New Toyo

[Stockerman]

Tapering might start as early as September. This is the concensus in the market...
A lot of counters going to drop big time, especially those with heavy gearing (S chips, REITs, etc....)

[Underdogger]

New Toyo is debt free.

The debt is at Tien Wah level, and there might not be the need to further pare down any more debt. Very strong cashflow from cashcow business.

Out of the 61mil cash, 47mil is with New Toyo or 10.7 cents. New Toyo can easily pay out a 2nd round of special dividend without any sweat.

http://www.tienwah.com/FinancialHighlights.htm

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Breakdown Value of New Toyo

a. 54% Stake in Tien Wah market price at 2.52 RM = 53.5mil SD (cash if sold off in open stock market)
b. 34% stake of SAH = 34% x 160mil = 54.4 mil SD (cash)
c. New Toyo’s own investment properties = $27mil (market valuation as at Dec 2012)
d. New Toyo's own specialty paper business = Valuation of 5 cents
e. New Toyo’s 49% stake in MEIL – Valuation of 10 cents

Total = 45 cents in all.

(a) to (c ) are already 30 cents.


By paying only 30 cents for New Toyo (current share price), one is essentially getting (d) and (e) FOC.
This is before taking into account the redevelopment potential of land/properties held by Tien Wah.

MEIL's valuation is under-appreciated by Mr Market. It is an ingenious set-up by New Toyo to cream off commission from all printing/packaging at Tien Wah's factories before being sent to clients (e.g. BAT, PMI, etc).

Let's put aside the historical baggage and look forward. What had happened is the past. Based on the last 2 AGMs, I am positive of the new CEO (George) and I strongly believe he would bring New Toyo back to its former glory days.

The specialty business has rebounded strongly, and New Toyo is looking to expand their printing/packaging businesses in China as well as MENA (Middle East and North Africa), one of fastest growing regions in the world. Being in a net cash position, New Toyo is in a very strong financial position to expand its businesses.

Looks like new CEO is doing ok job, with re-awarded contract and stable cash flow generation at about 1 cent per quarter, should be no problem to support at least 2 cents/quarter div, which comes to 6.67% at 30cent price. $0.008 interim div also announced for october not bad.

Cash is now 61 million, 46%+ of market cap and debt is coming down nicely, now less than 10% of market cap.

Can continue monitor, at current price is not affording much margin of safety. But with the cash level now, lowest would be down to 15 cents

I will be buying towards end of year if the FED really taper the bond buying in SEP. We should see some good correction action...

[Curiousparty]

Why doesn't New Toyo further increase its stake in Tien Wah? Is 54% the optimal holdings given that MEIL is already 49% owned by New Toyo as well? (i.e. effective holdings in MEIL is 76%)?

[Underdogger]

You might have realized by now that although on paper New Toyo owns 54% of Tien Wah's equity, with MEIL, it has managed to secure the bulk of Tien Wah's group profit (in the range of 60 to 70%). Hence, there might not be a need for New Toyo to up their equity stake in Tien Wah. They have already "creamed' off the bulk of Tien Wah's profit.

With 47mil cash on hand and a very stable stream of cashflow, just to put things in perpective, $47mil can be used to pay the regular dividend for the next 6 years.

Why doesn't New Toyo further increase its stake in Tien Wah? Is 54% the optimal holdings given that MEIL is already 49% owned by New Toyo as well? (i.e. effective holdings in MEIL is 76%)?

[Stockerman]

I would have to agree that Smoking is very unlikely to be a sunset industry, at least in Asia Pacific region. The following 2 articles would show one how powerful these tobacco companies are, and the apparent high-handedness of their strategies.


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How a secretive trade deal could help American tobacco companies hook new smokers
http://www.washingtonpost.com/blogs/wonk...will-help/


As global brands trumpet arrival in newly-opened Myanmar, tobacco giants slip in sans fanfare
http://www.greenfieldreporter.com/view/s...o-Frontier

[Underdogger]

After looking at all the S-chip sagas (companies with "great earnings" but do not pay out even a bit of their dividends), New Toyo indeed looks like a very safe haven play with lots of consistent dividends (regular + special) year after year...

1.7 cents over 29.5 cents = 5.7 %
EPS is still set to grow and dividend will set to increase
and not to forget the recent special dividend of 2.28 cents, and more to come...

[pianist]

Actually for those who lost big time in s-chips, this is the counter that may cure and recuperate the loss by milking on china smokers' spending. as the saying goes, sometime U lost some, sometime U made some.
I bet some of those who engineered and ochestrated big time plot to con sg investors by listing their s-chips probably smoking cigars comfortably at their clubhouse, meeting rooms, with packaging supported by our nt here.

[Stockerman]

Buy New Toyo to "exact revenge" ?
hope the Chinese smokers smoke more...

Actually for those who lost big time in s-chips, this is the counter that may cure and recuperate the loss by milking on china smokers' spending. as the saying goes, sometime U lost some, sometime U made some.
I bet some of those who engineered and ochestrated big time plot to con sg investors by listing their s-chips probably smoking cigars comfortably at their clubhouse, meeting rooms, with packaging supported by our nt here.

[paranoid]

why is this stock not dropping ? I'm waiting to buy.

[pianist]

Buy New Toyo to "exact revenge" ?
hope the Chinese smokers smoke more...

for once, this unethically 'unhealthy' counter is doing its good.

as they once said - use posion to rid poison.