Stamford Tyres

[potatolover]

Naamsa cuts SA vehicle exports estimate

The National Association of Automobile Manufacturers of SA (Naamsa) has lowered the vehicle exports projections for this year, as recession and debt crises in the eurozone cut the underlying demand for South African-produced vehicles.

SA is now expected to export 270,000 vehicles by the end of this year, down from the initial estimate of 300,000 units.

Europe constituted about 36% of the SA vehicle export market last year during which time 98,000 units were sold, according to Nico Vermeulen, director at Naamsa.

Despite the reduction in forecast, Vermeulen said export sales were expected to pick up modestly due to the Ford global compact vehicle export programme, while BMW's new 3 series export is ramped up.
SA vehicle exports - including Mercedes-Benz SA export sales data - dropped 11% to 17,656 last month compared with 19,828 in April last year, the third consecutive month of contraction. In March, export sales dropped 20.2% to 23,956 units compared with 30,026 a year earlier.
But in terms of the overall domestic vehicle sales, the growth trend last month was the highest so for this year. New vehicle sales rose 10.5% in April to 42,617, from 38,583 a year ago.
New passenger car sales lifted 12.1% to 29,517 units from 26,327 units a year ago. Year-to-date new passenger car sales remained 9.1% ahead of the corresponding four months of 2011.
Nedbank economic unit said in a note that sales growth was expected to hold up in the coming months, but rising inflation - which is eroding the boost from income growth and low interest rates - weak consumer confidence and the still weak labour market would keep passenger vehicle sales growth moderate.
Absa Capital's economics desk projects 4.3% growth for new vehicle sales by the end of the year.
"We expect the market to continue receiving support from the improvement in real disposable income as well as negative real new vehicle prices. Also supporting demand are debt-servicing costs, which have assisted in enhancing the total affordability of new cars," according to Standard Bank. "In the absence of major negative developments in the local economy and the current interest rate projection of flat rates through to 2013, we foresee modest vehicle sales growth for the remainder of this year."
Naamsa said the outlook for 2012 in terms of total industry sales remained one of modest growth.

[Stockerman]

Stamford tyres and YHI are in the same line of business....

Looks like operating environment is rather challenging....

********
YHI International net profit slips 13% for Q1 2012

Mainboard-listed YHI International Limited (YHI) announced on Tuesday a fall in their net profit for Q1 by 13 per cent at S$5.52 million, from S$6.35 million a year ago.

Earnings per share for the quarter stood at 0.94 Singapore cents, less than the value of 1.09 Singapore cents in the corresponding period last year.

YHI's total revenue rose by 6.9 per cent to S$137.9 million from S$129.0 million a year ago.

The distribution segment, which accounted for 72.6 per cent of the Group's total turnover, recorded a 6.2 per cent increase to S$100.1 million from S$94.3 million a year ago. Its manufacturing segment,increased 9.1 per cent in revenue, to S$37.8 million compared to S$34.7 million in the year ago period.

Despite the lukewarm results for Q1 2012, YHI appears unfazed by its current standing.

"Although the outlook of our Group's business operating environment is expected to remain challenging in the foreseeable future, our results demonstrate that we have stayed on track for growth " said Executive Chairman and Group Managing Director, Mr Richard Tay.

The company, with its strong balance sheet of net working capital of S$170.1 million, will continue to seek business opportunities in emerging markets for future growth, and expects its distribution business to continue to be its key contributor.

YHI stocks were flat at S$0.330 at the time of this report.

[Curiousparty]

Looks like YHI business model is much better than Stamford tyres?

YHI has a more diverified mix of products - 29% manufacturing and 71% distribution...

Well YHI operates in China and Vietnam but Stamford Tyres is in South Africa, Southeast Asia......

Whose network is more extensive?

[Musicwhiz]

More important question would be - what would affect the demand for tyres?

And also, what is the level of competition within the industry? How is the Company differentiating its products from its competitors? Based on price alone, or benefits etc?

<Not Vested>

[Underdogger]

car population - new and replacement...
Heavy vehicle population - some need more tyres and big ones...

