The greatest risk facing New Toyo/Tien Wah is definitely whether it can renew the supply contract with BAT.
For instance, just take Hutchison Port Holdings Trust.
Which is a safer bet? long term concession (Hutchison) or just a short 7-year supply contract (Tien Wah/New Toyo)?
Many researchers have predicted that the "Last Smoker" in UK would be in 30 to 50 years time (not too far from now), and in Japan (probably in 2100) due to its fast declining population. Even JTI (Japan Tobacco International) is trying to expand overseas. They know that Japan is a sunset market.
The number of cigarettes smoked globally will shrink by 9% between 2015 and 2050, predicts Euromonitor International, a market-research firm. But tobacco firms are adept at wringing fatter profits from stagnant markets.
On the other hand, for tobacco printing/packaging companies like Tien Wah/New Toyo that thrive on volume of cigarettes (unlike BAT who can raise prices of cigarettes) , this decline in the number of cigarettes will be a major minus for its long term prospect...
Less cigarettes being smoked will mean less printing volume...
http://en.wikipedia.org/wiki/Smoking_in_Japan
http://www.gallup.com/poll/156833/one-fi...e-low.aspx
The Chinese adage "Wealth never lives past 3 generations" is very true....
Young Gary's showing at the recent AGM was sub-par and his CFO got the NAV figure totally wrong!
This clearly shows she has not internalized the basic financial figures of New Toyo -
As a CFO, that should be your basic duties - a sure danger sign..
(26-05-2013, 02:18 PM)pianist Wrote: [ -> ]How young is young Gary?
Young Gary is 39 yrs ago. An Australian.....(banana man?)...
think u are right. this is the 3rd time New Toyo got stuck right below 32 cents level.
if cannot go down, it just mean that it has to go down first...
(22-05-2013, 08:23 AM)Stockerman Wrote: [ -> ]New Toyo hit 32/32.5 cents previously a few times.
TA wise, if cannot clear 32 resistance level, means that it would drop back below 30 cents...
(21-05-2013, 04:11 PM)gonggong Wrote: [ -> ]broken record..... yawnnn yawnnnnn
(21-05-2013, 04:03 PM)Stockerman Wrote: [ -> ]Wall of sellers at 32.5 cents....very strong resistance...
this is a very defensive counter. it definitely will not give you a few hundred % returns. it is a stable resilient play on tobacco industry.
Unless there is no future at all for tobacco, Tien Wah/New Toyo will always be around to give u a stable stream of dividend, much better than your local banks.
My prediction for FY2013 is as follows (before any special dividend payment, IF ANY)
a. NAV will increase to close to 40 cents level.
b. Cash level would probably hit at least 20 cents level.
c. full year EPS will improve from 3.37 cents to close to 4 cents.
d. Regular dividends will be restored back to previous level (before disposal of SAH), i.e. close to 2 cents. (i.e. forward dividend yield of 6.25%)
As BAT expands its markets in Middle East, Eastern Europe and Africa, it would probably require New Toyo to support. This will bring new sources of revenues/profit. think BAT is much better positioned than PMI in Africa. As highlighted at the recent AGM, company is evaluating the feasibility of setting up printing factories in that region of the world.
As long as population of the world is growing, these big tobacco companies are going to keep recruiting new troop of smokers every single day...
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Tobacco companies see Africa as fertile ground
http://articles.latimes.com/2012/dec/12/...g-20121213
Looks like New Toyo has great difficulties surmounting the 32 cents level - i expect it to drop back below 30 cents !
The advert of e-cigarette will eventually kill off traditional cigarette printing/packaging companies such as Tien Wah and New Toyo.
this is to say Tien Wah/New Toyo have "limited shelf lives" .....Tien Wah and New Toyo will become history when you visit the printing museum next time !
http://www.businessinsider.com/citi-disr...z2UpX4hJCm
The super dirty world of Tobacco.
Pleasure Reading!
http://www.icij.org/project/tobacco-underground
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Some extracts below:-
"The illicit trade is fueling addiction, say health experts, by making inexpensive cigarettes widely available, while robbing governments of sorely needed tax revenue. At the same time, officials warn, the booming black markets are fueling not only some terrorist groups but dozens of organized crime gangs, who find the big profits and low risk hard to resist."
"The backbone of this underground commerce — the acquisition of the cigarettes themselves — is by far the easiest part of the entire operation. The world’s four leading multinational tobacco companies, Philip Morris International, Japan Tobacco International (JTI), Imperial Tobacco, and British American Tobacco (BAT), have produced billions of excess cigarettes in Ukraine, fueling a teeming black market that reaches across the European Union. Today, Ukraine is rivaled only by Russia as the top source of non-counterfeit brand cigarettes smuggled to Europe, EU officials say."
"The numbers tell the story. Each year, Ukraine’s cigarette consumption and legal exports top 100 billion sticks, according to Ukraine’s Ministry of Health. Yet in 2008, tobacco companies manufactured and imported nearly 130 billion cigarettes — 30 percent in excess of what the local market can consume."
“Tobacco companies are benefiting from selling to smugglers,” says Kostyantyn Krasovsky, head of the tobacco control unit of the Institute of Strategic Research at Ukraine’s Ministry of Health. “They sell it to them at the same prices they sell to legal wholesalers.” Krasovsky adds that in dealing with smugglers, tobacco companies can potentially gain extra profits when a batch is confiscated by customs and destroyed. “It’s even better for them; another smuggler will come and buy the same quantity.”