Avarga (formerly: UPP Holdings)

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#11
My takeaways from the AGM session a few moments ago:
Note: merely my interpretation, I could be very wrong.

1. Mr Tong thinks that it's now time to invest amidst the gloomy public or market opinions
They can't disclose the progress of deals they are on or looking at.
He reiterates the cash hoard and their willing to return the money to shareholder if they don't find good investment by end of the year.
My take is that it seems that they are likely have something already in their sleeve hence the situation of "wanna say but can't say".
But of course any deals can't be confirmed until it's finalized.

I personally speculate that it could be either an investment deal or deal on selling the current vacant (wasteful) industrial estate.

2. He reiterates that the 2 main business units are currently sustainable and hence the confidence of paying 1 cent every years from now on (at least until cash is needed for better deal).

3. He said that he views the company price as still undervalued.
Maybe he should buy more if so?

4. The company will not focus on any specific country or region.
Hence the world is their hunting ground.
But obviously they will not go to country they think they can't understand unless the deal is too attractive (obviously after due diligence).
He expects high return given the risk.

My take: Myanmar deal must be darn good for him to scoop it up.
Or merely speculation deal went lucky?

5. They focus on investment with good cashflows and not merely accounting profit.
As an example, he thinks they can get more profit from investing more money in paper unit (by buying better machines) but they won't unless the returns are high enough.

6. My personal take on Mr Tong as a candid big picture guy with big laugh and vision.
A person with self depreciating attitude and dare to make decision and take risk.
He thinks he is not that significant to the Company and it can run by itself given the strong foundation built.

<vested>
My views are your Gilbert & Sullivan's:
"The flowers that bloom in the spring, have nothing to do with the case".
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#12
2016Q1 is out!
http://infopub.sgx.com/FileOpen/UPP1QFY2...eID=402319

Net profit was down 78% as compared to last year.
Forex loss of S$2.7M as compared to gain of S$1.6M.
Mainly due to weakness in US$ (or so as stated as reason).

Operation numbers (gross margin & operating margin) however were improved.
Powerplant as steady as expected, while paper unit improving.

<vested>
My views are your Gilbert & Sullivan's:
"The flowers that bloom in the spring, have nothing to do with the case".
Reply
#13
(29-04-2016, 05:04 PM)ksir Wrote: My takeaways from the AGM session a few moments ago:
Note: merely my interpretation, I could be very wrong.

1. Mr Tong thinks that it's now time to invest amidst the gloomy public or market opinions
They can't disclose the progress of deals they are on or looking at.
He reiterates the cash hoard and their willing to return the money to shareholder if they don't find good investment by end of the year.
My take is that it seems that they are likely have something already in their sleeve hence the situation of "wanna say but can't say".
But of course any deals can't be confirmed until it's finalized.

I personally speculate that it could be either an investment deal or deal on selling the current vacant (wasteful) industrial estate.

2. He reiterates that the 2 main business units are currently sustainable and hence the confidence of paying 1 cent every years from now on (at least until cash is needed for better deal).

3. He said that he views the company price as still undervalued.
Maybe he should buy more if so?

4. The company will not focus on any specific country or region.
Hence the world is their hunting ground.
But obviously they will not go to country they think they can't understand unless the deal is too attractive (obviously after due diligence).
He expects high return given the risk.

My take: Myanmar deal must be darn good for him to scoop it up.
Or merely speculation deal went lucky?

5. They focus on investment with good cashflows and not merely accounting profit.
As an example, he thinks they can get more profit from investing more money in paper unit (by buying better machines) but they won't unless the returns are high enough.

6. My personal take on Mr Tong as a candid big picture guy with big laugh and vision.
A person with self depreciating attitude and dare to make decision and take risk.
He thinks he is not that significant to the Company and it can run by itself given the strong foundation built.

<vested>

Thanks for the info from the AGM. Btw, did he mention any changes in the new Myanmar political scene which would potentially affect their future venture in Myanmar?
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#14
Only to the extend that it's far smoother than his expectation. In fact they won GM distribution license previously but decided not to proceed. Why building up the brand from
Scratch then GM can take over in long run after the business succeed (if it's so).

For powerplant, it's unlikely to have such a good deal anymore. Especially with Japs coming in to bid (with its political will).

What i like is they assess the businesses & deals and when they don't make sense economically, they simply walk away.
My views are your Gilbert & Sullivan's:
"The flowers that bloom in the spring, have nothing to do with the case".
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#15
had a quick peek at the financials. doesnt look like the powerplant deal contributing that much to the earnings.

fundamentals wise, at current price, yield not that fantastic 4.65%, debt free, small cash pile 33% Mcap. No discount to NAV.

Earnings tiny and wont sustain the div payout and might go negative next quarter.

