New Toyo

[Stockerman]

Tien Wah said it would rationalize its land holdings as well as investment properties...

Sale-and-leaseback deal would impact on long term profitability. U get one sum of money back to boost near-team earnings but you will lose out on the long term. Just look at Ausgroup case below.

So, dont expect New Toyo NAV to be adjusted higher because of re-valuation of land holdings, etc. it is all bullshit...


*************
DMG & Partners Securities has called AusGroup's sale-and-leaseback deal of its Singapore fabrication facilities to Boustead Singapore "a poor deal" that "boosted the company's near-term earnings, but at the expense of its long-term profitability."

The deal would see AusGroup sell the property to Boustead for S$39.4 million, and lease the property back until May 14, 2025.

AusGroup and Boustead had provided two different valuations of the property - S$21.7 million and S$44.6 million respectively - using different parameters.

"While there is a 55 per cent divergence in both companies' reported market values, we think (Boustead's) higher S$44.6 million estimate makes more economic sense," said analyst Lee Yue Jer, who maintained a "sell" on the stock at an unchanged target price of S$0.33 a share.

"It seems to us that the sale reflects a price below the property's actual fair valuation and a leaseback at high yields."

Boustead's approach was "more economically meaningful", he said, compared to AusGroup which has committed itself to 12 years' rental with a definite cash outflow.

AusGroup had estimated that it would enjoy a net gain of A$14.5 million from the sale, but Mr Lee estimates that although the group could recognize a profit of A$5 million for FY14, it would also incur A$2 million in net rental cost over the next 12 years.

AusGroup was trading at S$0.375 at about 10.25am on Friday, down one cent from Thursday's close.

[paullow]

whether wat tienwah does with it investment properties is not the crux of placing a dollar in new toyo.

the crux is people will not stop smoking. thus there will be sustained demand for tien wah printing and hence NT profit line.
the point is that NT has been INCREASINGLY profitable for the past decade, and unless something drastic happens eg pple stop smoking etc, i don't forsee the next decade that NT will not repeat this similar performance.

[Underdogger]

Emerging markets such as Africa and Asia Pacific (Phillipines, Vietnam, Indonesia, China, Pakistan, etc) will continue to see increasing number of people smoking due to increasing population and increase in disposable income...

New Toyo will continue to be around for the next CENTURY or so....
Smoking is one of the SIN industries that has been around for thousands of years...

[Underdogger]

http://www.irishtimes.com/business/secto...-1.1456932

British American Tobacco returns to Myanmar after 10 years
BAT left the country following an ‘exceptional’ request from the British govenment to stop doing business there in 2003


More good news for Tien Wah/New Toyo.

[Underdogger]

Tobacco giant back after ten-year absence .
Tuesday, 09 July 2013 13:52 Mizzima News - Mizzima News E-mail | Print | PDF .Tobacco giant British American Tobacco returns to Myanmar after a ten-year absence from operations in the country.

In 2003 campaigners managed tosuccessfully force the world’s second biggest tobacco companyto leave because of criticism from the British government, in particular from former British Prime Minister Tony Blair and Conservative MP and former deputy chairman of BAT, Ken Clark.

BAT said in a statement released on Monday that around USD 50 million will be invested in the next five years to establish a world-class manufacturing facility that will produce London, an ‘iconic brand of international prestige and quality’.

The joint venture company, British American Tobacco Myanmar Ltd, with I.M.U Enterprise Ltd (IMU), which will manufacture, distribute and market BAT’s brands for the domestic market.

IMU is part of a leading local conglomerate, Sein Wut Hmon Group, which has an extensive fast-moving consumer goods distribution network throughout the country.

Rehan Baig, Managing Director of British American Tobacco Myanmar Ltd, said,‘Historically, British American Tobacco had a market leading position in Myanmar which we are aiming to rebuild with our partner. The country has strong opportunities for growth and with the re-entry, we are very keen to offer consumers an attractive range of international quality products and brands through responsible marketing. The joint venture gives us a very sustainable and long term position in this growing economy.’

BAT also claimed they will employ approximately 400 people to begin with and we also intend to collaborate with local farmers to improve their yield and quality of local tobacco.

Nicandro Durante, Chief Executive of British American Tobacco said, ‘We are truly excited with the post-sanctions development in Myanmar and are keen to play an active part in the country's economic and social advancement. Our ability to build strong positions in emerging markets such as Myanmar, is one of our key strengths as the one of the largest international tobacco companies in the world.

Sao Khun San Aung, Managing Director of IMU, said, ‘We are very pleased to have British American Tobacco as our partner. I believe that together we have the right mix of global and local expertise in manufacturing, sales and distribution to help expedite the growth of the local economy.’

