New Toyo

[Young Investor]

Tien Wah paid retrenchment expenses and one-off sales rebate of RM 4.8m, which affected profit.
Looks like Anzpac is going to close down. There was retrenchment last year at Anzpac when one production line was moved to Vietnam.    

[Curiousparty]

With the transfer of production line to Vietnam, there should be cost savings. But it did not seem to be reflected in the financial position. Was there really cost savings? Or is it that the cost savings had been offset by the drop in volume?

Tien Wah had continued to cite challenging market situation and also mentioned that demand would not be expected to increase. This is the biggest problem with printers.

Printers like Tien Wah/New Toyo cannot increase their unit price when volume drops, contrary to the big tobacco makers which will increase their unit price to offset volume drop to maintain profit margin.

"The Directors are of the opinion that the outlook for 2015 remains challenging as demand is not
expected to have any significant increase."

[BlueKelah]

There does seem to be a decline in tobacco printing and use in recent times. Likely to be continued but with mega-corps like B.A.T, they will find a way to expand their revenue stream with other alternative products.

Company probably needs to consider branching out to other markets and types of printing. Or maybe OPMI just need to be patient and see where things go. After all profits are still being made, balance sheet is strong and there is still lotsa cash lying around.

ADDIT : Results just out.

Revenue 285m, 2013 ~282m (stable)

Segmental breakdown of revenue 2014 / 2013
Singapore 43,403 / 41,453
Vietnam 37,105 /40,354
China 3,182 / 2,335
Hong Kong 121,695 / 106,521 (good growth here)
Australia 33,944 / 41,699
Malaysia 45,896 / 49,488

Sales (continuing operations) reported for 1st half year 140,861
Sales (continuing operations) reported for 2nd half year 144,364 (looks pretty stable)

EPS 2.4c (PE 10.63)

NAV 36.57c (30% discount)

Cash 71.571m - Debt 32.596m = 38.975m (34.78% of MCap net cash)

Div 0.6c final + 0.6c interim = 1.2c (4.71% yield)

Not fantastic but also not too bad for this year. Balance sheet is still rock-solid.

Will have to see the effect of moving operations from AUS to Vietnam for Tienwah but this should be seen in next 2 quarters.

[Curiousparty]

Amcor launches $500 million share buyback on strong profit results

http://www.smh.com.au/business/markets/a...3fyem.html

"Mr MacKenzie said the company would consider more mergers and acquisitions in the second half, but as yet none had emerged that would produce the required 20 per cent return on investment to shareholders over three years."

"Amcor shareholders have received 321 per cent total return over six years, or 33 per cent on an annualised basis,"

New Toyo and Tien Wah's performances were a far cry from Amcor. Better to put money in Amcor than Tien Wah or New Toyo.

[BlueKelah]

Amcor launches $500 million share buyback on strong profit results

http://www.smh.com.au/business/markets/a...3fyem.html

"Mr MacKenzie said the company would consider more mergers and acquisitions in the second half, but as yet none had emerged that would produce the required 20 per cent return on investment to shareholders over three years."

"Amcor shareholders have received 321 per cent total return over six years, or 33 per cent on an annualised basis,"

New Toyo and Tien Wah's performances were a far cry from Amcor. Better to put money in Amcor than Tien Wah or New Toyo.

If one's fund is flexible with overseas stock investment there are many other listed printers overseas you could "better" put your money in.

However for CPF investment foreign stocks are not allowed.

[Curiousparty]

http://infopub.sgx.com/Apps?A=COW_CorpAn...a6441f9eb5

New Toyo's final dividend dropped by 50% from 0.9 cents to only 0.6 cents.
At current share price of 25.5 cents, dividend yield is only 4.7%

EPS had dropped to 2.4 cents from 3.6 cents or 33% drop.

[Curiousparty]

http://www.nextinsight.net/index.php/sto...nd-to-come

Good if "New Toyo Investor" can come forward again to evaluate whether there would be another round of special dividends.
Would he still be as hopeful as before?

[Curiousparty]

revenue growth for Hong Kong segment was mainly due to "trading", where profit margin was very low.

Hence, one should not read too much into revenue growth for HK.

Instead one should really read more into the revenue drop for key tobacco printing markets in Vietnam, Malaysia, and Australia.

The market pie for Tien Wah/New Toyo is getting smaller and smaller. As long as they do not grow organically or by means of M&A, they will lapse into oblivion.

Pls correct if I am wrong.

Many tks.

Happy CNY

There does seem to be a decline in tobacco printing and use in recent times. Likely to be continued but with mega-corps like B.A.T, they will find a way to expand their revenue stream with other alternative products.

Company probably needs to consider branching out to other markets and types of printing. Or maybe OPMI just need to be patient and see where things go. After all profits are still being made, balance sheet is strong and there is still lotsa cash lying around.

ADDIT : Results just out.

Revenue 285m, 2013 ~282m (stable)

Segmental breakdown of revenue 2014 / 2013
Singapore 43,403 / 41,453
Vietnam 37,105 /40,354
China 3,182 / 2,335
Hong Kong 121,695 / 106,521 (good growth here)
Australia 33,944 / 41,699
Malaysia 45,896 / 49,488

Sales (continuing operations) reported for 1st half year 140,861
Sales (continuing operations) reported for 2nd half year 144,364 (looks pretty stable)

EPS 2.4c (PE 10.63)

NAV 36.57c (30% discount)

Cash 71.571m - Debt 32.596m = 38.975m (34.78% of MCap net cash)

Div 0.6c final + 0.6c interim = 1.2c (4.71% yield)

Not fantastic but also not too bad for this year. Balance sheet is still rock-solid.

Will have to see the effect of moving operations from AUS to Vietnam for Tienwah but this should be seen in next 2 quarters.

[Curiousparty]

What we should be really concerned is the entrenched decline seen in the tobacco printing revenue.
We can find this in Tien Wah financial statement.

After all, the best profit margin (in descending ranking order) was attributable to tobacco printing, followed by specialty paper, and lastly trading.

This is really what investors should be concerned about.

[Curiousparty]

New Toyo's financial results really paled in comparison to Amvig, a big tobacco printing/packaging company in China.


page 75 of AR stated that "an anticipatory revenue growth rate of -ve 8% is assumed for 2015"...


http://www.amvig.com/eng/ir/highlight.htm

The level of disclosure by New Toyo is also very opaque unlike Amvig which readily disclosed their product mix, and the GPM for each of the product in tobacco printing/packaging.

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http://www.nextinsight.net/index.php/sto...ie-factory

New Toyo seems to take ages to optimize their land use in Australia. Very efficient indeed...