New Toyo

[Stockerman]

i think there is going to be some mad rush to buy New Toyo when Mr Market opens in a few minutes time..haha...Good Luck to all..

dont trip over one another...

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Need to add that the exit after the ex-dividend will be equally messy...haha

i think there is going to be some mad rush to buy New Toyo when Mr Market opens in a few minutes time..haha...Good Luck to all..

dont trip over one another...

[Underdogger]

SAH's NAV is only 18.5 cents.
After giving out the 8.5 cents, NAV will be adjusted down to 10 cents...

Why are people buying SAH at 19.2 cents? illogical?
basically, you are just paying X cents to get back X cents....??

[Stockerman]

Amcor has been very aggressive on acquiring undervalued companies to spur its own growth. It uses EBIT for valuation, acquiring companies at EBIT around 6 to 6.5 times.

At 6 times EBIT, New Toyo will be valued at 55 cents (WITHOUT SAH). Add back SAH (12 cents cash), that will be 67 cents.
New Toyo's EBIT = $40mil (without SAH)

With the Euro crisis ongoing, some of the big European cigarette packing companies looking to diversify out of Euro Zone, might be very interested to buy over New Toyo. This point has been mentioned at AGM - European packaging companies coming to Asia Pacific region...

Or even Japan Tobacco International (JTI) might be interested to diversify into a lower cost base smack in the middle of Asia Pacific, the main growth area for cigarette. japanese yen is very strong

So in short, there are many potential candidates

[Curiousparty]

This means "some deal" for the remaining cash at SAH has been reached...

Super Boom for SAH and New Toyo!!

I think there will be takers for all NT pieces below 30 cents - dirt cheap, considering the likelihood of take-over plus stable nature of revenue ($14m to $16m per annum)

New Toyo has also secured new supply contract with PMI in the Philippines and this has not been factored into the annual revenue estimates...

SAH's NAV is only 18.5 cents.
After giving out the 8.5 cents, NAV will be adjusted down to 10 cents...

Why are people buying SAH at 19.2 cents? illogical?
basically, you are just paying X cents to get back X cents....??

[Stockerman]

remaining 10 cents at SAH - assume conservatively 25% premium.

12.5 cents + current 8.5 cents = 21 cents (SAH)
New Toyo's share = 14 cents

This means "some deal" for the remaining cash at SAH has been reached...

Super Boom for SAH and New Toyo!!

I think there will be takers for all NT pieces below 30 cents - dirt cheap, considering the likelihood of take-over plus stable nature of revenue ($14m to $16m per annum)

New Toyo has also secured new supply contract with PMI in the Philippines and this has not been factored into the annual revenue estimates...

SAH's NAV is only 18.5 cents.
After giving out the 8.5 cents, NAV will be adjusted down to 10 cents...

Why are people buying SAH at 19.2 cents? illogical?
basically, you are just paying X cents to get back X cents....??

[Curiousparty]

think a lot of people eager to take profit now are going to bang wall later on...

remaining 10 cents at SAH - assume conservatively 25% premium.

12.5 cents + current 8.5 cents = 21 cents (SAH)
New Toyo's share = 14 cents

[portuser]

There has been numerous U-turns in New Toyo history:
i) a failed diversification into Vietnam tissue paper plant that eventually the Yen family have to buy it off New Toyo;
ii) then came Shanghai Asia in 2004 - supposedly a winner in the consolidation of the Chinese tobacco industry but ended up drowning in it. Imagine SAH started as a defensive dividend yield play in one of the world's largest tobacco industry. Eventually, SAH has to diversify into aluminium foil manufacturing to salvage its own fortune. Just when the aluminium plant was completed, a trade sale was hatched;
iii) right after the listing of SAH, New Toyo was supposed to recycle the listing proceeds into related businesses to plug the earnings vacuum - that was in 2004. The meaningful and sizable acquisition only came in 08/09 when they bought out BAT's packaging business and was handed BAT's packaging for a period of time. The lucrative business took another 2 years to get over the start-up period.

