New Toyo

[Swinger]

FY: 2012 2011 2010 2009 2008 2007 2006 2005 2004 2003
Earnings: 3.37 4.51 3.91 4.41 3.55 4.75 2.40 4.45 9.55 6.69
Gross Dividend: 1.70 1.94 1.94 2.00 1.83 1.83 0.93 2.33 3.76 4.13
Dividend Yield: 5.67 6.47 6.47 4.17 3.81 3.81 1.94 4.85 7.83 7.62

Based on past year records it is safe to assume that dividends continue to flow in while waiting for value to unlock. The yield is attractive and not easy to beat. Would appreciate if you could share which other counters that can better this with similar characteristics. After considering arguments from both sides I'm of the opinion that the potential for upside outweigh the risk and I'm now vested.

Would like to add if NT were to come down further.

[Underdogger]

The key point to note is that there has been consistent payment of dividends throughout the entire economic cycle, good/bad times.

In good/bad times, people still smoke. It is a big smoking world in developing countries, and set to expand much more.
EPS is still set to grow. This is both a dividend and growth counter.

FY: 2012 2011 2010 2009 2008 2007 2006 2005 2004 2003
Earnings: 3.37 4.51 3.91 4.41 3.55 4.75 2.40 4.45 9.55 6.69
Gross Dividend: 1.70 1.94 1.94 2.00 1.83 1.83 0.93 2.33 3.76 4.13
Dividend Yield: 5.67 6.47 6.47 4.17 3.81 3.81 1.94 4.85 7.83 7.62

Based on past year records it is safe to assume that dividends continue to flow in while waiting for value to unlock. The yield is attractive and not easy to beat. Would appreciate if you could share which other counters that can better this with similar characteristics. After considering arguments from both sides I'm of the opinion that the potential for upside outweigh the risk and I'm now vested.

Would like to add if NT were to come down further.

[Underdogger]

If you refer to page 20 of AR 2012 (New Toyo), under non-current and current liabilities (financial liabilities - company level) - it is ZERO.

This means that at New Toyo Company level, there is no debt
The last batch of $30mil dividend from SAH will go straight into New Toyo pocket.

The implication is clear.
The debt is at Tien Wah, the crown jewel and MEIL (trading post at Hong Kong).
Very very strong likelihood of special dividend.

Pls correct me if I am wrong

[Curiousparty]

the giving of special dividend is a good way by management to unlock the value and garner investment community interest in the counter.

My gut feel is that New Toyo will make a run for 45 cents at least, if a special dividend of around 5 cents is declared, taking reference from all the various counters with special dividend history, and the amt of excess cash beyond capex needs. There might even be a few around of special dividends from now onwards...

40 cent level should be easily overcome. 50 cents is a stretched target though...

The verdict would probably be out in a few months time.

Soon New Toyo will not be at the current price range...

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!

[pianist]

what is meil

[Underdogger]

It is a JV between Tien Wah (51%) and New Toyo (49%) that controls Anzpac.

It also serves as a conduit/trading post where New Toyo will cream off a certain % for commission. MEIL is located at Hong Kong.

New Toyo's effective stake in MEIL is 76.5%, comprising its 49% direct stake and indirect stake through Tien Wah. The set up of MEIL was an ingenious move as it allows New Toyo to cream off most of the group’s profit (approximately 70%). Had MEIL been 100% owned by Tien Wah, New Toyo share of group profit would have been only 54% since it owns 54% of Tien Wah.

Hope this clarifies.

http://www.anzpac.com.au/about_us/who.html

what is meil

[Underdogger]

As usual, when news of special dividends are leaked out or announced, there will be a mad stampede to buy up New Toyo.

Singaporeans like to do last min shopping

the giving of special dividend is a good way by management to unlock the value and garner investment community interest in the counter.

My gut feel is that New Toyo will make a run for 45 cents at least, if a special dividend of around 5 cents is declared, taking reference from all the various counters with special dividend history, and the amt of excess cash beyond capex needs. There might even be a few around of special dividends from now onwards...

40 cent level should be easily overcome. 50 cents is a stretched target though...

The verdict would probably be out in a few months time.

Soon New Toyo will not be at the current price range...

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 got a thought.

I noted that the proceeds from SAH should be in NT soon. But can NT choose to decline to pay special dividends from that proceeds?
Cos if so, then shareholders would be left waiting and collecting their normal dividends which is already quite decent.
I mean, is there an incentive for the management to unlock the value of this stock and return some of this value to the minority shareholders?
Not trying to be wet blanket.

[Underdogger]

Hi Paullow

That is entirely plausible. Management can choose to retain all the proceeds from SAH within New Toyo.
At the last AGM, management expressed that they would need to maintain a good balance between "enhancement capex" and "special dividend".

My own view is that the existing (very strong and stable) cashflow would be more than enough to enhance their capex
I believe most of the strong critics think that special dividends would never be dished out...

The regular dividend would probably be restored from current 1.7 to approx. 2 cents (per annum) with improvement in EPS.
[they have adjusted the interim dividend from 0.8 cents to 0.9 cents for the last 6mths]

2 cents over 30.5 cents = 6.5% (forward looking yield), which is very decent

Hi underdogger,

I got a thought.

I noted that the proceeds from SAH should be in NT soon. But can NT choose to decline to pay special dividends from that proceeds?
Cos if so, then shareholders would be left waiting and collecting their normal dividends which is already quite decent.
I mean, is there an incentive for the management to unlock the value of this stock and return some of this value to the minority shareholders?
Not trying to be wet blanket.

[greengiraffe]

Mate,

16 long years liao, I have yet to see daylight in the smokes package (from IPO day), what will make it different this time.

I think you are better off buying into smokes mfger direct for div yield.

Frankly, I still remember how much I made from Rothmans/BAT delisting by BAT than the amount of pains waiting for the smoke screen here.

I think someone is probably thinking of ways to lay hands on the cash than sharing.

GG

Hi Paullow

That is entirely plausible. Management can choose to retain all the proceeds from SAH within New Toyo.
At the last AGM, management expressed that they would need to maintain a good balance between "enhancement capex" and "special dividend".

My own view is that the existing (very strong and stable) cashflow would be more than enough to enhance their capex
I believe most of the strong critics think that special dividends would never be dished out...

The regular dividend would probably be restored from current 1.7 to approx. 2 cents (per annum) with improvement in EPS.
[they have adjusted the interim dividend from 0.8 cents to 0.9 cents for the last 6mths]

2 cents over 30.5 cents = 6.5% (forward looking yield), which is very decent

Hi underdogger,

I got a thought.

I noted that the proceeds from SAH should be in NT soon. But can NT choose to decline to pay special dividends from that proceeds?
Cos if so, then shareholders would be left waiting and collecting their normal dividends which is already quite decent.
I mean, is there an incentive for the management to unlock the value of this stock and return some of this value to the minority shareholders?
Not trying to be wet blanket.