@ Itg100y, considering the volume data in since August 2017 to the present, there was not really significant numbers of shares traded compared to 2014.

Well researched! Thanks for sharing

hi Multibagger, thanks for visiting my blog! I plan to create an investment case with simulation model for UCHITEC

ronnietan,

1) Jura is not a publicly listed company, they do not disclose much about their financials. I'm not sure if they have interim results

2) My intention here is to use Jura's sales as an indicator for the automated coffee machine sales trend in Europe. Jura is a pure coffee machine maker; other brands may or may not disclose their coffee machine sales. Nonetheless, if Jura is doing well, I speculate that other manufacturers like Krups is doing well too

3) You're right. I also believe that Jura has few suppliers to diversify their business risks. But I speculate again that UCHITEC is the major one. On the other hand, Jura is not the only customer of UCHITEC who supplies to many other brands like Krups.

4) It's a good observation. Assuming Jura is the only customer of UCHITEC and vice versa; inventory has to be taken into consideration to understand the sales relationship between these two companies, in addition to currency exchange rate. That is, Jura might have run down their inventory to meet demand. I think we need volume data to understand more

I think the current price (RM 620m) does not fully capitalize the growth prospect. If you apply 4% as cost of capital and the assumptions I made in this post, then the value of SCGM is RM 946m.
A 34% bargain!

@stockmanmy, i share the same opinion. The depreciation charges and fix costs due to the new production facilities start on the first day of its service life, even though its capacity is far from fully utilized. It probably takes some quarters to achieve its normal level of margin.

@stockmanmy, I suppose you read its Q4 management discussion about its operating margin. Do you mean you doubt it or you have another thought?

@Jay,

1) Admittedly, I do not have much insight in profit margins because I didn't research it. As valuelurker already pointed out, oil price and, thus, raw material costs could explain gross profit margin improvement in the past two years; however, it could not explain those in in 2008 and 2009 when the oil price was significantly higher than today. Anyway, my opinion is that profit margins are NOT the limiting factors to SCGM growth but the production capacity. According to SCGM management guidance, EPM assets would be doubled in around next five years. As you also pointed out, 15% net profit margin is considered to be bullish; then how could we expect profit margins could be double in the next five years?

2) You're right. Two points from me. First, the production capacity expansion plan is taken from SCGM management. I just follow and "trust" them and, true, I could not judge whether they are bullish or not. Second, I did not explicitly assume that production capacity utilization is 100%; utilization is implicitly assumed in EPM assets turnover which I assumed to be 6.0, within historical range.

3) If all executions are according to SCGM's plan, it should be.

4) thanks for your suggestion

@valuelurker, critical comments are useful! Below are my thoughs:

1) To actually simplify the model, I have to leave out other assets irrelevant to capacity-led growth model. So, only EPM assets are kept. I did not claim anything new for the empirical relationship between EPM assets and Sales

2) Indeed, if I think raw material price like resin is the limiting factor to SCGM future growth, then I could have built another model called cost-led growth

3) It is also possible I combine both capacity-led and cost-led to form a "hybrid" growth model. Then, it would be really more complicated

@nekosan, which "1 to 4" did you refer to?