Greengiraffe
Your list of New Toyo's misadventures should also include the heavy investment in the corrugated box business that went sour.
But New Toyo managed to restructure and minimise the losses from this and other failed ventures.
Aluminium foil business was already identified as an additional profit center during IPO. Your point that SAH had to diversify into aluminium foil manufacturing to make up for the decline in cigarette box printing business is not accurate.
I was among the many upset with the sale of the aluminium foil business. If the business were not sold, the steep drop in aluminium price (from US$2,700 per tonne to US$1,800 recently) would have hurt SAH as well as New Toyo badly.
We may not know whether the two years taken by Tien Wah to adjust to small-run printing is too long. But performance during the past four quarter seems to suggest that Tien Wah has been doing fine, and is riding on BAT's aggressive drive in the Asia-Pacific region.
The upcoming 2Q results may shed some light on this.

[greengiraffe]

As far as New Toyo is concern, I think it will be privatised instead of being taken over.

The return of $ from SAH will lighten the burden at the holding company level that will pave way for a privatisation. The common rationale for privatisation is the lack of need for funding for operations.

There is absolutely no analysts coverage on New Toyo for years and hence I think New Toyo is unlikely to chart down the path of reviving investors' relations except meeting a handful of shareholders annually.

On undervalued assets which are mainly property - they would have divested long time ago should they have deemed it non core. Their very existence is a typical Chinese mentality hence unless there is absolute need, these assets will continue to be held long term. Even the M'sia properties that is deem undervalued - they are primarily ind prop - currently used by Tien Wah. On paper, it makes sense to be redeveloped but in the midst of fulfilling BAT contract and possibly more new customers, it is unlikely that any redevelopment will happen soon.

As for SAH's remaining cash - it will be used as seed $ for some new ventures - very likely linked to the ex-chinese partners (even though they have stepped down from SAH).

All the above can be construed as my conspiracy theory. All the while sin industry players are complicated and hence one has got to be cautious when trying to second guess their business moves.

[Stockerman]

If a 10% holding is enough to thwart the privatisation attempt , then I think any such attempt will be thwarted

As far as New Toyo is concern, I think it will be privatised instead of being taken over.

The return of $ from SAH will lighten the burden at the holding company level that will pave way for a privatisation. The common rationale for privatisation is the lack of need for funding for operations.

There is absolutely no analysts coverage on New Toyo for years and hence I think New Toyo is unlikely to chart down the path of reviving investors' relations except meeting a handful of shareholders annually.

On undervalued assets which are mainly property - they would have divested long time ago should they have deemed it non core. Their very existence is a typical Chinese mentality hence unless there is absolute need, these assets will continue to be held long term. Even the M'sia properties that is deem undervalued - they are primarily ind prop - currently used by Tien Wah. On paper, it makes sense to be redeveloped but in the midst of fulfilling BAT contract and possibly more new customers, it is unlikely that any redevelopment will happen soon.

As for SAH's remaining cash - it will be used as seed $ for some new ventures - very likely linked to the ex-chinese partners (even though they have stepped down from SAH).

All the above can be construed as my conspiracy theory. All the while sin industry players are complicated and hence one has got to be cautious when trying to second guess their business moves.

[Underdogger]

http://forum.shareinvestor.com/archive/0...02_12.html

For listed company to become private company, it is usually the result of takeover (privatisation) exercise. The company act allows a offeror to compulsory acquire the shares owned by dissenting shareholders when
i. The offeror gets more than 90% of the capital of the target company.
ii. And more then 90% acceptance of balance capital, i.e. those not owned by offeror initially.

Yen family owns abt 52%.
10% of Remaining 48% OR 4.8% is enough to block the deal.

just scroll thru the list of top 20 shareholders. Just pick any 2 and they can block the deal.

GG, can u show me how can the Yen Family privatize NT so easily? unless they resort to underhand methods...haha