New Toyo

[Stockerman]

Given that 1/3 of revenue/profit stream from SAH has been lost and perhaps 26 cents might have already included the 12.5 cents from SAH, isn't 26 cents already more than over-valued the counter?

26 - 12 = 14 cents.

14 cents over EPS (3.5 cents) gives P/E of 4, which seems rather reasonable, isn't?

Remember that this is a low profile, low liquidity counter and largely relies on Tien Wah for the bulk of revenue/profit. Anything happens to Tien Wah will be a deadly blow to New Toyo...

At 26 cents, the shares are under-valued. The financial year end is 31 Dec, so there will be dividends coming soon. The bidders at 26 cents may be waiting to buy at low price and sell when the dividends are declared.

Quite a huge bids at 26 cents (400 plus lots). Those tired of holding can start dumping

[Louhan]

Net asset value is 36 cents, which is 9.5 cents above the current share price of 26.5 cents. If New Toyo were to pay dividends of 12.5 cents, then net asset value will fall to 23.5 cents.

Given that 1/3 of revenue/profit stream from SAH has been lost and perhaps 26 cents might have already included the 12.5 cents from SAH, isn't 26 cents already more than over-valued the counter?

26 - 12 = 14 cents.

14 cents over EPS (3.5 cents) gives P/E of 4, which seems rather reasonable, isn't?

Remember that this is a low profile, low liquidity counter and largely relies on Tien Wah for the bulk of revenue/profit. Anything happens to Tien Wah will be a deadly blow to New Toyo...

At 26 cents, the shares are under-valued. The financial year end is 31 Dec, so there will be dividends coming soon. The bidders at 26 cents may be waiting to buy at low price and sell when the dividends are declared.

Quite a huge bids at 26 cents (400 plus lots). Those tired of holding can start dumping

[Stockerman]

NAV is just a theoretical estimate of net worth of company.

E.g. Can New Toyo go out tomorrow and sell off all its investment properties? Cannot
Can New Toyo sell off its Tien Wah business at one go ? Cannot.

In short, NAV is usually never realized for most companies, and it will never be realized if there are no other “bigger” investors interested and willing to buy over the companies and who can see value in the company. You and I can see great value in the company but to not much avail.

Just look at those S-chips. Many of them have share prices at steep discount to NAV. We are talking about deep discount of a few hundred %.

E.g. NAV = 50 cents; Share price = 5 cents.


Is it still possible for New Toyo to pay out 12.5 cents - I think it is quite IMPOSSIBLE...
Because it has used the 1st payout from SAH to pare down its debt....

So if New Toyo is already correctly "market-priced" now, any payment of special dividend will further cause its share price to drop, after the ex-dividend date. Be aware!

Net asset value is 36 cents, which is 9.5 cents above the current share price of 26.5 cents. If New Toyo were to pay dividends of 12.5 cents, then net asset value will fall to 23.5 cents.

Given that 1/3 of revenue/profit stream from SAH has been lost and perhaps 26 cents might have already included the 12.5 cents from SAH, isn't 26 cents already more than over-valued the counter?

26 - 12 = 14 cents.

14 cents over EPS (3.5 cents) gives P/E of 4, which seems rather reasonable, isn't?

Remember that this is a low profile, low liquidity counter and largely relies on Tien Wah for the bulk of revenue/profit. Anything happens to Tien Wah will be a deadly blow to New Toyo...

At 26 cents, the shares are under-valued. The financial year end is 31 Dec, so there will be dividends coming soon. The bidders at 26 cents may be waiting to buy at low price and sell when the dividends are declared.

Quite a huge bids at 26 cents (400 plus lots). Those tired of holding can start dumping

[Stockerman]

5 bidders for 26 cents for a total of 292 lots

1. 190
2. 20
3. 45
4. 35
5. 2

One seller at 26.5 cents

[Stockerman]

Let see how much final dividend will be cut for the full-yr.

To recap, the interim dividend was reduced from 0.97 to 0.8 cents or 18% CUT.
Company cited loss of revenue/profit stream from SAH as a result.

[Stockerman]

The nail to New Toyo's coffin would probably be Plain Packaging momentum being spread around the world, especially in the developing countries, causing a massive drop in smoking rates

Plain packaging is the "biggest regulatory threat to the industry, as packaging is the most important way tobacco companies have to communicate with the consumer and differentiate their products". Investment bank, Citigroup.

No wonder Armed Forces are paring down their stake in Tien Wah...from 16% to 14%...the selling may continue into 2013...

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Good Quotes on Plain PackagingFrom TobaccoTactics
Jump to: navigation, search"We expect a bare-knuckle fight from the industry". Martin Deboo, an Investec tobacco analyst. [1]



"Plain Packaging Spells Disaster" Tobacco Journal International.[2]



"There is no doubt that the power of the brand, upon which much of the success of any major fast moving consumer goods (FMCG) industry is based, would be severely damaged without the colours and the design recognised by millions of consumers." Tobacco Journal International.[3]



"Given current restrictions on advertising, packaging is the most important method of branding still available. Plain packaging will therefore significantly reduce the role of brands." Philip Morris consultant.[4]



Plain packaging is the "biggest regulatory threat to the industry, as packaging is the most important way tobacco companies have to communicate with the consumer and differentiate their products". Investment bank, Citigroup.[5]



"In the absence of any other Marketing messages, our packaging -- comprised of the trademark, our design, color and information -- is the sole communicator of our brand essence. Put another way -- when you don't have anything else -- our packaging is our Marketing." Philip Morris.[6]



