New Toyo

[portuser]

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.

Greengiraffe
There are reports on adjacent properties being redeveloped for commercial use.
The new printing machines bought to handle BAT's demand are all in Vietnam. In addition, a machine from the Malaysian factory had been upgraded and sent to Vietnam. The likelihood of the present factory and warehouse being redeveloped for commercial use cannot be ruled out.

[Curiousparty]

Although u qualified it as your conspiracy theory, can u at least do some background check before putting across your points. It seems so embarrassing that your points got rebutted one after the other by forummers.

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.

[greengiraffe]

My experience with New Toyo has been on and off since its listing back in 97.

Fortunately, it has been that way else I would have been licking my wounds big time.

I am glad that many buddies have done more work than I am and have been correcting me on some of my points.

In investments, there is nothing to be embarrassed over. More importantly it is better to make money rather than losing money.

On New Toyo, from the days that it was traded above book value till an ugly duckling that is trading below book value - becoming a value stock -it speaks very much of management quality. Then again, never say never - to each its own - as long as you are comfortable with the risks that you are taking - noone can say that you are wrong.

Although u qualified it as your conspiracy theory, can u at least do some background check before putting across your points. It seems so embarrassing that your points got rebutted one after the other by forummers.

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.

[Curiousparty]

NOL with 6 consecutive quarters of loss is still trading way above its NAV....

Technically, NAV is not a good proxy for valuation...
Business cashflow is a better determinant. Interest, tax, depreciation and amortizations should be added back to compute EBITDA, proxy for operating cashflow...

The following is purely my personal opinion based on experience with New Toyo since its listing in late 90s.

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.

There is no doubt that New Toyo is undervalued. However, it is undervalued for its track record.

With SAH divested and money returning, there could well be an incentive for New Toyo to be privatised especially when its gearing is lightened. At what value - may be at book value.

All my speculations...

[Curiousparty]

MM Packaging's scale of operations in Europe is big...

If it wants to make inroad into Asia-Pacific region with one of the highest organic growth for tobacco packaging, then it could consider acquiring New Toyo to hasten the process..

************

Mayr-Melnhof acquires Packaging Group Graphia

- Major acquisition in the cigarette packaging sector
- Entry into rotogravure technology strengthens position as leading European producer of cigarette packaging
- Expansion in Western and Eastern Europe

Mayr-Melnhof Karton AG has acquired Graphia Group, Bielefeld. The Group was previously owned by several family and working partners. No further details will be released concerning the purchase price.

The Graphia Group is a renowned producer of cigarette packaging, specializing in rotogravure, offset and flexo printing technologies. The company also manufactures high grade confectionery packaging in offset printing. The Group encompasses three facilities in Germany, Graphia KG, Bielefeld, Innovaprint KG, Bielefeld, and Busche GmbH, Dortmund, as well as a site in Cherkasy, Ukraine. Its customers include internationally known cigarette producers such as Reemtsma, Philip Morris and BAT. At the end of 2001, approximately 1,000 people were employed by the Graphia Group. Consolidated sales in 2001 amounted to approximately EUR 150 million, the majority of which were made with cigarette producers.

Active in the ”Consumer Packaging” and ”Cigarette Packaging” segments, Mayr-Melnhof Packaging is the leading European folding carton producer. The Acquisition of Graphia Group fully conforms with the strategy to expand into high-quality packaging segments and on the Eastern European growth markets.

In connection with Mayr-Melnhof’s existing cigarette packaging business in offset printing, Graphia’s technology and products represent an ideal strategic expansion. The move into rotogravure printing, the most widespread printing method in cigarette packaging, constitutes a major step forward for Mayr-Melnhof towards the strengthening of its market position and the establishment of the ”Cigarette Packaging” Division.

Through this acquisition, Mayr-Melnhof will not only add to its Western European business, but also increase its presence in Central and Eastern Europe, benefiting to a larger extent from the growth in this region.

Mayr-Melnhof ranks among the 3 leading European producers of cigarette packaging alongside Amcor-Rentsch und Alcan Packaging.

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]

it was very spectacular that Tye Soon with just NAV of 21 cents reached as high as 30 cents when only special dividend of 5 cents was declared in the early part of this year...

New Toyo with an understated NAV of 36.5 cents waiting to receive 2 batches of cash dividends from SAH (total - at least 12 cents, depending on how much premium of the 2nd batch) is only trading at 29.5 cents..

Just wondering when is Mr Market coming to its senses?

[Underdogger]

BOOM

Check out Tien Wah Good results - again another very solid quarter!!

http://www.bursamalaysia.com/market/list...ts/1036993

[Underdogger]

Tien Wah has spiked up to 2.08 (RM). New Toyo Q2 profit will be in the region of $4mil. This is after considering the fact that New Toyo has lost 2 key markets in the Philippines due to assimilation by PMI, the largest player.

But with additional revenue from the new supply contract from PMI coming onstream from Q3 onwards, NT bottom-line will be further boosted.

Smoke busineses seems unfettered at all from Euro crisis..

Going forward, think we are looking at around $18m per annum or 4 cents EPS.

PER 10 gives 40 cents (without SAH).

[Underdogger]

Tien Wah has enough cash on hand to pare down all its long term debts in one fell swoop but it is not doing that. it is taking its time to repay slowly and will be able to do so easily in next 4 to 5 Quarters.
No gearing issue for Tien Wah. In fact, repaying off all the debt will upset relationships with bankers. haha...

Tien Wah has so much cash that it is paying out mid-yr dividend...1st time in history?

New Toyo's debts are negligible...

Don't forget that New Toyo still has gearing on books. It ain't over till the fat lady sings. Wait and see.

[potatolover]

Chances are much higher now for Amcor to re-acquire New Toyo (with Tien Wah) now that NT has established itself as a leader in tobacco packaging...

Previously, Amcor withdrew itself from Malaysia...It might be making a comeback again

Amcor growth strategy has always been thru aggressive M & A....