New Toyo

[Stockerman]

NAV is just a theoretical estimate of net worth of company.

E.g. Can New Toyo go out tomorrow and sell off all its investment properties? Cannot
Can New Toyo sell off its Tien Wah business at one go ? Cannot.

In short, NAV is usually never realized for most companies, and it will never be realized if there are no other “bigger” investors interested and willing to buy over the companies and who can see value in the company. You and I can see great value in the company but to not much avail.

Just look at those S-chips. Many of them have share prices at steep discount to NAV. We are talking about deep discount of a few hundred %.

E.g. NAV = 50 cents; Share price = 5 cents.


Is it still possible for New Toyo to pay out 12.5 cents - I think it is quite IMPOSSIBLE...
Because it has used the 1st payout from SAH to pare down its debt....

So if New Toyo is already correctly "market-priced" now, any payment of special dividend will further cause its share price to drop, after the ex-dividend date. Be aware!

Net asset value is 36 cents, which is 9.5 cents above the current share price of 26.5 cents. If New Toyo were to pay dividends of 12.5 cents, then net asset value will fall to 23.5 cents.

Given that 1/3 of revenue/profit stream from SAH has been lost and perhaps 26 cents might have already included the 12.5 cents from SAH, isn't 26 cents already more than over-valued the counter?

26 - 12 = 14 cents.

14 cents over EPS (3.5 cents) gives P/E of 4, which seems rather reasonable, isn't?

Remember that this is a low profile, low liquidity counter and largely relies on Tien Wah for the bulk of revenue/profit. Anything happens to Tien Wah will be a deadly blow to New Toyo...

At 26 cents, the shares are under-valued. The financial year end is 31 Dec, so there will be dividends coming soon. The bidders at 26 cents may be waiting to buy at low price and sell when the dividends are declared.

Quite a huge bids at 26 cents (400 plus lots). Those tired of holding can start dumping