Nippecraft

1H (ended 30Jun15) result just out....
http://infopub.sgx.com/FileOpen/NL_Annou...eID=363819
Just based on the positive OP and PBT, can we say that we have the first early signs of a profit turnaround in the making for this long-suffered group, after the major business revamp and B/S clean-up which started in FY14 under the leadership of the current CEO Wiria Hartanto Muljono who was first appointed in Feb14?

More info on Nipprecraft from the latest FY14 (ended 31Dec14) AR....
http://infopub.sgx.com/FileOpen/NL_Annua...eID=343076

The last done share price at $0.032 remains way below the latest (30Jun15) NAV/share at $0.137 or even net cash/share at $0.074. The 3 limited life (12 to 27 years remaining land leases) industrial properties at 9 & 11 Fan Yoong Rd and 9 Kwong Min Rd in Jurong owned by Nippecraft should be worth quite a lot more than their combined written-down BV of $5.849m (as at 31Dec14) , thereby providing additional asset coverage and financial cushion when sold.

I would look carefully at the interested party transactions for this counter.

(07-08-2015, 03:25 PM)theasiareport Wrote: I would look carefully at the interested party transactions for this counter.

Hi theasiareport, I am learning so I'd like to ask what are the possible implications from a IPT perspective?

the business rationale for the transactions and if at arms length and so on

(07-08-2015, 01:06 PM)dydx Wrote: 1H (ended 30Jun15) result just out....
http://infopub.sgx.com/FileOpen/NL_Annou...eID=363819
Just based on the positive OP and PBT, can we say that we have the first early signs of a profit turnaround in the making for this long-suffered group, after the major business revamp and B/S clean-up which started in FY14 under the leadership of the current CEO Wiria Hartanto Muljono who was first appointed in Feb14?

More info on Nipprecraft from the latest FY14 (ended 31Dec14) AR....
http://infopub.sgx.com/FileOpen/NL_Annua...eID=343076

The last done share price at $0.032 remains way below the latest (30Jun15) NAV/share at $0.137 or even net cash/share at $0.074. The 3 limited life (12 to 27 years remaining land leases) industrial properties at 9 & 11 Fan Yoong Rd and 9 Kwong Min Rd in Jurong owned by Nippecraft should be worth quite a lot more than their combined written-down BV of $5.849m (as at 31Dec14) , thereby providing additional asset coverage and financial cushion when sold.

The properties you mentioned houses their Singapore manufacturing facilities which have been there for ages. If they were to sell the properties for profit, they would also need to look for another location to house their manufacturing facilities unless they wanna ceased the manufacturing in Singapore totally which I think is unlikely in the foreseeable future.

To be frank, this is a sunset industry. People are using tablets, nobody uses notepads anymore.

More organisations are going paperless, even Sg stat boards are also promoting paperless environment since years back. Nowadays when submitting corporate tax returns to IRAS, the IRAS do not want paper financial statements anymore. Scanned copy suffice. Just a background.

The Nippecraft mgmt. is aware of these. Unless they can radically change and adapt, they will go the way of dinosaur.

(10-08-2015, 04:48 PM)butcher Wrote: The properties you mentioned houses their Singapore manufacturing facilities which have been there for ages. If they were to sell the properties for profit, they would also need to look for another location to house their manufacturing facilities unless they wanna ceased the manufacturing in Singapore totally which I think is unlikely in the foreseeable future.

To be frank, this is a sunset industry. People are using tablets, nobody uses notepads anymore.

More organisations are going paperless, even Sg stat boards are also promoting paperless environment since years back. Nowadays when submitting corporate tax returns to IRAS, the IRAS do not want paper financial statements anymore. Scanned copy suffice. Just a background.

The Nippecraft mgmt. is aware of these. Unless they can radically change and adapt, they will go the way of dinosaur.

As the volume of Nippecraft's stationery business has fallen, and as this business is increasingly being supported by out-sourcing to tap lower costs available outside SG, I doubt very much there is still a need to keep all the 3 factories.

While the electronic gadgets have hurt Nippecraft's stationery business volume, we should bear in mind that this business comprises a very wide product range - Folios, Organisers, Planners, Journal, Calendars, Diaries, Notebook - and full details are available from below weblink...
http://www.nippecraft.com.sg/index.php?o...&Itemid=55
Overall, in last FY14 there was still volume in this business to bring in a total revenue of $41.0m.

To survie, Nippecraft has diversified into trading of and sourcing for waste paper and pulp for sale to mostly group affiliates based in Indonesia, and this business has been growing quite nicely in the last 2 years on a profitable basis.

Hi dydx, I think the best way is to ask them whether they contemplate the cessation of the Singapore manufacturing operations. However, I opined that's not the management views. If I am not wrong, they started an exercise to restructure their manufacturing and costing efforts which should involves the whole IT systems the organization is using. To be frank, all these comes too little too late. There are structural changes to the industry it is in. Unless more radical improvements made, very difficult for it to turnaround.

Also, to survive, the Indonesian controlling shareholders diverted some of their pulp and paper trading business to nippecraft. This is very thin margin business but comes handy to nuppecraft for survival sake. Existing and prospective investors may scrutinise the related parties transactions.

To be frank, there are better investment opportunities especially given the current market sell down. More value plays appearing

The controlling shareholder of Nipper holds 64% of the company and almost the entire revenue of Nipper is from the controlling shareholder's affiliated companies. Whatever written below is my own conspiracy theory and speculation.

Nipper will be a provider to these companies for their stationery and sourcing of waste paper etc. As it is merely a feeder company, Nipper will only make small profit otherwise mostly losses. When it needs to exit SGX's watch list, Nipper' controlling shareholder just needs to increase the price it pays to Nipper through the affiliated companies for Nipper to "get out of jail".

So what can minority shareholders do to break this conspiracy? Mount a takeover; but Nipper's controlling shareholder controls 64%. To read more about IPT, i strongly suggest reading the kingboard thread, as D.O.G has written a good explanation of the issue

Nippecraft has been trading below cash per share for a long time. But cash has been dwindling. As cited by previous comments, the company has a large amount of revenue from IPT as like Kingboard Copper. However, there is a possible catalyst incoming. The company's watchlist extension ends on 4 March 2017. It does not seem like the company is looking to for sponsor (to downgrade to Catalist) nor will be able to turn a meager profit in the last quarter. There has also been a number of changes to committee and management. So I'm not sure what kind of scenarios will go down here other than it getting forced to privatize or acquire a new business. Any thoughts here?

No thoughts. Hope this dodgy company will rest in peace.