29-11-2010, 07:28 AM
Everybody vested in this company? The share price has been stagnant for years now. Is it a good share to buy? I know that PSC Corp is a major shareholder of the company.
(30-11-2010, 08:34 AM)Musicwhiz Wrote: [ -> ]Hi,
Noted that gross margin is 18.5% for 1H 2010, against 19.1% a year ago. Gross profit improved 34% to S$13.5 million.
Net margin, however, is only 4.4% for 1H 2010 (fairly low) and finance costs also increased 45%. ROE is about 11% if I annualized 1H 2010's profit number.
Balance Sheet looks fairly decent with the Company in a net cash position of about S$8.7 million.
FCF was about S$6.2 million for 1H 2010, and for 1H 2009 there was also +ve operating cash flows and FCF.
Probably I will need more time to dig into other aspects of the Company before being able to comment further, but this is just my initial review.
(27-07-2011, 07:14 PM)karlmarx Wrote: [ -> ]they have been generating the highest internal returns for psc, amongst all of psc's business. from its roe and book value, tat seng offers remarkably good value. unfortunately, there seems to be little interest in tat seng's shares and probably the only way to unlock its value is for psc to scoop up the remaining one-third float.
dydx Wrote:Tat Seng with a growing and large-enough business operation in PRC now could be attractive to others bigger in the same trade of corrugated paper or other packaging products. The potential suitors could be from PRC, Indonesia, Taiwan, etc.
dydx Wrote:We mustn't forget that CEO Loh See Moon holds a 15% stake in Tat Seng, and when he thinks about his retirement he should also be thinking about selling his stake. A trade sale together with PSC's 63.95% controlling stake will trigger a GO which will quite surely help realize fair value for minority shareholders as well.
(28-07-2011, 11:20 PM)d.o.g. Wrote: [ -> ]Cardboard manufacturing is a capital intensive business. This means you need scale to drive down per-unit costs.
Tat Seng is tiny compared to Chinese manufacturers. For 2010, Tat Seng booked $153m in sales, equivalent to RMB 750m. For comparison, there are 2 large cardboard makers listed in Hong Kong: Lee & Man Paper and Nine Dragons.
For the year ended 31 Mar 2011, Lee & Man booked HKD 14bn in revenues. For the year ending 31 Dec 2010, Nine Dragons reported RMB 21bn in revenues. In other words, the major manufacturers are 15-30 times the size of Tat Seng. It is hard for Tat Seng to compete, at least in China.
In this kind of commodity product business, anyone can expand by buying more equipment. Customers can be poached by pricing lower.
dydx Wrote:Tat Seng, on the other hand, is merely a producer of corrugated paper boxes and related packaging products/solutions selling to end industrial customerss, including many prime-name MNCs and OEMs of a wide-range of consumer goods.
dydx Wrote:The production equipment required - corrugating, printing, die-cut and finishing machines - are not very high-cost items.
dydx Wrote:A large and well-established base of prime-name customers acquired over time is a valuable asset for such kind of business.
dydx Wrote:the use of competitive pricing to penetrade new customers.
dydx Wrote:chances are that Loh may look for a good-enough trade buyer for the entire Tat Seng group at a good-enough exit price for him and PSC. This possibility should not be ruled out at all. For all his efforts growing Tat Seng's presence and business in PRC to the present scale in the last few years, Loh deserves a fair reward and a decent return on his stake in Tat Seng.
(29-07-2011, 03:57 PM)d.o.g. Wrote: [ -> ]dydx Wrote:Tat Seng, on the other hand, is merely a producer of corrugated paper boxes and related packaging products/solutions selling to end industrial customerss, including many prime-name MNCs and OEMs of a wide-range of consumer goods.
I stand corrected. It would seem Tat Seng is a customer rather than a competitor to the cardboard manufacturers.
dydx Wrote:The production equipment required - corrugating, printing, die-cut and finishing machines - are not very high-cost items.
Therefore the low entry barrier remains a problem.
dydx Wrote:A large and well-established base of prime-name customers acquired over time is a valuable asset for such kind of business.
dydx Wrote:the use of competitive pricing to penetrade new customers.
If Tat Seng can get new customers by pricing cheaply, it follows that competitors can do the same to Tat Seng. It also means that price rather than quality is the main concern for customers, not a good omen for profitability.
dydx Wrote:chances are that Loh may look for a good-enough trade buyer for the entire Tat Seng group at a good-enough exit price for him and PSC. This possibility should not be ruled out at all. For all his efforts growing Tat Seng's presence and business in PRC to the present scale in the last few years, Loh deserves a fair reward and a decent return on his stake in Tat Seng.
I am not saying a trade sale is impossible. I am simply saying that it is easier for Loh to sell his stake to PSC than to engineer a trade sale, and that if he succeeds in selling to PSC, minorities are not guaranteed to get the same deal.