New Toyo

Hi GG

If New Toyo can continue to keep up the good work with the current BAT contract, it will have a strong demonstration effect and pave the path for even stronger relationship in the future.

Other tobacco makers in Europe wanting to shift to a low cost base in the Asia Pacific Regions may ride on New Toyo and pass on printing jobs to New Toyo if they see that New Toyo can deliver quality packaging solutions to big players like BAT and Phillip Morris.

Well, it seems that Tien Wah has done it. They just need to continue to secure more businesses from as many tobacco makers as possible to diversify the risk of losing business from BAT.

If I am SAH, it is in my interest to keep delaying...
Its CEO still continues to get paid despite the fact that there is not much work to be done.

(26-04-2012, 10:40 AM)Stockerman Wrote: This is remaining cash balance of only net 17 cents and will continue to whittle down if company indulges in frivolous expenditures.

So buying at 17 cents also doesn’t make sense. There is no assurance that 17 cents will remain at 17 cents…

It is not like a General Offer where price certainty is assured.

(26-04-2012, 09:44 AM)potatolover Wrote: SAH just made the announcement on 25 April 2012.


Technically, SAH is only worth 17 cents after deducting the 1 cents for payment of dividend for FY2011.

---

Even after paring down all New Toyo's debt of 28mil, it is still about 6 cents left for distribution to shareholders.

(26-04-2012, 11:54 PM)greengiraffe Wrote: Hi,

Sounds pretty exciting. FYI, after they listed SAH in 2004, it took them 4 years to execute the buyout of BAT's oz operations and when machinery finally got installed, the benefits only started to flow from 2H 2011.

Now they are telling you that they are looking into Africa - strategically not wrong since that is probably the last ground that has yet to be explored. Moreover Africa is a big and dangerous region - I just hope that shareholders of N Toyo can finally see some $ from the realisation of wrong term investments (SAH) in terms of one off specials.

However, from your tone - it really sounded like, we will pay down the debt so that we can become a stronger company so that we can conquer new territories.

Hope that I am wrong as N Toyo is a service support company to global sin industry and not the sin industry itself.

(26-04-2012, 11:43 PM)Stockerman Wrote: The drop in Net profit for the Specialty Paper (SP) was due to the loss of business from 2 customers. This will be resolved from Q3 onwards with the new supply agreement from Phillip Morris. The company also explained that the cost of materials has come down. All these factors will help to restore the profitability of SP business.

Company also mentioned that there will be more short run jobs and the reserve capacity is mainly for this purpose.

For the sales proceeds from SAH, company said they also wished that SAH quickly returned the money asap so that they can consider the next move, i.e. strategic review to exploit new opportunities, etc.

Company is also looking beyond the Asia Pacific Region into the Africa continent to expand the Printed Carton and Labels (PCL) Business.

(26-04-2012, 11:21 PM)greengiraffe Wrote: Hi Stockerman,

Capacity can be freed up but how will they filled the freed capacity with jobs since the industry is oligopolistic.

Has there been any mentioned of what can be expected from SAH distribution (at least 50% and what will happen to the balance).

Any other meaningful updates that will drive the share price?

GG

(26-04-2012, 10:18 PM)Stockerman Wrote: Today at New Toyo's AGM, someone asked about the impact of Plain Packaging on the profitability. The general impression is that since less colours will be required, the cost of printing may drop. i.e. revenue will drop.

This may not seem to be the case.

Company explained that the profitability will increase. The jobs will be less complex and can be now be consolidated together for greater efficiency. It will be easier to meet the KIP set by BAT (completion of job within a certain time span). Ink costs are more or less fixed as these are sourced for New Toyo by BAT. As long as job is completed within the stipulated KPI timing, the same fee rate is paid.

So actually, transition to plain packaging printing jobs will free up capacity??

GG,

that's the difference between a family run company vs a company with a professionally appointed manager.

a professional CEO has its KPI spelt out for him, and remunerated accordingly. A professional CEO will not volunteer to KIV his pay package.

so I view the Yen family's move away from management a positive one.
Things will now happen faster, PLUS more accountable.

