Insiders have the advantage to react faster. However, not everyone is smart and be able to read the meaning behind the figures. Some of them might have done the wrong decision too quickly due to this advantage. The real world is full of fun.

Hi Uptrending, looking at the figures I feel that Wistron is pulling away some order which they thought not to be shared for long-term but only temporary coorperation according to agreement. However, it seems to me that FPI is able to replace these orders with higher margin product from other customers, which is a good thing that we should be happy to see it (normally only strong product command a higher margin and strong product usually come with a brand owned by an excellent company).

I don't think so. Probably a temporary setback due to fear and confusion. But price will quickly stable between 3.30 and 3.50. If you study back a few of previous quarter report, you'll find out that earning without counting forex loss or gain is quite stable in the range of 7.xx to 10.xx sen per share, including 2022 Q4. Those who studied carefully won't get surprised and do panic sell. But there are groups of people who thought 12.xx and 17.xx sen quarter EPS were purely driven by customer order and projected very high growth rate and rate the stock at RM 5++ or RM 7++ might be caught in the trap that they setup for themselves. These people might be panic due to over position in this stock and got into a panic. The shares will change hand from these people to conservative investors.

Some people are scared. There are lots of small shareholders in this counter and therefore price is more volatile. Current price is fair if one wants to buy, althought not "wonderful". I think the chances of price getting lower is smaller compare to the possibility of going up further. Upside opportunity is higher than downside risk.

Investors have been caucious these few days, which is good for healthy share price growth in future.

I think Q4 profit will be very close to Q3, maybe slightly more. Let's see.

It is not impossible to achieve by end of 2023 or early 2024 but a bit challenging for now.

If EPS Q4 could achieve close to 10 sen or much better than I have predicted, the price may reach RM 4 and above.

Target price RM 16.50 in next 3 years.

Current price may not be attractive if cukai makmur continue...

Yes, possible

The shallow dip of price despite moderately high volume shows that there are solid support to the price and that support is not likely from unimformed shareholders because this is not a hot stock. In other words, I suspect that the support come from "smart money".

Hi Lionel Messi, I estimated the Q2 EPS by using my own model and assumptions. With that level of estimated / true EPS, I think it is good to hold and perhaps slightly increase the stakeholding when the price dip to 8.70. This is because:
i) the dividend is in the up trend
ii) earning has basically recover post-Covid 19
iii) the PE is still cheap probably because of investor's memory about the big impact during MCO but MCO has came to past and this one-off incident/effect is gone and investor's confidence will recover after another 1 or 2 quarter showing steady / solid revenue and earnings. When this happen, PE and share price will improve to above PE 10
iv) I'll further improve my model of performance estimation based on latest quarter report and I feel that there might be positive factors towards next quarter earning in the brew.

On 30th Jan I predicted Q2 EPS 25 sen, now the actual result revealed is 23.38 sen. Should be quite close right? :)

Could it be a news purposely done to encourage investors to sell? So far it is just a plan, could be called off anytime soon right? Based on technical chart, this had triggered fear and the price once dip to nearly 8.70 at large volume but very soon got a strong rebounced, is this a war between the uninformed and informed? Look at the price movement and volume, I suspect someone is trying to control the price slightly below 9 by buying more but selling less but intense at the closing time. The purpose of doing this I guess is to collect the shares at below 9.

Another thing worth noting is that, tremendous reduction in sea freight compares to the past, is a very encouraging factor for exporting heavy goods like tiles. The big fat profit margin of the supply chain value just appear like that without needing to do anything.

Earthquake in Turkey, I think has destroyed far more houses than that destroyed in Russia-Ukraine war. And there will still be a series of earthquakes at the same region in following years according to geologist. Rebuild of the area will need a lot of tiles. This may create a spillover effect to the Asia Pacific market.

This is my opinion on the new porcelain tile plant:
If the plan to invest 400 mil for a new porcelain plant can be executed with IRR of 4.55%, annual EPS might be increased by 4.45 sen. This investment may cost net cash per share to shrink by RM 1.27 per share to become around RM 3 per share. This is a better option to invest the cash when compare to money market fund that generates return at only around 1.05%.

