Taking into account the right issue, breakeven price should be around 16 cents. 518 x 28/ 882 = 16.4 cents. Still not too bad, considering the fat dividends New Toyo had received from SAH over the years..
Now, New Toyo is striking it out on its own with support from BAT, etc..
Think they have learnt valuable lessons from the SAH incident.
BAT might have "sweetened" the ground for Tien Wah/New Toyo as it did not want to be over-reliant on the incumbent printers (e.g. Amvig, etc) in China. It would rather nurture Tien Wah/New Toyo as they have proved to be dependent and reliable over the years of the exclusive supply contract.
With the aggressive acquisition spree by Amcor, all the more BAT wants to hasten the pace of nurturing New Toyo as a counterweight to Amcor. It was mentioned at AGM that the aggressive acquisition by Amcor was not to BAT's liking due to the monopolizing of the printing businesses, and the attendant higher cost of printings to BAT.
*************
Amcor has taken a big stake in Amvig.
http://www.amvig.com/eng/global/home.asp
AMVIG was established in 1998 and was listed on the Main Board of The Stock Exchange of Hong Kong Limited on 26 March 2004.
AMVIG is one of the largest and most profitable tobacco packaging specialist in the PRC with around 13% market share. The Company operates two core businesses - cigarette packaging printing and transfer paper and laser film manufacturing in the PRC.
(10-08-2013, 06:02 PM)pianist Wrote: [ -> ]what was the price nt exited sah?
I guess there are ppl then happily got ipo price at 0.28 and then forced to exit at 0.2, thus resulting in a sour bad memory?
(10-08-2013, 06:38 PM)Underdogger Wrote: [ -> ]Taking into account the right issue, breakeven price should be around 16 cents. 518 x 28/ 882 = 16.4 cents. Still not too bad, considering the fat dividends New Toyo had received from SAH over the years..
...............
New Toyo's investments in SAH took place in three stages.
The initial investment before IPO of SAH was at a low cost (the exact figure was disclosed in SAH's IPO prospectus).
In 2007(?), SAH issued some shares (priced at 28c apiece?) in exchange for New Toyo's stake in the aluminium foil business.
A couple of years later, SAH undertook a rights issue at 10c apiece (at a certain ratio I cannot recall now).
New Toyo's average investment cost in SAH may be lower than 16c.
Since now we are talking about the history of SAH, let's look at the figures
When SAH was still around, EPS was more than 4 cents ( FY11 - 4.51 cents; FY10 - 3.91 cents), New Toyo was trading at below 25 cents. Dividend was 1.94 cents.
When SAH was delisted, EPS dropped to only 3.37 cents (FY12), New Toyo was trading around 30 cents. For FY12, dividend droppped to 1.70 cents or 13% drop.
Does this make logical sense?
Is the valuation for New Toyo too rich now?
(11-08-2013, 10:10 AM)Stockerman Wrote: [ -> ]Since now we are talking about the history of SAH, let's look at the figures
When SAH was still around, EPS was more than 4 cents ( FY11 - 4.51 cents; FY10 - 3.91 cents), New Toyo was trading at below 25 cents. Dividend was 1.94 cents.
When SAH was delisted, EPS dropped to only 3.37 cents (FY12), New Toyo was trading around 30 cents. For FY12, dividend droppped to 1.70 cents or 13% drop.
Does this make logical sense?
Is the valuation for New Toyo too rich now?
There is an explanation to what you observed. Year to date many stocks have risen in market value. Yet many of these stocks that rose did not have an increase of EPS of the same magnitude. Mr. market merely assigned them a higher P/E valuation. This group of stocks like Kingsmen, SIA engg and ST engg have experienced a rise in p/e as well because their rise in market price has been faster than the rise in earnings YoY.
Another group of stocks like new toyo experienced a rise in stock price despite a fall in EPS. For New Toyo case, a year ago it was trading at 5.5x, now its trading at 8.8x. In addition, new toyo's price rise is due to the catalyst of it receiving cash from SAH, hence it is now holding more liquid assets (cash). Another SGX-listed coy, hupsteel has experienced the same thing as New toyo. While hupsteel full year EPS has fallen YoY, its share price has risen year to date. A year ago, Mr market gave it a P/e of 9x and this yr p/e is 19x. Again, this is due to a positive catalyst.
As for your question is new toyo valuation too rich now, it is up to each individual to interpret.
The cash from SAH was already part of New Toyo's existing NAV to begin with. So to be very accurate , New Toyo is not getting new cash from SAH. Any special dividend is paid from existing NAV and not additional/new NAV.
