Report Abuse

Tak tau lah. Ada orang goreng ke.?

Posted by yfchong > 2019-10-05 19:25 | Report Abuse

Resin price or demand growth in the picture..

Posted by Amit Khindriya > 2019-10-06 08:03 | Report Abuse

See you at 7

Posted by popo92 > 2019-10-06 09:55 | Report Abuse

Its so wrong to calculate fair value by merely using educational ROC or PE here. Scientex is well known of earning decent profit on its property business, even tough revenue of property sector only contribute around 20-30%, its can contribute 50-70% bottomline. Looking at how thin its profit margin on plastics manufacturing (below 10%), i argue Scientex expansion into higher value chain is bearing any fruits, for now. I am not criticising Scientex for over consolidate the FFP industry or diversify into property developer, nor blaming tguan for focusing their immutable business. In fact, tguan try few little steps which fail (organic noodles, opening healthy meal restaurants and etc) but their target to hit one billion market cap between 2019-2021 is not completely unrealistic and nonsense, in my opinion. They calculate in with their overall output of 220,000tonnes (basically in line with expectations) with overall market price predicted which can convert into 1.5billion revenue. But they fail to predict the compressed margin and market price for these products, which market cycle may reverse either way i do not know. But with recent polyethylene and polypropylene price depressing and local region flooded with new supply, plastics packaging industry should benefit theoretically. They are in position getting relief on compressed margins, while still expanding on capacity to snatch market on export earning stronger usd. Earning follow by?

Posted by Ricky Yeo > 2019-10-06 12:43 | Report Abuse

I'm not quite sure what you're trying to say here. What does $1.5 bil revenue estimate has anything to do with $1 bil market cap?

Again margin compression or not is not even the issue here. It is like saying gloves companies are affected by rubber price. Of course they're. The point is Tguan is going to find it hard to earn an abnormal return because they have little to no competitive advantage, which is why their ROC sits at around 10%. And I don't see that changing for the mid-long term, which means it will take another 10 years for them to hit $1 bil market cap.

Posted by Rodrod > 2019-10-06 14:39 | Report Abuse

So is a buy or not to buy?