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How do you know BAT's grand plan?? Do you know someone from the management?

Why are you so certain supply contract period much shorter going forward?

Struggling?? Tienwah is still making money not losing...

Speculating about contract renewal is as good as speculating about NT divesting tienwah.


via Galaxy Tab S with Tapatalk
9mths into 2014, Tien Wah EPS had dropped by 45% (from 24 cents to 13 sens). Its share price had also dropped by 2.60RM to 1.90RM now.

I don't know anyone in BAT and the above is just my conjecture based on observations on tobacco packaging industry.

e.g. Specialty paper contract with PMI was only 2 + 2 (awarded in 2012 or 2013), compared with BAT's 7 + 3 (awarded back in 2008).

Pls refer to post #1340 .
tks.
Even though the supply contract with BAT has been extended by one year, there is still no news on whether Tien Wah can extend for another 3 years. If Tien Wah cannot match the cost structure of "of bona fide third party suppliers". does this mean that Tien Wah would lose the BAT contract?

But we have to further bear in mind that the profitability of the BAT contract(even if it is extended for 3 more years) has been declining by a great deal recently. Was there really an "economic moat" to start with??


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http://www.tienwah.com/2014%20Bursa%20An...ov14_2.htm

Announcement Details/Table Section :

References are made to the announcements dated 1 July 2008, 8 September 2008, 29 October 2008 and 31 October 2008 on the Proposed Acquisition and Proposed Joint Venture.

The Board of Directors is pleased to announce that on 13 November 2014, MEIL, a 51%-owned subsidiary of TWPH and 49%-owned by New Toyo International Holdings Ltd, the ultimate holding company of TWPH, incorporated under the laws of Hong Kong Special Administrative Region has vide confirmation letters with Tobacco Importers and Manufacturers Sdn Bhd (Company No. 4414-U), a wholly-owned subsidiary of British American Tobacco (Malaysia) Berhad (Company No. 4372-M) and British American Tobacco Marketing (Singapore) Private Limited, a company incorporated in Singapore under the laws of Singapore and a subsidiary of British American Tobacco International (Holdings) B.V. agreed to extend its current Supply Agreements (SA-BATS and SA-BATM, collectively identified as “SA-BAT”) for an additional one (1) year from the existing period of seven (7) years ending 31 October 2015 to 31 October 2016 for their printed carton requirements in Malaysia, Singapore and Vietnam for the domestic and/or export markets, with the Right to Extend the Supply Period for another three (3) years on terms no less favourable than what is offered by bona fide third party suppliers.

None of the directors and/or major shareholders of TWPH and/or persons connected with them have any interest in the Supply Agreements.


This announcement is dated 13 November 2014.
Bad news continued to stack up against Tien Wah and New Toyo...

http://www.ft.com/cms/s/0/00d59d84-59ff-...z3QuVw39BJ
(05-02-2015, 02:02 PM)Curiousparty Wrote: [ -> ]Bad news continued to stack up against Tien Wah and New Toyo...

http://www.ft.com/cms/s/0/00d59d84-59ff-...z3QuVw39BJ

BAT reports decline in tobacco volumes as smokers kick the habit

Kadhim Shubber
Total tobacco volume worldwide fell 1 per cent in the nine months to September 30

British American Tobacco, whose brands include Dunhill and Lucky Strike, reported a decline in tobacco volumes, as smokers continued to cut back and rivals battled for market share.

Total tobacco volume worldwide fell 1 per cent in the nine months to September 30. The drop was driven primarily by falls in the Americas and Western Europe, which tend to have tighter restrictions on tobacco than in emerging economies.
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In Australia the company increased the price of its cigarettes in September following a rise in taxes that month. Two weeks later it reversed the price rise after rival Philip Morris International decided not to follow suit, undercutting BAT, which accounts for about 60 per cent of the market.

BAT faced similar “competitive pricing activity” in Malaysia, the company said in Wednesday’s interim statement.

“In the markets this year there’s been a few skirmishes,” said James Bushnell, analyst at Exane BNP Paribas.

A strong pound hit BAT’s results, with reported revenue down 9.6 per cent in the nine-month period. Stripping out the effect of currency movements, revenue grew 2.4 per cent, which missed consensus expectations of a 3.2 per cent rise.

The share price initially dropped 4.7 per cent, the largest fall for BAT since 2011. It later recovered to close at £33.75, down 2.6 per cent.

Copyright The Financial Times Limited 2015. You may share using our article tools.
Please don't cut articles from FT.com and redistribute by email or post to the web.
could be just a reflection on how the global economy is going. Probably global economy "shrank 1%" just like tobacco volume Big Grin Maybe we have a new indicator of how the global economy is going...
"The global cigarette market is expected to shrink this year as more people quit smoking or switch to e-cigarettes and as a weak global economy curbs their ability to spend"

http://www.telegraph.co.uk/finance/newsb...alter.html

The emergency and spread of e-cigarette trend around the world may lead to the downfall of companies such as Tien Wah/New Toyo who relies mainly on tobacco printing..
Looks like Tien Wah/New Toyo's Q4 results would look very bad. New Toyo's 3 key markets (out of 4) have gone down the drain. Malaysia, Vietnam and Australia.


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(extract from BAT 9 mth 2014 results)
Cigarette volume from subsidiaries was 495 billion, down by 1.0%, with growth in many markets, including the Middle East, Bangladesh, Venezuela, Pakistan, Ukraine, Turkey and Indonesia, more than offset by lower volume in Russia, Vietnam , Brazil, Poland and Canada , mainly driven by industry decline. Total tobacco volume was also 1.0% lower.

The five Global Drive Brands’ cigarette volume was up by 6.2%, and their combined market share continued to grow strongly in the Group’s key markets. Dunhill’s volume increased by 3.5%, with good growth in Indonesia, Brazil and South Korea partially offset by market decline in Malaysia. Kent’s volume decreased by 2.7% mainly due to market contraction in Russia and Romania, partially offset by good growth in the Middle East and Japan.
Tien Wah's Q4 profit was much worse than expected. It had lapsed into loss!!!
Tien Wah had also cut its final dividend to only 4 cents from the previous 6.39 cents (or 37.5% drop!!!)

The full-year dividend had dropped to only 7 cents from 14.13 cents (or 50% drop)

So, New Toyo's Q4 result would be expected to be bad. It might even cut its final dividend...

http://www.bursamalaysia.com/market/list...ts/1879121
(16-02-2015, 09:42 PM)Curiousparty Wrote: [ -> ]Tien Wah's Q4 profit was much worse than expected. It had lapsed into loss!!!
Tien Wah had also cut its final dividend to only 4 cents from the previous 6.39 cents (or 37.5% drop!!!)

So, New Toyo's Q4 result would be expected to be bad.

http://www.bursamalaysia.com/market/list...ts/1879121

For someone not vested, thanks for monitoring this company so well.

Tien wah actually still had a profitable quarter which loss is from income tax expense which was more than profits. Still a profitable year overall. NAV for Tienwah has increased marginally too.

Dividend this year has been half of last year end so NT will have less earnings this time round.

New Toyo's Q4 result would be expected to be worse than last year but still profitable, that was already evident in 3Q result.

Dividend could still be maintained or cut. NT still has 69.87m cash and already has 1.95c EPS since 3rd quarter more than enough for 15c payout for 6% yield this year and probably next year as well.

Until Tienwah makes a real operating loss, NT would probably hold on. They could look for a buyer for NT as well.

*no need to get your panties in a bunch*