In summary, one is just getting money back from an existing pool of money.
There is catalyst for Hupsteel as it has become a quasi property counter play . There is no catalyst from New Toyo, but it was more of a bad news as it lost a good source of EPS from SAH.
CY09 Wrote:There is an explanation to what you observed. Year to date many stocks have risen in market value. Yet many of these stocks that rose did not have an increase of EPS of the same magnitude. Mr. market merely assigned them a higher P/E valuation. This group of stocks like Kingsmen, SIA engg and ST engg have experienced a rise in p/e as well because their rise in market price has been faster than the rise in earnings YoY.
Another group of stocks like new toyo experienced a rise in stock price despite a fall in EPS. For New Toyo case, a year ago it was trading at 5.5x, now its trading at 8.8x. In addition, new toyo's price rise is due to the catalyst of it receiving cash from SAH, hence it is now holding more liquid assets (cash). Another SGX-listed coy, hupsteel has experienced the same thing as New toyo. While hupsteel full year EPS has fallen YoY, its share price has risen year to date. A year ago, Mr market gave it a P/e of 9x and this yr p/e is 19x. Again, this is due to a positive catalyst.
As for your question is new toyo valuation too rich now, it is up to each individual to interpret.
The transference of the "value of a subsidiary" to that of "cash" under its balance sheet was seen as a positive move. Hence moving the stock price up.
When a perceived illiquid asset such as PPE are sold and then recorded for an equivalent amount under "cash" , quite often we will see the market re-rate it positively. This is because participants in the stock market anticipate the company will give a special dividend (as evident in the posts made on New toyo thread)
(11-08-2013, 04:59 PM)CY09 Wrote: [ -> ]The transference of the "value of a subsidiary" to that of "cash" under its balance sheet was seen as a positive move. Hence moving the stock price up.
When a perceived illiquid asset such as PPE are sold and then recorded for an equivalent amount under "cash" , quite often we will see the market re-rate it positively. This is because participants in the stock market anticipate the company will give a special dividend (as evident in the posts made on New toyo thread)
Even if no special dividend, a sale does help to stop the 'bleeding' from PPE depreciation. If the sale price is significantly higher than book, then it might affect market perception of its other PPE items. Perhaps if the buyer is doing the same business it would reflect in a good way on the seller's business as well (that its not a hopeless industry)
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.
Big Blue Chip counters (components of STI index) such as OCBC and DBS only have P/E of around 10 to 12.
OCBC - 9.8 times
Olam - 9.9 times
DBS - 10.8 times
UOB - 12.2 times
New Toyo currently has P/E of 9 ( 30 cents over 3.37 cents). If this is not over-valuation, "I really don't know what to say." (sounds familiar?)
There doesn't seem to be any near term catalyst for any upside swing. Even the securing of the specialty paper contract has not moved the counter ...
(11-08-2013, 03:06 PM)CY09 Wrote: [ -> ] (11-08-2013, 10:10 AM)Stockerman Wrote: [ -> ]Since now we are talking about the history of SAH, let's look at the figures
When SAH was still around, EPS was more than 4 cents ( FY11 - 4.51 cents; FY10 - 3.91 cents), New Toyo was trading at below 25 cents. Dividend was 1.94 cents.
When SAH was delisted, EPS dropped to only 3.37 cents (FY12), New Toyo was trading around 30 cents. For FY12, dividend droppped to 1.70 cents or 13% drop.
Does this make logical sense?
Is the valuation for New Toyo too rich now?
There is an explanation to what you observed. Year to date many stocks have risen in market value. Yet many of these stocks that rose did not have an increase of EPS of the same magnitude. Mr. market merely assigned them a higher P/E valuation. This group of stocks like Kingsmen, SIA engg and ST engg have experienced a rise in p/e as well because their rise in market price has been faster than the rise in earnings YoY.
Another group of stocks like new toyo experienced a rise in stock price despite a fall in EPS. For New Toyo case, a year ago it was trading at 5.5x, now its trading at 8.8x. In addition, new toyo's price rise is due to the catalyst of it receiving cash from SAH, hence it is now holding more liquid assets (cash). Another SGX-listed coy, hupsteel has experienced the same thing as New toyo. While hupsteel full year EPS has fallen YoY, its share price has risen year to date. A year ago, Mr market gave it a P/e of 9x and this yr p/e is 19x. Again, this is due to a positive catalyst.
As for your question is new toyo valuation too rich now, it is up to each individual to interpret.
(11-08-2013, 08:06 PM)Underdogger Wrote: [ -> ]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...