SAH is now history, after distribution , whether 50% ( 6c ) or 100% ( 12c ), is pure bonus to New Toyo.

Clean up and start on firmer and cleaner grounds.

I still maintain, base case, a special div of 5-6c is reasonable. maybe not a 1 time payment, but over 2 payments of 2.5-3c each time.

as long as New Toyo gets back cold hard cash from SAH. They still own 34% of be it an empty shell. whatever happens to this empty shell from now on can only be UP, no downside cos to New Toyo, its already empty.

If ever this empty shell becomes sexy, they will have 34% of a sexy windfall.

if this shell decides to pay 100%, then small windfall.

if SAH squanders away the remaining 50%, well, at least got rid of a spoilt kid and recouped some cash from the spoilt kid




[quote='greengiraffe' pid='23677' dateline='1335455686']
Hi,

Sounds pretty exciting. FYI, after they listed SAH in 2004, it took them 4 years to execute the buyout of BAT's oz operations and when machinery finally got installed, the benefits only started to flow from 2H 2011.

to be fair and more transparent to Shareholders and investors, company will have net off SAH's contribution to its financial performance.

The figures should somewhat look like these:-

1. EPS = 3.2 cents
2. EBITDA = 39 mil

P/E of 12 = 38.4 cents. (See basis below)
5 times EBITDA = 44.3 cents.

*********
http://pages.stern.nyu.edu/~adamodar/New...edata.html
(P/E of packaging companies is approx. 12 around the world)

Hi Stockerman,

thanks for the agm update.

were there any more interesting points brought up during the Q&A ?

The acting CEO was able to articulate his points clearly and this somewhat gives the reassurance that the leadership transition is in order.

The impression we got from the management was that they are proactively trying to diversify their existing clientele bases and are on the lookout for any good opportunities to secure more business from tobacco makers.

(27-04-2012, 10:12 AM)rexace Wrote: Hi Stockerman,

thanks for the agm update.

were there any more interesting points brought up during the Q&A ?

So far, Phillip Morris has agreed to give them a 2 + 1 year supply contract for the specialty paper.

If New Toyo can secure a long term contract with Phillip Morris similar to the one they secure from BAT, in terms of volume, it will be a super plus to their revenue and bottomline.

(27-04-2012, 10:20 AM)Stockerman Wrote: The acting CEO was able to articulate his points clearly and this somewhat gives the reassurance that the leadership transition is in order.

The impression we got from the management was that they are proactively trying to diversify their existing clientele bases and are on the lookout for any good opportunities to secure more business from tobacco makers.

(27-04-2012, 10:12 AM)rexace Wrote: Hi Stockerman,

thanks for the agm update.

were there any more interesting points brought up during the Q&A ?

Thanks Stockerman,

any feel of how willing they will be of sharing whatever they will eventually get from SAH ?

(27-04-2012, 10:20 AM)Stockerman Wrote: The acting CEO was able to articulate his points clearly and this somewhat gives the reassurance that the leadership transition is in order.

The impression we got from the management was that they are proactively trying to diversify their existing clientele bases and are on the lookout for any good opportunities to secure more business from tobacco makers.

(27-04-2012, 10:12 AM)rexace Wrote: Hi Stockerman,

thanks for the agm update.

were there any more interesting points brought up during the Q&A ?

The young Chairman was noncommittal, saying that company will need to assess the strategic opportunities and then decide thereafter.

The retired Chairman however seemed to understand the sentiments of shareholders. He said that now that he is retired, he will be standing on the same side as shareholders, wanting to get as much dividends payout as possible.

Well, perhaps father and son can settle it amongst themselves and give all of us shareholders a reasonable payout.

My prelim estimate is 5 to 6 cents, perhaps over 2 batches.

(27-04-2012, 10:25 AM)rexace Wrote: Thanks Stockerman,

any feel of how willing they will be of sharing whatever they will eventually get from SAH ?

Looks like the barometer in the market does not take all of these developments at AGM well...

perhaps people fear that BAT might not renew the supply contract for another 3 yrs when it ends in 2015?

After all, 55% of existing revenue is from ONE SINGLE client is a real risk..