Another profitable market (Vietnam) gone down the drain for Tien Wah and New Toyo.
Australia - sunset market
Vietnam, Malaysia - going into declining mode
*****
The Ministry of Health has proposed increasing the special consumption tax on tobacco from the current 65 percent to 105 percent in 2015 to discourage smoking.
Under the proposed hike, the tobacco tax would reach 145 percent in 2018 and 155 percent in 2018, the ministry said in a statement.
The increases aim at reducing the number of smokers in Vietnam by eight percent from 2012-2020.
According to the health ministry, the average age of smokers in Vietnam has become younger and the cheap price of tobacco is a contributing factor.
A recent survey by the Health Strategy and Policy Institute found that Vietnamese people spend about VND22 trillion (US$1.04 billion) a year on tobacco.
Widespread smoking is estimated to cost Vietnam up to VND23 trillion annually in treatment and diminished labor capacity.
Phan Thi Hai, spokeswoman of the Vietnam Steering Committee on Smoking and Health (VINACOSH), said up to 21.6 percent of people between 16-24 years old in Vietnam smoke.
“Many Vietnamese youths will suffer harmful consequences from smoking," she said. "Increasing taxes is an effective way to limit the number of smokers and significantly increase state revenues,” she said.
According to VINACOSH, taxes account for 41.6 percent of cigarette retail prices in Vietnam, a very low proportion compared to other countries in the region and the world.
The proportion is 80 percent in France, 73 percent in Germany and 60 percent in Australia.
In its plan on increasing the tobacco tax, the health ministry estimated that the proportion of male smokers in Vietnam will fall from a figure of 47.4 percent (recorded in 2011) to 39 percent in 2020.
Meanwhile, state revenues generated by the tobacco tax are expected to soar to VND9 trillion in 2015 and VND24.1 trillion by 2018.
The World Health Organization and World Bank recommend that Vietnam levy taxes of between 65-70 percent on tobacco to effectively limit smoking.
Nguyen Tuan Lam of WHO Vietnam dismissed concerns that the tax would prompt smuggling.
According to the Vietnam Tobacco Association, fluctuations in smuggled cigarettes are unrelated to tax policies.
“In Vietnam, the prices of most smuggled cigarettes are 30-40 percent higher than the same product manufactured locally,” he said.
so are you shorting the shares or plan to do so?
what is your position on this counter? vested, not vested, shorted??
http://www.bursamalaysia.com/market/list...ts/1753837
Is Tien Wah and New Toyo going to be sold off soon?
Mr Lim is the founder of David Lim & Partners LLP and has been the Managing Partner since 1990. He began his career at Rodyk & Davidson in 1982 with a focus in commercial litigation, corporate finance,
restructuring and mergers & acquisitions.
(01-10-2014, 07:04 PM)Curiousparty Wrote: [ -> ]http://www.bursamalaysia.com/market/list...ts/1753837
Is Tien Wah and New Toyo going to be sold off soon?
Mr Lim is the founder of David Lim & Partners LLP and has been the Managing Partner since 1990. He began his career at Rodyk & Davidson in 1982 with a focus in commercial litigation, corporate finance, restructuring and mergers & acquisitions.
Designated as director in the company means the company is going to be sold off soon meh ?
Mr Lim is also an independent director of several companies publicly listed on the SGX-ST, namely, G.K. Goh Holdings Limited, LH Group Limited. Then why are still listed now ?
(01-10-2014, 08:04 PM)cyclone Wrote: [ -> ] (01-10-2014, 07:04 PM)Curiousparty Wrote: [ -> ]http://www.bursamalaysia.com/market/list...ts/1753837
Is Tien Wah and New Toyo going to be sold off soon?
Mr Lim is the founder of David Lim & Partners LLP and has been the Managing Partner since 1990. He began his career at Rodyk & Davidson in 1982 with a focus in commercial litigation, corporate finance, restructuring and mergers & acquisitions.
Designated as director in the company means the company is going to be sold off soon meh ?
