New Toyo

[BlueKelah]

More details on the deal. At first glance it seems like EPS will be boosted by 10%+ at the expense of about 10% of NTA. It seems a premium was paid for the profitable Indo company. In any case, NT is establishing a foothold into the Indonesian printing market which is encouraging.
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PROPOSED ACQUISITION OF 100% EQUITY INTEREST IN PT BINTANG PESONA JAGAT


[
Based on 439,424,603 issued shares in the capital of the Company (“Shares”).
Before the Proposed Acquisition | After the Proposed Acquisition

Net Tangible Asset (S$’000) 164,994 | 149,067
NTA per Share (S$ cents) 37.55  | 33.92
Profit attributable to owners of the Company (S$’000) 14,673 | 16,405
Basic Earnings per Share (S$ cents) 3.34 | 3.73 (based on earnings for FY15 ending in 31 Dec 2015)
]

[portuser]

The acquisition of  BPJ (the cigarette carton printing arm of Bentoel, British American Tobacco's subsidiary in Indonesia) will see New Toyo expanding its footprint to Indonesia, which ranks second in cigarette consumption after China.
   
New Toyo's effective stake in BPJ will be 77% if the deal goes through.

BPJ's 2015 profit was $2.25m, from supplying printed cartons for 23 billion cigarette sticks produced by Bentoel.

In an earlier development, BAT announced closing down its Malaysian factory for cost considerations, and selling the factory land in Petaling Jaya

Tien Wah's (New Toyo's 54% owned subsidiary) is also closing down its cigarette carton printing factory in Petaling Jaya, around the same time, for mixed-use development on the 1.3-hectare land, in partnership with Lum Chang.

If Bentoel takes over production of the BAT's Malaysian factory (12 billion cigarette sticks in 2015), New Toyo will benefit from the following:

(1) transfer of the printing business of Tien Wah's Petaling Jaya's factory to BPJ; and

(2) more profit for BPJ arising from higher printing volume.

[BlueKelah]

Tien Wah's (New Toyo's 54% owned subsidiary) is also closing down its cigarette carton printing factory in Petaling Jaya, around the same time, for mixed-use development on the 1.3-hectare land, in partnership with Lum Chang.

If Bentoel takes over production of the BAT's Malaysian factory (12 billion cigarette sticks in 2015), New Toyo will benefit from the following:

(1) transfer of the printing business of Tien Wah's Petaling Jaya's factory to BPJ; and

(2) more profit for BPJ arising from higher printing volume.

The Lum Chang deal was already in the plans more than a year ago when the MOU was announced. I suspect the AUssie and Malaysian factories have both moved most of their operations to Vietnam already once the plant was completed and prodcution there is ramping up pretty well as revenue and earnings are showing. (TWPH was already retrenching people since early 2015 at AUssie plant in preparation to move everything to Vietnam. So I think the Msia printing business will go to the new factory in Vietnam. )

This Indo development was only recent and not confirmed since it was a tender so it is unlikely TWPH plan the move to INdo since they already planned to vacate the  Malaysia plant for redevelopment a year ago.

However if Indo production is cheaper, for sure TWPH will move some printing volume over there.

[piaopiao]

Tien Wah's (New Toyo's 54% owned subsidiary) is also closing down its cigarette carton printing factory in Petaling Jaya, around the same time, for mixed-use development on the 1.3-hectare land, in partnership with Lum Chang.

If Bentoel takes over production of the BAT's Malaysian factory (12 billion cigarette sticks in 2015), New Toyo will benefit from the following:

(1) transfer of the printing business of Tien Wah's Petaling Jaya's factory to BPJ; and

(2) more profit for BPJ arising from higher printing volume.

The Lum Chang deal was already in the plans more than a year ago when the MOU was announced. I suspect the AUssie and Malaysian factories have both moved most of their operations to Vietnam already once the plant was completed and prodcution there is ramping up pretty well as revenue and earnings are showing. (TWPH was already retrenching people since early 2015 at AUssie plant in preparation to move everything to Vietnam. So I think the Msia printing business will go to the new factory in Vietnam. )

This Indo development was only recent and not confirmed since it was a tender so it is unlikely TWPH plan the move to INdo since they already planned to vacate the  Malaysia plant for redevelopment a year ago.