I estimate:
2022 Q4 EPS is 7.xx sen due to slow down of customers' sales
dividend is 25 sen
fair price is RM 3.57
FPI share price after 2022 Q4 result will be more stable than before, fluctuating around the fair price

Russia-Ukraine war, it doesnt matter who won the war. As long as the war is ended, sunflower seeds oil and crude oil supply from Ukraine and Russia to the global market will flow more efficiently than during war time. That's why it will give a big impact to other commodity such as palm oil. Although UP sell the goods via future contract, it will still be affected though the effect may come later. As for use of nuclear weapon, the chances are almost zero because of 2 reasons: (i) Putin is not yet insane / phychologically ill and still possess clear conscious (ii) The total loss / consequence to use nuclear weapon is greater than total gain of using it. The outcome of the war has a long-term and massive effect to the fundamentals of all plantation company and is something going to show up very soon. It will have an impact to the investment return if you are considering to buy now or near future whether you like it or not. The risk to buy now is definitely much higher than one or two months ago.

Hi Stockraider, we were talking about tile business

Hi Dhando, do you expect 2022 Q4 both revenue and net profit to be significantly lower than 2022 Q3?

FPI's performance in the short-term will be ultimately relying on the sales of the end product of its 3 major customers. In the long-term, in addition to that it will also include its ability to secure new customers or projects with reasonable profit margin. The future of the industry where FPI is participating is bright. However, the long-term success of FPI depends on its strength compares to other contracted manufacturers. Lack of transparency in this area may hinder quite a lot of investors from taking the risk to invest and hence the low PE.

What I'm afraid is he's not facing a local taikors now, but the one from China, big one.

Those who are buying for the final dividend, the dividend is already priced in. Speculators are already waiting for the time to dump, anytime when the dividend is announced, and definitely before the ex-date of the dividend.

Key success of investing in this kind of stock is to buy at low prices with very good patience to wait for the right price. When more people appear here to sing praises and when prices hit record high it is time to be careful and conservative.

Ukrain-Russia war may end very soon when Ukraine starts to deploy many advanced Western tanks in the battle field in Mar where the Russian ground weapon has no match to it. Once the war is ended both the crude oil and edible oil price will be corrected quite substantially. In fact this trend has already started. Though UTDPLT is a good company but its performance is still very much depends on the commodity price which is subjected to change according to major events in the world.

The tile business is so intense that manufacturers are cutting each other's throat

Hi Lionel Messi, according to my own calculation, it is possible that the amount of tile that Guoco consume might be able to take up all the supply from Guocera at the present stage but not sure after expanding to 3x of current capacity. However, the present tile business might be operating at tight margin. However, starts from FY2023 this will greatly improve and further improve in FY2024 due to a specific reason. No matter how, motorcycle business will remain the major contributor to the revenue and profit.

It was the top but not sure if it remains the top

Guocera market share could be the top in Malaysia. But I'm not sure about its profitability.

Turkey and Ukraine a bit far. Ransport fee will be very expensive for heavy goods like tiles. Don't think it is competitive to export to these destinations unless customers are willing to pay for it but people in these regions are not rich.

Hi Lionel Messi, how much net profit you think Guocera contributed to FY2022?

But I think this dip of confidence will not last long due to what is going to happen:
1. Announcement of excellent Q2 result by end of Feb (I predict Q2 EPS to be around 25 sen)
2. Those scared investors will realise that the cash to invest in Guocera is only about a quarter of the total cash accumulated.
3. Higher final dividend to be announced in May
4. Once the new plant is completed and operate by end of 2024, EPS will increase. And when EPS increases, dividend payout is likely to increase to keep the same payout ratio. The effect of higher EPS and dividend that occur at the same time is likely to make a double strike on the share price where market will re-rate this stock at higher PE.
So any investor who want to invest in this counter should wait for the above four events to complete, and decide later whether it is worthy to hold on to the share after the predicted rise in mid or late 2025.