Mr Lim is also an independent director of several companies publicly listed on the SGX-ST, namely, G.K. Goh Holdings Limited, LH Group Limited. Then why are still listed now ?
Mr/Ms Cyclone, How come you got 7 stars? The only one with so many stars here. What does it represent?
This was how bad Tien Wah Q3 (traditionally best Q) was...
New Toyo might take another leg down soon...
*************
http://www.bursamalaysia.com/market/list...ts/1793513
Review of Performance
(a) Current Quarter against Previous Year Corresponding Quarter
Revenue
Group’s revenue for the third quarter ended 30 September 2014 reduced by 6.6% or RM6.3 million to
RM89.4 million from RM95.7 million in the preceding year corresponding quarter. The current quarter
results were affected by sluggish demand in certain cigarette brand related packaging products due to
increase in duties and prices in certain markets, changes in consumers’ pattern and increase in the
illegal trade volume. The weaker Australian dollar during the quarter also contributed to the reduced
revenue.
Profit before tax
Profit before tax of RM6.1 million for the third quarter ended 30 September 2014 was lower by RM6.2
million or 50.4% as compared to the preceding year corresponding quarter of RM12.3 million.
The aforesaid unfavorable results for the quarter were impacted by lower revenue as explained above
and lower gross profit margin as a result of change in product mix of products with higher cost of sales
and relatively lower selling prices.
The Directors are of the opinion that the Group will continue to face difficult market conditions which may
result in a weaker performance for the financial year. We continue to seek new markets, customers and
segment opportunities and to reduce cost to mitigate the impact.
3Q results ok. EPS 9 months is 1.95c, 3 months is 0.71c so Div payout of 1.5c (6% yield) is secure and sustainable for this year.
The Group's turnover increased by 12.8% to SGD78.01 million in Q3FY2014 (SGD69.15 million in Q3FY2013) mainly due to
higher revenue in Trading division partially offset by lower revenue in Printed Cartons and Labels division.
Gross profit was SGD9.98 million in Q3FY2014 compared to SGD12.58 million in Q3FY2013. Gross profit margin in
Q3FY2014 decreased to 12.8% compared to 18.2% in Q3FY2013. The change in sales mix contributed to the lower gross
profit margin.
The Group's profit before tax decreased by 32.8% to SGD4.70 million in Q3FY2014 (SGD6.99 million in Q3FY2013). This
was mainly attributable to lower gross profit.
Overall, the Group's profit after tax attributable to equity holders of the Company decreased by 26.7% to SGD3.12 million in
Q3FY2014 (SGD4.26 million in Q3FY2013).
Shortist should start covering their shorts soon.
The industry demand as a whole for tobacco packaging in many countries is actually shrinking, specifically the countries New Toyo/Tien Wah are operating in (e.g. Australia, Singapore, Korea, Malaysia, Vietnam)
When the whole pie gets smaller, there will be more intense rivalry amongst existing players (i.e. printers will try to undercut each other, etc). No economic moat to speak of.
Those gurus who continue to triumph that tobacco printing is very safe and secured really got to do some self-reflection and be honest with themselves.
There is no assurance that New Toyo/Tien Wah will continue to secure BAT contract. Printers are at the mercy of their buyers (i.e. BAT, PMI, etc). BAT can easily switch to other printers in China if New Toyo/Tien Wah cannot make the mark.
Tobacco printing is really a sunset industry in many parts of the world. Unfortunately, New Toyo/Tien Wah are not going into countries where number of smokers are still growing because of incumbent dominant players.
Value may emerge for New Toyo if it drops below 20 cents. It is still too expensive at 25 cents. Final dividend is likely to be cut since overall net profit has shrunk by 20 to 30%, following the cut in interim dividend.
If the remaining cash from the divestment of SAH is wasted on some silly projects (e.g. tissue paper business), NAV would take a deep dive to below 30 cents, and stock share is likely to plummet further.
Worst still if the company comes back to ask for money via another rights issue, similar to what it has done previously....