However if Indo production is cheaper, for sure TWPH will move some printing volume over there.

BLUEKELAH,

Why did NT do badly in 3Q2016?

[BlueKelah]

Tien Wah's (New Toyo's 54% owned subsidiary) is also closing down its cigarette carton printing factory in Petaling Jaya, around the same time, for mixed-use development on the 1.3-hectare land, in partnership with Lum Chang.

If Bentoel takes over production of the BAT's Malaysian factory (12 billion cigarette sticks in 2015), New Toyo will benefit from the following:

(1) transfer of the printing business of Tien Wah's Petaling Jaya's factory to BPJ; and

(2) more profit for BPJ arising from higher printing volume.

The Lum Chang deal was already in the plans more than a year ago when the MOU was announced. I suspect the AUssie and Malaysian factories have both moved most of their operations to Vietnam already once the plant was completed and prodcution there is ramping up pretty well as revenue and earnings are showing. (TWPH was already retrenching people since early 2015 at AUssie plant in preparation to move everything to Vietnam. So I think the Msia printing business will go to the new factory in Vietnam. )

This Indo development was only recent and not confirmed since it was a tender so it is unlikely TWPH plan the move to INdo since they already planned to vacate the  Malaysia plant for redevelopment a year ago.

However if Indo production is cheaper, for sure TWPH will move some printing volume over there.

BLUEKELAH,

Why did NT do badly in 3Q2016?

Why would you say they did "badly"?

I would say they did alright given the poor global economic conditions. On top of that, its a combination of termination charges for lay-off in closing down Aussie operations and increase in cost of sales that has mainly contributed to the drop in earnings this quarter.

I expect earnings will recover in a good way probably in half years time. NT will benefit from

1) rising USD.
2) Cost savings from streamlining operations to Vietnam and Indo from higher cost Aussie / Msia locations.
3) one time gains from the property redevelopment in KL which they will be paid in cash for land pretty soon.

[BlueKelah]

wow massive volume and shoot up to 30c+ 

did some analyst/trading house issue buy report?

[Scg8866t]

wow massive volume and shoot up to 30c+ 

did some analyst/trading house issue buy report?

Apparently price shot up after 3pm i suspect it could be london buying since BAT is involve. Another possibility is reit investors divested and bought into net net counters like teckwah and new toyo.

I find new toyo to be very close to book now, I sold mine already. I predict final year div to be less than 1 ct but I could be wrong.

Ps: Teckwah shot up 9.46% today too.

[BlueKelah]

wow massive volume and shoot up to 30c+ 

did some analyst/trading house issue buy report?

Apparently price shot up after 3pm i suspect it could be london buying since BAT is involve. Another possibility is reit investors divested and bought into net net counters like teckwah and new toyo.

I find new toyo to be very close to book now, I sold mine already. I predict final year div to be less than 1 ct but I could be wrong.

Ps: Teckwah shot up 9.46% today too.

Tide is going out again for REIT investors I guess, with imminent rate rise and bond yields have been rising like crazy lately making their funding costs higher very quickly....

Lol maybe some M & A in the printing sector who knows. 

I will be selling when it reach book value as usual and probably keep some free shares. Redeploy into Multichem lol...

1cent should be secure as 3q EPS is already 1.37c. Also TIenwah should get paid well for their share for providing land in KL project. Cash level is pretty high too so no reason not to maintain dividend.

[Young Investor]

The NAV is 38.44c.
But there are real estates that are undervalued. So NAV is actually higher.

[BlueKelah]

The NAV is 38.44c.
But there are real estates that are undervalued. So NAV is actually higher.

i wouldn't factor that into my calculations for fair value or margin of safety. 

Of course in the case of a market crash the real estates and cash on hand do provide a safety net to hold without any worries.