According to The Financial Times, shares in BAT rose 1.6 per cent to £35.37, outperforming a rising FTSE 100 index.

[greengiraffe]

Buy BAT directly...

Tobacco giant back after ten-year absence .
Tuesday, 09 July 2013 13:52 Mizzima News - Mizzima News E-mail | Print | PDF .Tobacco giant British American Tobacco returns to Myanmar after a ten-year absence from operations in the country.

In 2003 campaigners managed tosuccessfully force the world’s second biggest tobacco companyto leave because of criticism from the British government, in particular from former British Prime Minister Tony Blair and Conservative MP and former deputy chairman of BAT, Ken Clark.

BAT said in a statement released on Monday that around USD 50 million will be invested in the next five years to establish a world-class manufacturing facility that will produce London, an ‘iconic brand of international prestige and quality’.

The joint venture company, British American Tobacco Myanmar Ltd, with I.M.U Enterprise Ltd (IMU), which will manufacture, distribute and market BAT’s brands for the domestic market.

IMU is part of a leading local conglomerate, Sein Wut Hmon Group, which has an extensive fast-moving consumer goods distribution network throughout the country.

Rehan Baig, Managing Director of British American Tobacco Myanmar Ltd, said,‘Historically, British American Tobacco had a market leading position in Myanmar which we are aiming to rebuild with our partner. The country has strong opportunities for growth and with the re-entry, we are very keen to offer consumers an attractive range of international quality products and brands through responsible marketing. The joint venture gives us a very sustainable and long term position in this growing economy.’

BAT also claimed they will employ approximately 400 people to begin with and we also intend to collaborate with local farmers to improve their yield and quality of local tobacco.

Nicandro Durante, Chief Executive of British American Tobacco said, ‘We are truly excited with the post-sanctions development in Myanmar and are keen to play an active part in the country's economic and social advancement. Our ability to build strong positions in emerging markets such as Myanmar, is one of our key strengths as the one of the largest international tobacco companies in the world.

Sao Khun San Aung, Managing Director of IMU, said, ‘We are very pleased to have British American Tobacco as our partner. I believe that together we have the right mix of global and local expertise in manufacturing, sales and distribution to help expedite the growth of the local economy.’

According to The Financial Times, shares in BAT rose 1.6 per cent to £35.37, outperforming a rising FTSE 100 index.

[paullow]

if one takes a long position of 5-10yrs, even now, both BAT n NT presents attractive oppirtunities for entry.
the key point is that the no of smokers will increase with time n the market share of the above companies does not go down. i see both of them repeating their past 5-10y performance in the next 5-10yrs.

not vested. (as against smoking)

[Stockerman]

Is New Toyo going to do "Rights issue" again since it needs to buy many new equipment to cater for the expanding markets in the Philippines and Myanmar?

Every time it expands it business, it needs to come back to shareholders for monies? Not a very sustainable business model...
There is currently not much spare capacity in Tien Wah...

[paullow]

though i am not vested in NT, i beg to differ.
its the individual profile of the investor that matter.
for shorties who look at bids constantly to those having a few yrs of investment frame, yes, to them, it might seem so. but to the long term investor having 5-10y of holding, i think it's sustainable and worth the time.
so it depends on what type of investor one belongs to.
imo.

[portuser]

Is New Toyo going to do "Rights issue" again since it needs to buy many new equipment to cater for the expanding markets in the Philippines and Myanmar?
Every time it expands it business, it needs to come back to shareholders for monies? Not a very sustainable business model...
There is currently not much spare capacity in Tien Wah...

Between 2009 and 2011, Tien Wah spent RM75m buying three new printing machines and enhancing an existing one. No printing machine was bought in 2012.
In his review for 2013, Tien Wah Group GM states the following:
"Our group remains well positioned to seize new business opportunities and particularly so for the tobacco segment."
Taken together, Tien Wah may have some spare printing capacity.
Machine acquisition to cater for higher sales should not be frowned upon. The capacity expansion helped Tien Wah's group profit to surge to RM40m in 2012 from RM19m in 2010.
Tien Wah is in a position to pay for additional machines with internally-generated cash (group profit of RMB40m and non-cash expenses of RMB27m).
Tien Wah low gearing (RM55m net borrowings against RM303m group equity) makes it easy to obtain additional loans should internally-generated cash be insufficient.
Shareholders' experiences with the simultaneous rights issues by New Toyo and Tien Wah (in 2010) have been pleasant and they may not mind a repeat.