(15-11-2014, 11:51 AM)BlueKelah Wrote: [ -> ]3Q results ok. EPS 9 months is 1.95c, 3 months is 0.71c so Div payout of 1.5c (6% yield) is secure and sustainable for this year.
The Group's turnover increased by 12.8% to SGD78.01 million in Q3FY2014 (SGD69.15 million in Q3FY2013) mainly due to
higher revenue in Trading division partially offset by lower revenue in Printed Cartons and Labels division.
Gross profit was SGD9.98 million in Q3FY2014 compared to SGD12.58 million in Q3FY2013. Gross profit margin in
Q3FY2014 decreased to 12.8% compared to 18.2% in Q3FY2013. The change in sales mix contributed to the lower gross
profit margin.
The Group's profit before tax decreased by 32.8% to SGD4.70 million in Q3FY2014 (SGD6.99 million in Q3FY2013). This
was mainly attributable to lower gross profit.
Overall, the Group's profit after tax attributable to equity holders of the Company decreased by 26.7% to SGD3.12 million in
Q3FY2014 (SGD4.26 million in Q3FY2013).
Shortist should start covering their shorts soon.
(15-11-2014, 12:23 PM)Curiousparty Wrote: [ -> ]The industry demand as a whole for tobacco packaging in many countries is actually shrinking, specifically the countries New Toyo/Tien Wah are operating in (e.g. Australia, Singapore, Korea, Malaysia, Vietnam)
When the whole pie gets smaller, there will be more intense rivalry amongst existing players (i.e. printers will try to undercut each other, etc). No economic moat to speak of.
Those gurus who continue to triumph that tobacco printing is very safe and secured really got to do some self-reflection and be honest with themselves.
There is no assurance that New Toyo/Tien Wah will continue to secure BAT contract. Printers are at the mercy of their buyers (i.e. BAT, PMI, etc). BAT can easily switch to other printers in China if New Toyo/Tien Wah cannot make the mark.
Tobacco printing is really a sunset industry in many parts of the world. Unfortunately, New Toyo/Tien Wah are not going into countries where number of smokers are still growing because of incumbent dominant players.
Value may emerge for New Toyo if it drops below 20 cents. It is still too expensive at 25 cents. Final dividend is likely to be cut since overall net profit has shrunk by 20 to 30%, following the cut in interim dividend.
If the remaining cash from the divestment of SAH is wasted on some silly projects (e.g. tissue paper business), NAV would take a deep dive to below 30 cents, and stock share is likely to plummet further.
Worst still if the company comes back to ask for money via another rights issue, similar to what it has done previously....
[quote='BlueKelah' pid='100349' dateline='1416023494']
3Q results ok. EPS 9 months is 1.95c, 3 months is 0.71c so Div payout of 1.5c (6% yield) is secure and sustainable for this year.
The Group's turnover increased by 12.8% to SGD78.01 million in Q3FY2014 (SGD69.15 million in Q3FY2013) mainly due to
higher revenue in Trading division partially offset by lower revenue in Printed Cartons and Labels division.
Gross profit was SGD9.98 million in Q3FY2014 compared to SGD12.58 million in Q3FY2013. Gross profit margin in
Q3FY2014 decreased to 12.8% compared to 18.2% in Q3FY2013. The change in sales mix contributed to the lower gross
profit margin.
The Group's profit before tax decreased by 32.8% to SGD4.70 million in Q3FY2014 (SGD6.99 million in Q3FY2013). This
was mainly attributable to lower gross profit.
Overall, the Group's profit after tax attributable to equity holders of the Company decreased by 26.7% to SGD3.12 million in
Q3FY2014 (SGD4.26 million in Q3FY2013).
Shortist should start covering their shorts soon.
[/quote)
But those who subscribed to their last offer of rights have benefited well. Don't you think so?
As I said , value will come when share price drops below 20 cents, those who benefited are those who bought at 15 cents and not at 25 cents or 30 cents.