More important question would be - what would affect the demand for tyres?

And also, what is the level of competition within the industry? How is the Company differentiating its products from its competitors? Based on price alone, or benefits etc?

<Not Vested>

[Stockerman]

News must have leaked out prior to this formal announcement... trading activites have been higher than normal in the past few days...


*****
Stamford Tyres to distribute Falken tyres in India with new JV
ByCarine Lee print |email this article "The physical presence of Falken Tyre India will allow Stamford Tyres to intensify its marketing efforts and establish Falken's brand name among consumers in the Indian market," said Stamford Tyres, which already distributes Falken Tyres in Singapore, Malaysia, Thailand, Indonesia and South Africa - PHOTO: SPH

Stamford Tyres Corporation Limited on Thursday announced it is establishing a joint venture sales company to supply Falken tyres in India.

Together with Sumitomo Rubber Asia (Tyre) Pte Ltd, a subsidiary of Sumitomo Rubber Industries, Ltd, the new company - Falken Tyre India Private Limited - will have a registered local capital of 550 million rupees (US$9.98 million).

Sumitomo will hold a 60 per cent stake while Stamford Tyres will hold the remaining 40 per cent.

The initial estimated investment for the joint venture is 110 million rupees, and the Stamford Tyres' maximum share of the investment is 220 million rupees.

Stamford Tyres plans to finance the investment with internal resources.

Falken Tyre India will be setting up its corporate headquarters in India with employees stationed across the country and will commence operation from April 2013.

It will leverage on Sumitomo's proprietary tyre technologies and Stamford Tyres' distribution capability to address the growing needs of the Indian replacement tyre market.

"The physical presence of Falken Tyre India will allow Stamford Tyres to intensify its marketing efforts and establish Falken's brand name among consumers in the Indian market," said Stamford Tyres, which already distributes Falken Tyres in Singapore, Malaysia, Thailand, Indonesia and South Africa.

The setting up of Falken Tyre India is not expected to have any material impact on the consolidated earnings per share or the consolidated net tangible assets per share of the Stamford Tyres group for the financial year ending April 30, 2013.

[dzwm87]

Interestingly, Wee Kok Wah, President of Stamford Tyres, had purchased 419,000 shares at a total consideration of $138,405 for the past week alone.

Based on AR2012 filing, Wee Kok Wah had at least S$500,000 in annual remuneration. On an optimistic view, it means he had place approx 30% of his annual wages.

A strong commitment or a side wage on the Indian JV?

[portuser]

His regualr purchases of Stamford Tyres shares could be to strengthen shareholding. With a stake of 37% only, he may have to rely on others' support.

[potatolover]

2Q 2012 results look very bad indeed.

Are we at the start of the cyclical down cycle for tyre industry?

[Curiousparty]

this is a very cyclical industry - in very good years, u have a high EPS as high as 5.7 cents per share.
How about during downcycle?
to be fair, we need to take an average of its EPS earnings over its full economic cycle. If u do that, the ave EPS may well be way below 5.7 cents. E.g. what was the EPS in 2009, which is not shown on the website?

Its most recent 2013 Q2 results were horrendous...[EPS for 1st half of FY13 was only 1.63 cents]

Given the cyclical nature, say ave EPS of 4 cents. P/E of 7 to 8 may be appropriate. Just my views...

it has dropped more than 6% since market opening...

the key question will be "Is Q3 results going to be worse or is this just one-off or is this the start of the down trend"?

Any view on Stamford Tyres?
It reported a $13.3m profit (or an eps of 5.7c) for financial year ended 30 April 2011; and was cautiously optimistic of profit improvement in the current financial year.

Group profit for the first half of the current FY was 33% higher; though floods in Thailand and depreciation of the South African Rand (against S$) lowered Q2 profit.

At the end of Q2 (31 Oct 2011), inventories stood at $148m, significantly higher than the $107m the year before. Stamford Tyres made no comparison of these two figures, but commented that the increase over $95m (as at 30 April 2011) was to meet anticipated seasonal rise in tyre demand.

Q3 results should be out by this week.