- doesnt make sense for me to buy this stock, i will also simply walk away Tongue -
Virtual currencies are worth virtually nothing.
http://thebluefund.blogspot.com
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#16
the cashflow from the power plant looks OK. But the power plant concession is depreciating every year.
So cashflow p.a. X number of years remaining < mkt cap?
"... but quitting while you're ahead is not the same as quitting." - Quote from the movie American Gangster
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#17
Correct me if I am mistaken, the cash-flow from the power plants can be seen from the 'Service Concession Receivables' in the cash-flow statements? This amounted to $11.6 million in FY 2015. Not too sure if we can further include O&M Income from the P&L Statement?

(Not Vested)
Disclaimer: Please feel free to correct any error in my post. I am not liable for anything. Do your own research and analysis. I do NOT give buy or sell calls and stock tips. Buy and sell at your risk. I am not a qualified financial adviser so I do not give any advice. The postings reflects my own personal thoughts which may or may not be accurate.
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#18
(03-05-2016, 06:28 PM)Nick Wrote: Correct me if I am mistaken, the cash-flow from the power plants can be seen from the 'Service Concession Receivables' in the cash-flow statements? This amounted to $11.6 million in FY 2015. Not too sure if we can further include O&M Income from the P&L Statement?

(Not Vested)

Hi Nick,

I have made an attempt to untangle the cash received from the power plant division in the previous page. Examples of how the accounting works were also attached in the post.

The $11.6 million you got is from change in receivables in the cash flow statements? I think it includes other receivables from the paper mill etc.
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#19
KUALA LUMPUR (Oct 5): Berjaya Corp Bhd (BCorp) is disposing of a 39.09% equity interest and C$52.91 million (RM166.5 million) worth of unsecured subordinated notes in Toronto-listed Taiga Building Products Ltd — Canada's largest independent wholesale distributor of building products — to Singapore-listed UPP Holdings Ltd, which is controlled by businessman Datuk Tong Kooi Ong, for a combined C$65.58 million (RM206.37 million) cash.

According to BCorp, the proposed disposals represent an opportunity for it to realise its entire investment in Taiga. The proposed disposals will result in a total net gain of about C$23.14 million (RM72.82 million) and it plans to use the proceeds for working capital.

Taiga is currently a 39.09%-owned associate of Berjaya Forest Products (Luxembourg) S.A.R.L (BForest), a wholly-owned subsidiary of BCorp. The Taiga group owns and operates three wood preservation plants that produce pressure-treated wood products. It also has 15 distribution centres in Canada and two distribution centres in California, the US.

http://www.theedgemarkets.com/en/node/307054
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#20
(05-10-2016, 11:24 PM)ngcheeki Wrote: KUALA LUMPUR (Oct 5): Berjaya Corp Bhd (BCorp) is disposing of a 39.09% equity interest and C$52.91 million (RM166.5 million) worth of unsecured subordinated notes in Toronto-listed Taiga Building Products Ltd — Canada's largest independent wholesale distributor of building products — to Singapore-listed UPP Holdings Ltd, which is controlled by businessman Datuk Tong Kooi Ong, for a combined C$65.58 million (RM206.37 million) cash.

According to BCorp, the proposed disposals represent an opportunity for it to realise its entire investment in Taiga. The proposed disposals will result in a total net gain of about C$23.14 million (RM72.82 million) and it plans to use the proceeds for working capital.

Taiga is currently a 39.09%-owned associate of Berjaya Forest Products (Luxembourg) S.A.R.L (BForest), a wholly-owned subsidiary of BCorp. The Taiga group owns and operates three wood preservation plants that produce pressure-treated wood products. It also has 15 distribution centres in Canada and two distribution centres in California, the US.

http://www.theedgemarkets.com/en/node/307054


Borrowing the spirit from the other company post: Up 17% today due to unexpected good news!

No offense, just kidding myself. Smile

I am not overly optimistic (or at all) about Taiga's prospect. It is commodity-like business with few barrier entries (if any).
The advantage of taiga is likely the lowest cost, economic of scale and distribution networks.
The first is probably the more substantial than the more important weaker second & third.

But at least the valuation doesnt look expensive to me and it comes with the immediate accretive earnings.

I noticed the company has notes paying 14% annually (it is stapled unit i guess and not unlike reit).
But i find it strange as the business should be rather cyclical (follows property cycle) and not of the stable cashflow.
In a glance (or several glances) from AR2003 till AR2016, it seems that they are able to pay the 14% and still churn out some profits.

Went through AR2003-2007, jumped to AR2016 and 2017Q1.
AR2004 is particularly interesting as the chairman (guess who? mr Tong) tried dramatically turning around the company (from the core itself).

Learn something new on the art of turning a company to a more owner-mentality cultured company.
My views are your Gilbert & Sullivan's:
"The flowers that bloom in the spring, have nothing to do with the case".
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