New Toyo

[Underdogger]

Hi Paullow

New Toyo own investment properties are stated at NAV in its books. If based on market valuation, the NAV would have been 3.7 cents more.
27mil (market value) vs 10.7mil (book carrying value)
[page 49 of New Toyo AR 2012]

Next, for Group investment investment, there is at least 4.3 more cents top up to the NAV if we just take it that the lands at Petaling Jaya and Australia (Smithfield - freehold 3.5 Ha) are sold off at current net book value.

PJ - 17.636 RM + 9.386 RM = 10.8 mil (SGD) [New toyo share is 54%]
Smitchfield - 42.85 RM = 17.1 mil (SGD) [New toyo share is 76%]
[Tien Wah AR 2012 page 133]

So overall, there are at least 8 cents safety margin to its current stated book NAV of 38 cents, bearing in mind that New Toyo is very likely to have 15 to 20 cents of cash by end of FY13 if it still continues to withhold special dividends.

seeing so much interest in new toyo, i decided to check its m'sia counterpart.
agree that biz is healthy n nowhere near ailing.
i noted that tien wah owns quite a lot of land in m'sia but all are leasehold n would expire in some 40-50yr.
of interest in the some 10acres of freehold land in australia which was acquired some 20yrs ago. is that value reflected in tien wah current nav? if not, this wld provide added downside guard. can this be redev into housing etc?

[paullow]

thanks underdogger.
seems to me that new toyo is attractively priced at the moment with a decent safety margin.
revenues are healthy and on increasing trend. cash n land safety net both present.

[Stockerman]

Hi GG

I agree with you. New Toyo is under-priced for reasons u have mentioned, and it will continue to be under-priced if the management still does not put in efforts to engage the investment communities.

Afterall, minority shareholders are usually the ones being disadvantaged and side-lined...

Also, one cannot safely assume that BAT will continue to renew the long term supply agreement with Tien Wah in Dec 2015 when it expires.
If Amcor and Amvig can offer much better rates than Tien Wah, BAT will just switch over to Amcor/Amvig.

Amcor rewarded "Old Yen" but not "Young Gary". What has Young Gary done to gain BAT trust? NOTHING!

I don't want to sound like a old broken recorder and a wet blanket - the truth is NT (no target) has yet to deliver since listing in 1997 and hence the good reason why share price remains so attractive even now.

Wind back - the Vietnamese tissue plant that has to be bailed out by Yen family eventually after NT started it as a promising business (at the turn of the 2000), SAH listing that turned out to be a cashing out of sunset packing business in China and the sale of Aluminium packaging shortly after it was started up till the long drawn dissolution of the company, the buying out of BAT Aussie/Asia Pac business (and the long lead time to ramp up the business - took almost 2 - 3 years to install capacity for the initial 7 years contract, in the process paying excessively to external contractors to fulfill BAT demands. In addition,NT continued to sit on a pile of non-core China properties...

If management is indeed caring for minorities, there would have been progressive measures proactively undertaken for the benefit of all shareholders - 16 years and still trading below book value giving high div yield...

Caveat Emptor
GG
Vested (Odd Lots)

[Stockerman]

Think about it this way. Why did New Toyo need to do a rights issue back then?

Does it mean that every time it expands, it needs to go back to equity holders for new sum of money? This does not make it very different from Investment Trusts (real estate, shipping, businesses, etc). Management gets a fat salary, and minority shareholders get marginalized!

The tissue business - it was not a bail out by Yen family. If one looks at it negatively, one would say that Yen family had benefitted at the expense of New Toyo!
Why did the tissue business revive when Yen family bailed it out? Why did they want to bail out an ailing business? Think hard and u will get the natural answer.
They are shrewd businessmen after all and not philanthropist!

The tainted history will follow New Toyo forever!
At the current market price, I would say that it might be over-valued given the kind of track record it has so far..

[Underdogger]

Not trying to talk up New Toyo but just drawing investor interest to what could possibly happen to New Toyo IF special dividend is declared.

GRP spiked from the low 20 cents to nearly 40 cents when special dividend ( 4cents) and regular dividend (1cent) is declared.
And in terms of economic moat, GRP is a far cry from New Toyo.
GRP is in the line of measuring instrument, marine & hose, etc. Its NAV is only barely 20 cents.

The share price has surpassed way beyond the NAV!

[paullow]

hi underdogger,
i know what u mean. look at old ck, also sama like grp.
such market response is unpredictable. if dividend positives out, no guarantee how much it will go up. maybe only by the amt of dividend? hard to say. imo.
like hupsteel, concrete plans are out for new 7storey building on a land price accounted for 20y ago, yet market din correct upwards by the correspondingly similar gains. it just moved by a miserable 1-2cents.

[Stockerman]

like what I said earlier, the true/real value of New toyo are just PAPER VALUE. they will never be realized given the track records of the current set of management. it is going to drop back to where it came from in the coming weeks, probably going back down to 25 cents....

[Stockerman]

Nikkei is bleeding by more than 200 points this morning. Expect New Toyo to drop below 30 cents!

No BIDS for New Toyo this morning

[kbl]

Never say never. Tsit Wing GO at S$0.3075 per Share higher than the NAV.

Not Vested Both

[Stockerman]

if someone puts in a bid say at 10 cents and someone sell to him. then technically New Toyo is dropping like 200%, from 30.5 cents to 10 cents? (since there is ZERO bids at all now)