Trade Line is just like Account Payable. Instead of old the supplier, the companies convert the Letter of Credit into Trust Receipt.

Trust Receipt (TR) is a type of short-term import loan to provide the buyer with financing to settle goods imported under Letter of Credit where title of goods is held by the bank. Under a TR arrangement, the Bank retains title to the goods but allows the buyer to take possession of the goods on trust for resale before paying the Bank on TR due date. TR financing is applicable to goods imported under documentary credit.

Benefits of trade line is enjoy credit terms pre-approved by the Bank, with principal and interest only payable on maturity so that Buyer’s working capital or cash flow is not tied up and can be deployed for other business purposes.

Normally higher trade line usage will be associated with higher business volume. Unlike Term Loan / Overdraft where the money will be used for working capital / overhead or capital expenditure.

Didnt see cold eye. As at 30 March 2018, cold eye hold 4,900,000 shares. (Audited Report 2017)

Ltg100y. Mexico plant will start operation by 1st Quarter 2019.

The milk powder division is building up their brand name now and slowly increase the production . Therefore high marketing cost in the AR and QR.

Hi all

Some note taken from the AGM

1) The company prefer stronger Ringgit when making purchase because the bank facilities are in USD. The company prefer weaker Ringgit when selling to customers because the Price is quoted in USD.

At this moment, the company prefer weaker ringgit because the bank facilities is less now as compare to sales.

In fact, the sales volume of Q1 2018 is higher than Q1 2017 but because strengthening of Ringgit therefore the revenue ad profit do not increase accordingly

2) In 2017, the company incurred impairment loss on receivable amounted to RM8.1mil. This is because the shipment to Yamen was stucked at the port due to war. The customer refuse to pay and the case went into court. The company has arrived at a settlement amount out of court with the customer. However, the details will be announced later.

3) Rising cost of labor and material is a going concern of the company and the manufacturing industry. They will review their price every 3-6 months to pass on the cost to the customers if necessary.

4) Setting up a new plant in Mexico was because of the transportation cost to their customers is too high and it is higher than their net profit margin. The new plant can shorten the shipment period and improve the profit margin.

5) The milk powder division is running at the capacity of 30% because the company new time to build up the brand name. One of the brand name is "Alpha Milk" which you will not see in major hypermarket like Tesco and Giant because they do not want to compete directly with big brand like Nestle and etc. The company supply mostly to rural / felda area where people are more sensitive to price.

6) The main raw material of the business is various milk powder which the company import mostly from New Zealand . The increase of the price of raw material has affected their profit margin as mentioned in the AR & QR.

7) The company has total labor of 200 pax and 40% is foreigner labor. Due to increasing of labour cost, the company is planning to increase more automation in the production process. However, some of the work will still need human labor to do.

Regards

ColdEyes recommended 4 companies in his new book 2018

3A
JHM
Hovid
Johotin

The CAPEX for expansion are as below
2013= RM16.8mil
2014= RM12.6mil
2015= RM25.3mil
2016= RM10.4mil
2017= RM16.9mil

Revenue & Profit as below
2013= RM241.4mil ; RM20.50mil
2014= RM316.8mil ; RM13mil
2015= RM417.4mil ; RM17.3mil
2016= RM441.2mil ; RM35.4mil
2017= RM475.4mil ; RM26.6mil

Revenue growth by about 200% and profit about 30% in 4 years.

I am accumulating for long term. Buy and look at the price again after 3-5 years.

Setting up a new plant, installation , commissioning of new plant take times.

I was told there are installing the machine n equipment in the new plant and the doubtful debt have been fully provided.

U may call to the investor relation department or ask them in the AGM to verify.

In the most recent 5 years, Johotin has spent total CAPEX of RM82mil for expansion.

Which is more than sum total of net profit for 2015 + 2016 + 2017 = RM79mil.

The business owner will only spent such a big amount of CAPEX if there is potential to grow and the company has the intention to grow.

As at end of Dec 2017, the new plant still haven't started to contribute to the company revenue and bottom line as per confirmation with the investor relation department.

Refer to Master ColdEyes book in 2018, normally the result from expansion of Johotin could only be shown after 1-2 years from the completion of the expansion. Johotin is one of the 4 companies that ColdEyes identified as growth company that he mentioned in his new book.

The 3rd QR 2017 also mentioned that Able Diaries Marketing started its operation since 3rd quarter 2017 therefore more distribution cost needed for start up.

The full year result of 2017 if add back the provision for doubtful debt of RM8.2mil, the NPAT will be RM34.8mil = EPS 11.22 cents

Looking at the potential revenue growth from the expansion, the projected 2018 EPS would be 15 cents.

If PE 10 = RM1.5
If PE 15 = RM2.25 (For F&B sector and growth company)

Just sharing my point of view.

Hi I wrote to them as the explanation in the quarterly report is unclear.
Anyway, you can also attend AGM to clarify the same or wait for the audited report.

That was a specific provision. They are in opinion that one of the customer unable to pay back.
So they has taken 2 quarter to make provision that they will not be able to collect back all the debts.

They has stopped the supply to this customer since beginning 2016.

If in future they manage to collect back then will be reversal profit. But let's not hope for something uncertain.

Just Base on the earning prospect itself, the current price is very attractive.

Vested interest. Do your own due diligence.

The main reason that affect the company profit is the provision for doubtful debts. Without the provision the profit should have been increased.

What if there is another provision in 4th Quarter??? I have confirmed and they said all the receivables have been fully provided. So no more provision in 4th quarter.

Lets wait and see the 4th quarter resullts.

Low PE but revenue and profit also keep growing. Furthermore, cost of fund keep reducing by issuing Sukuk to replace revolving credit, overdraft and term loan. Therefore, we can expect the profit margin keep on increasing.

Hi Muthu

Step as below:

1) Call tricor 03-27839299 to get the warrant conversion form. They will email to you.
2) Bring along the warrant conversion form and go bank to buy bank draft.
3) Submit the form together with the bank draft to Tricor office at Bangsar South. (The address is in the form). Prepare cash RM21.20 for conversion fees.

Wait for 8 days from the date of submission for the mother shares to be listed in Bursa.

All the best!

http://asianbankingandfinance.net/retail-banking/news/3-implications-banks-financials-when-mfrs-9-takes-effect-in-2018

JOHOTIN WA deeply under value. Buy WA will be much better than buy mother share

Magnitech's revenue mainly was from exporting apparel to US market.
The President-Elect Donald Trump's inauguration is scheduled for Friday 20 January 2017. And he has commited to quit TPP on the date he take the office, so might impact the future revenue of Magni.