I once thought that release of this news could stir up fear in some investors and that will create a buy opportunity. Looks like that now.

I think lots of shareholders are afraid of the investment in Guocera expansion. The plan is still a proposal that has not yet been decided, as far as I know. I somehow have the feeling that this plan will not be materialised in the end and annual dividend payout will increase to 65-70 sen per year. If the expansion is cancelled, if I were Tan Sri Quek, I might consider to sell Guocera away, and the proceed and the accumulated cash pile will be distributed out, at least partially, to a healthy level.

This counter needs a lots of patience. Put only a little bit of chips on this counter so that you don't run out of patience.

Let me guess... 12 sen EPS and 30 sen dividend

After Ukraine - Russia war, a lot of tiles may be needed for rebuilding the country.

What I hope the most is payout the 400 mil to us. If they do not want to pay out, then better invest in something with 10% IRR or higher. The worst is to keep the 400 mil until our last day.

In Malaysia, Yamaha has the biggest market share and it has been so for years.

He could have thought of that when he was much younger. If he did recently, he had just lost a good opportunity to do so in last year when HLIND was hit by pandemic and stock price dip unreasonably. Now the industry is experiencing strong rebound. The earning in current fiscal year has a very good chance to break record high. It was hard and is only going to be harder to privatise this company. My personal view is that HLIND is still too small to worth his energy, time and patience to do so. I think he'd only pick the big game like Guoco eventhough he failed at last. At the age of 82, I don't think he has the time and need to do this either. The best choice is to cheer with minority shareholders and make everyone happy like the late Tan Sri Teh did.

I feel that HLIND is led by management and owned by major shareholder who are focussing on the profitability and stability of the business only rather than market cap and liquidity of the share. I don't think they would even spend a night to think about bonus issue. But higher ordinary dividend and a better than history special dividend is something more likely to happen. The large pile of cash, I predict that it would be released in next 5 years either in the form of dividend or business expansion (e.g. the plan to expand Guocera). The reason is very simple, if you can't find a good investment opportunity even in a recession, why continuing holding the cash beyond the reasonable level? Other than that I actually hope one day Hong Leong Yamaha and Guocera can be listed seperately to maximize the total market cap. I just don't see the synergy and value to put motorcycle and tile business under the same group. It is currently being like that probably because Guocera is not big enough to be justifiable as a seperate listed company but this could be different when the RM 400 mil expansion takes place. It is about two times the current property, plant and equipment of the Group.

Hi Ykloh, the price of this stock is very sensitive to the dividend amount. A small increase of dividend will cause the price to grow significantly. This is also partly due to its lower floating tickets (which is reflected by its lower trading volume also). One year later you might want to recall this.

Hi Messi, according to the above news, 700,000 motors could have been sold in Malaysia in 2022. I think the real figure is above 680,000 or around that. In addition to that HLIND is planning to build 400 mil new porcelain plant (Guocera expansion) and complete it by end of 2024. I believe this will be funded internally and only costs a fraction of its net cash. Though HLIND did not disclose the IRR but I expect this to result in the increase of EPS by above 10 sen annually. Although main markets might be heading to recession but energy crisis in Europe for the present and coming years might be a golden opportunity for high energy consumption industry in Asia such as Malaysia which has the access to both the advanced technology to meet EU standard and cheaper energy prices.

Basically it says that record motorcycle sales (Malaysia) observed in 2022.

Hi Messi, just use Google translate. I think Google can translate better than I do. :)

High energy prices in Europe makes our tiles more competitive in international market. Don't forget that Italy and Spain are top 5 export countries in the world. They are both hit with high energy cost and yet their sales are intact, that shows how high is the demand.

https://www.enanyang.my/%E8%A6%81%E9%97%BB/%E6%91%A9%E6%89%98%E8%BD%A6%E5%95%86%E6%80%BB%E4%BC%9A%E4%BB%8A%E5%B9%B4%E9%94%80%E9%87%8F%E6%96%99%E5%88%9B%E6%96%B0%E9%AB%98

In 3 months time it may drop back to RM 14.xx because next year profit likely to be not as good as this year.