Philip Morris also describes packaging as "an integral part of the product". It argues: "Packaging is an important means of differentiating brands and in that sense is a means of communicating to consumers about what brands are on sale and in particular the goodwill associated with our trademarks, indicating brand value and quality. Placing trademarks on packaged goods is, thus, at the heart of commercial expression."[7]



Marketing literature calls pack design "the communication life-blood of the firm” and the “silent salesman” that reaches out to customers.[8]



"For cigarettes, the pack is the brand. Multinational companies such as BAT spend millions developing the most effective pack designs that hold the greatest appeal to their target consumers ... While it is likely that people will always smoke, reducing cigarettes to a generic brand status with plain packaging will dramatically limit the capacity to market the product." Steven Greenland, Senior Lecturer in Marketing at Swinburne University of Technology, Australia.[9]



"The phasing in of the display ban and government consultations on plain packaging are a huge blow to the tobacco industry given the critical role of great pack design and PoS [Point of Sale] in influencing consumer decision making." David Timothy, senior account director at brand consultancy, Anthem Worldwide.[10]

[Underdogger]

New Toyo mentioned something about going into the African market at the last AGM........

Tobacco use is declining in the developed world. It's reached a plateau in the strongest market, Asia. But it is growing in Africa, because of the continent's booming population and rapidly expanding middle class.




http://www.latimes.com/health/la-fg-sout...full.story

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http://www.washingtonpost.com/blogs/worl...y-country/

The highest rates are all in Eastern Europe. The one Eastern European exception is Romania, which had similarly bleak numbers until it enacted tough anti-smoking laws in 1997.

• The biggest smokers outside of Eastern Europe are South Koreans, Kazakhs, and Japanese, in that order. China’s smoking rate still lags behind Korea’s and Japan’s (1,711 cigarettes per person in China versus 1,958 in Korea and 1,841 in Japan), but China is the world’s largest overall consumer of cigarettes. As the country urbanizes and develops, don’t be shocked if they rise in the rankings.

• A 1998 study of Russian smoking habits found a direct correlation between cigarette and alcohol consumption rates and a direct correlation between smoking and exposure to “Western influences,” such as Western tobacco companies marketing cigarettes as symbols of a “glamorous Western lifestyle.”

• Americans rank right in the middle. The U.S. is ranked 34th in the available data, with about a thousand cigarettes consumed per person per year. We’re about tied with the Israelis, the Australians and the Irish.

• In this data set, poorer countries tend to be healthier. Sub-Saharan Africa and South Asia have some of the lowest smoking rates in the world. Indians smoke only 96 cigarettes per year per person. Ethiopians only 46. If Americans smoked like that, cigarette companies would collapse overnight, but health-care costs would drop dramatically as well; direct health-care costs related to smoking in the United States are estimated at $96 billion per year.

[Underdogger]

INVESTIGATION: Tobacco giant, British American Tobacco, caught in intensive smuggling, corporate espionage

Following events in South Africa, the BBC in July 2008 aired a documentary, 'Bannatyne Takes on Tobacco', which looked at BAT's tactics in Africa and revealed that the tobacco multinational was breaking rules in Nigeria, Malawi and Mauritius.

Some people shunned counters such as New Toyo for reasons cited above....

[Stockerman]

Wow, i think New Toyo is going to have close to 25 cents cash once SAH fully winds down (before netting off any debts)

Every year, it adds about $40mil NET operating cashflow. Seems that Capex has stopped and New Toyo is going to be super cash rich...

$26 mil (at end of FY11 or start of FY12)
+ $30mil (say 25% of Net operating CF used up)
+ $55mil (from SAH)
= $ 111 mil of cash (by end of FY12).

Total debt/finance leases at group level (start of FY12)
= $74mil.

Net Cash (i.e. all debts pay off) = $37mil or 8.4 cents, out of NAV of 36 cents.
technically, debts are at very sustainable level and there is no real need to pare off debt to ZERO...

This is a total debt free company and has a monopoly hold on cigarette printing in the Asia Pacific regions with long term supply contracts with BAT, PMI, etc...
And it is only 27 cents...

I think it is a matter of time that big fund houses step in

[Underdogger]

if you refer to their capex for the 1st 9mth of this year, it was only a meager $2.4mi. As stated by Tien Wah in its AR 2011, capex expansion has been completed and it is going to reap the benefits like milking a cashcow

So, actually, most of the net operating CF can be used as cash reserve.
this will bring the net cash level to even higher level at around 10 cents by end of FY12 and when SAH fully winds down.

27 cents (market value) - 10 cents of cash = 17 cents.
Does the intrinsic business of EPS (3.5 to 4 cents) only worth 17 cents, and we are talking about a debt-free company having a monopolistic hold on cigarette packaging and printing....
Pls ask this question to yourself

Wow, i think New Toyo is going to have close to 25 cents cash once SAH fully winds down (before netting off any debts)

Every year, it adds about $40mil NET operating cashflow. Seems that Capex has stopped and New Toyo is going to be super cash rich...

$26 mil (at end of FY11 or start of FY12)
+ $30mil (say 25% of Net operating CF used up)
+ $55mil (from SAH)
= $ 111 mil of cash (by end of FY12).

Total debt/finance leases at group level (start of FY12)
= $74mil.

Net Cash (i.e. all debts pay off) = $37mil or 8.4 cents, out of NAV of 36 cents.
technically, debts are at very sustainable level and there is no real need to pare off debt to ZERO...

This is a total debt free company and has a monopoly hold on cigarette printing in the Asia Pacific regions with long term supply contracts with BAT, PMI, etc...
And it is only 27 cents...

I think it is a matter of time that big fund houses step in