23-07-2014, 02:14 PM
Lehman's brother HAD more than 150 years of history.
maybe I am more pessimistic. In this world of business, "Change" is the only constant.
Amvig (pure tobacco printing and packing) performance has been quite consistent.
maybe I am more pessimistic. In this world of business, "Change" is the only constant.
Amvig (pure tobacco printing and packing) performance has been quite consistent.
(23-07-2014, 01:39 PM)heifien91 Wrote: [ -> ]To phrase it as 'justify holding onto' seems a little too strong. For a company to be established in 1975 and undergone all the ups and downs within this period, you have to give management some faith. It is undeniably that recently, New Toyo have experienced some problems, however, it is more like an industry level problem rather than company specific.
(not vested)
(23-07-2014, 01:15 PM)Curiousparty Wrote: [ -> ]How do u justify holding onto New Toyo when the printing profit had been deteriorating since Q3 last year?
In fact, Q1-2014 was even worse off compared to the Q1 2 years ago when they had included some one-off admin cost. Compared to Q1 last year, it was off by so much.
this does not seem to justify the claim that the business is resilient? Am I right?
Tobacco manufacturing is resilient because they can pass on drop in volume in the form of price hike to consumer, so overall the revenue (higher price x lower volume ) is still higher than before because the elasticity of demand is inelastic.
But this cannot be said for the printing industries supporting the Tobacco makers
Any drop in printing volume will hit them straight in the revenue and profit margin since economies of scale is totally lost, and unit cost will be jacked up. If this plain packaging fire were to continue spreading, I'm sure the printing volume would decline further. The entire dynamic might be changed.
This decline in printing revenue had been explained by Tien Wah in its FY13 Annual Report and this trend seems set to continue in an environment where regulatory risks are skewed against printers like Tien Wah/New Toyo.
(22-07-2014, 02:39 PM)level13 Wrote: [ -> ](21-07-2014, 11:19 PM)Curiousparty Wrote: [ -> ]Although New Toyo/Tien Wah might have a few pieces of "under-valued" assets scattered here and there, I realized that these would take many years before their value would be realized if any. There is a possibility that their value might never be realized at all, given that there is NO PLAN in the foreseeable future to go into property redevelopment.
This view was further reinforced/confirmed thru interactions with the management during the last 2 AGMs. The key focus is to serve BAT and not property redevelopment.
The one thing I truly learnt about New Toyo is that honestly there is no way for u to track its performance using information readily available from the market. Do u know how much does one printer print each day? The revenue or cost from one printer? Do u know how to derive the COGs for Tien Wah and New Toyo?
When i decided to invest in New Toyo, my decision was never on how they are gg to develop their properties or what is the output and cost of the printers. Even if you know the output and cost, how will that help in decision-making? In order to find out where New Toyo stands, you will need all the numbers from other similar competitors at an industry level. Such stuff are not accessible to most investors.
For me, the main points of New Toyo are:
- Strong cash flow generated Qtr after Qtr, cash pile building up
- no accounting tricks, not highly leveraged
- they are in a defensive and resiliant business
- contract with BAT which will ensure recurring revenue