New Toyo

[Stockerman]

Chairman of New Toyo bought 200 lots at 29 cents around April 2013. Up to now , it is still at about the same level ... Did he buy for the special dividend or what ?

[Stockerman]

http://www.fool.com/investing/general/20...bacco.aspx

Prognosis seems bad for New Toyo - Will it still be around in the next 5 to 10 yrs?

Goldman Sachs has estimated that e-cigs could reach $10 billion in retail sales over the next several years, accounting for more than 10% of the whole tobacco industry volume and 15% of profit. This is not a fantasy. It's a projection based on current growth rates and the low penetration of the product.

[Stockerman]

http://www.amcor.com/businesses/tobacco_...aging.html

Tien Wah's R&D seems to be still lagging behind that of Amcor...
Never heard about R&D being mentioned at all at New Toyo's AGM....

Also, can New Toyo "pressure" Tien Wah to pay out more dividend to New Toyo?

[Underdogger]

My sense is New Toyo might be preparing for something big in China. To date, BAT/PMI have yet to seize a sizable portion of the local market. So, my guess is there will be a number of subsidiaries below this Nanning Shen Jiu Packaging Materials (Investment Company).

a. "The biggest single market is China, where the industry is state-owned, with some 350 million smokers who account for more than 40 per cent of the global total."

b. “Key to the Future”: British American Tobacco and Cigarette Smuggling in China"
http://www.plosmedicine.org/article/info...ed.0030228

c. British American Tobacco's tactics during China's accession to the World Trade Organization.
BAT was extremely active during the progress of China's entry into the WTO. The company focused its lobbying efforts on two main players in the negotiations: the European Union (EU) and the US. Because of the negative moral and health issues related to tobacco, BAT did not seek public support from officials associated with the WTO negotiations. Instead, BAT lobbyists suggested that officials protect the interests of BAT by presenting the company's needs as similar to those of all European companies. During the negotiation process, BAT officials repeatedly spoke favourably of China's accession into the WTO, with the aim of presenting BAT as a facilitator in this process and of gaining preferential treatment from their Chinese competitor.

Why Nanning?
Nanning is the provincial capital of Guang Xi, in close proximity to emerging markets such as Vietnam, Myanmar, Thailand, Laos, Cambodia, India, Bangladesh and Pakistan.
Currently, New Toyo Group has 11 units of commercial lots at Hui Dong International Plaza, Nan Ning City.

Any idea what these 11 units are for?

hi curiousparty, thks for pting this. may I ask u humbly what is an investment holding company? I guess u r rite to say it is not gg to be a production centre.

based on the name - Nanning Shen Jiu Packaging Materials , maybe they r gg to acquire some packaging related entities in nanning?

[Stockerman]

e-cigs are burgeonging in US and UK... And they are coming a big comeback to TV ad!!!

With more and more e-cig, the need for traditional paper packaging will be greatly reduced...

http://www.blucigs.com/how-it-works-starter-pack

http://www.dailymail.co.uk/news/article-...ead_module

[pianist]

Why Nanning?
Nanning is the provincial capital of Guang Xi, in close proximity to emerging markets such as Vietnam, Myanmar, Thailand, Laos, Cambodia, India, Bangladesh and Pakistan.
Currently, New Toyo Group has 11 units of commercial lots at Hui Dong International Plaza, Nan Ning City.
Any idea what these 11 units are for?

these are stated as investment properties.
nanning or the greater guangxi is a place of green. so it is nearer to the source of paper..and u r rite, it is only about 8-9 hours coach drive from nanning to Hanoi.

[Underdogger]

Interesting article.

Why Warning Labels May Increase Cigarette Sales: Psychological Scientists Explain How Side Effect Warnings 'Backfire'

It seems that there is NO WAY to stop people from lighting up

http://www.medicaldaily.com/why-warning-...ide-effect

[Stockerman]

New Toyo has dropped below the 29 cent level bought by Chairman...probably bad news coming up soon..fingers crossed.. Gave only 0.8 cent dividend but today drop 2 cents....

As I have mentioned before many times , it is not sustainable above 30 cents ....

[Underdogger]

Since "interim special dividened" and "interim regular dividend" had both been paid out, it is now time for the "final special dividend" as well as "final regular dividend"...

[Stockerman]

Resurfaced the following Nextinsight article...
Final special dividend coming

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

http://www.nextinsight.net/index.php/sto...nd-to-come

Written by New Toyo investor
Monday, 08 July 2013 07:00
NEW TOYO: Another round of special dividend to come?
A shareholder of New Toyo contributed the following article:


GOING BY the posts in Valuebuddies.com forum, investors seemed to have ruled out New Toyo International paying a special dividend from the asset sale proceeds from its associate, Shanghai Asia Holdings.

Therefore, the 3 July announcement by New Toyo of a special interim dividend of 2.28 cents a share, ahead of its half-year results announcement (in mid-Aug), would have come as a surprise to those investors.

I will discuss the prospects of another special dividend later as I would like to now share some salient points about New Toyo, which many readers are probably unfamiliar with.


There has been no analyst coverage on New Toyo for many years, and the company's results announcements and annual report do not disclose much about the operations.

It is not surprising that New Toyo has been viewed by many as not being investor-friendly.



New Toyo International's results.Since its listing in 1997, at a subscription price of 80 cents, New Toyo (recently traded at 32 cents) has made a number of investments that did not provide sustainable profits. Because of this, the company has been viewed as being not savvy despite the subsequent divestment of the sub-par investments.



With rationalisation, New Toyo now has two business segments -- the production of specialty paper and printing of cigarette cartons.



The printing business, undertaken by 53%-owned Tien Wah, is significant, contributing the bulk of New Toyo's profit.


The emergence of Tien Wah as a major printing concern is interesting.


Before 2007, Tien Wah competed with New Toyo for printing jobs.

Tien Wah is an established printer listed on Bursa Malaysia but it had only one factory (in Malaysia). New Toyo had two low-cost factories in Vietnam but they lacked track records.


New Toyo's acquisition of Tien Wah in 2007 and putting Tien Wah in charge of the two factories in Vietnam transformed Tien Wah into a formidable player.


In 2008, Tien Wah bought from the British American Tobacco (BAT) its printing firm in Australia and became the exclusive printer serving four BAT markets for the next seven years.


But just when Tien Wah was about to enjoy steady profit from the exclusive contract, BAT decided to refresh the packaging of its products more frequently.

Frequent changes of design result in fewer cartons being produced in each print run and a high proportion of machine time is wasted in setting up the system before print runs are carried out.


As the short-run printing was not anticipated, Tien Wah had to outsource some jobs, at high costs, while awaiting the arrival of new machines it had ordered. Tien Wah's profit was poor in 2009 and 2010, but picked up strongly thereafter.



BAT has also recently required Tien Wah to lower the rate of printing defects to the point of near perfection. Tien Wah is responding well to this requirement, according to its annual report.


It would seem that BAT's stringent requirements have provided Tien Wah the opportunity to demonstrate its capability for higher performance.


New Toyo's other investments in the past may have led many investors to view the acquisition of Tien Wah negatively. But based on Tien Wah's annual reports and results announcements, Tien Wah has done well.



There are concerns that the 7-year business agreement with BAT may not be renewed on expiry in Dec 2015. However, I believe that if Tien Wah maintains its cost advantage and continues to respond to BAT's new, stringent packaging requirements, there are reasons to be optimistic.

Special dividend 2 coming?



New Toyo can be expected to declare the usual interim dividend (0.8 cent a share last year) when it announces its 2013 half-year results in mid-August. The company has consistently paid an interim dividend.

Coming back to the special interim dividend that was declared this month (July) --- there are been speculation as to whether there will be another round of special dividend as the special interim dividend of $10m is a small fraction of asset sales proceeds amounting to $57m..



New Toyo Group (which includes Tien Wah) would still have $14.3m net cash after paying out the special interim dividend on 22 July.

As Tien Wah's net borrowings amount to $21.8m. New Toyo's own net cash would be $36.1m (ie $21.8 m + $14.3 m).


This is a hefty sum as New Toyo's specialty paper business does not consume much capital.

Tien Wah has strong cash flow (annual profit of $16m plus $11m depreciation/amortisation) and is not reliant on New Toyo for funding despite the net borrowing of $21.8m.

In the light of all this, I am hopeful that another special dividend would be paid in the future by New Toyo.