If Ajinomoto is priced at RM 15, HLIND should be priced about the same.

Hi zzprozaz, it is a good result as long as sales is more than 40,000 units. Anything above that is excellent. This is expected because lots of people trying to avoid the sst by buying before 1st Jan 2022. If every month can maintain 41,500 then annual EPS should be quite satisfactory.

Is FPI supplying anything to Flextronics Systems Penang?

The increase of minimum wages are always connected to very high exports. I believe government's faith and courage to increase the minimum wages mainly comes from the result of very good and sustainable export.

As a result, labor intensive and low productivity business will be flushed out over time. Service sector including restaurants and hotels will be more challenging. Leaders in the manufacturing sector that produces excellent products that help the productivity of the B40 and M40 (domestic and export) such as home appliances, motorcycles, furniture etc. will remain profitable and continue to enjoy growth because they are able to not only pass the cost to the customers but increases the price moderately as the purchasing power of the lower classes improve globally.

I'm expecting minimum 10 sen EPS for 2021 Q4

Hi Johnzhang, may I know where did you get this info
"FCPO average from Feb to Dec 2022 as at 7/2/2022 is $5,189"

To lure you selling

CPO heading to 6000

As for the number of workers, I don't have the info but I don't think 15k is the right number. The actual number could be A LOT smaller.

I believe HLIND (Hong Leong Yamaha) like many other companies that produces branded and quality products pay higher than minimum wages to retain skill and productivity. So the impact should be minimal. Also, raising of minimal income domestically means more B40 can afford motorcycles which is their favourite choice of transportation. Therefore I think the positive impact should be higher than the negative impact.

If I were FPI's customers, I would ask FPI to rush out more products to be shipped in 2nd half of Q1 2022 and Q2 2022, to secure the supply of goods. With so many travel restrictions, where can you enjoy your holidays? Use the air ticket money to buy some good audio to enjoy at home lah.

Hahaha. Maybe:
1. Majority of the people do not believe that
2. They have other information which make them believe otherwise
3. They would rather choose to verify this by themselve by viewing the next quarter report
As for me, I think FPI is still fine and picking up more orders.

I read from somewhere that Yamaha has been agressively increasing the number of motorcycle service centre in Malaysia but I couldn't recall the source of the information. Maybe someone else here could help.

"With growing demand for Yamaha's products, HLYM's capacity expansion plans were expedited to fulfil the piling orders and to meet the future growth of the business. Several new facilities have been installed and mass production commented in FY2021 to increase supply output. A new assembly line and inspection facility, equipped with the latest motorcycle evaluation technology, were installed to produce motorcycles of the highest quality." AR 2021.

Hi ZZProzaz, it is from people who works in this industry. I'm not sure what was the capacity utilisation prior to Covid 19 but I guess there has been some expansion done and in progress.

It is harmless with minimal cost especially when the earning is recovering. I think sales and profit in 2022 has a chance to outperform 2020, or achieving about the same.

Also, why would FPI invest and hold 22 hectare land just beside Wistron's factory?

But the order that Wistron gave to FPI in 2020 was not sikit-sikit. In addition, FPI's share valuation is not high, Wistron can buy the shares in the open market if she wants to rather than spending lots of money to build new plant. Could it be possible that Wistron is doing higher level assembly and this means FPI will be getting more contracted sub-assembly work?

If this trend continue there is a chance that goods to be shipped in 2022 may be touching the level of year 2020 or better.

Number of containers shipped has been increasing sharply in the past 3 months.

Hi Starship2, one more reason could be the declined of EPS in latest report QoQ. People are afraid that what happened on glove comoanies happens to plastic manufacturers. Maybe many of them are same group of investors who prefer to invest in cyclical stocks. For cyclical stock, you must learn when to run away. Unless the normal sales / demand is clear, they are very careful to put their money back to this stock.

Given the following situation:
1) 2 shift production (3 shift for certain models)
2) 10% to 15% downtime due to part shortage
3) hiring more operators
4) 80% capacity utilisation
I believe that:
1) demand of motorcycles is high and will remain high (new hiring won't happen just to fill back log)
2) critical part supply (could be chip) is hand to mouth situation due to tight supply and high demand at the same time
3) there's capacity to absorb increasing order and hiring more operators can then be making sense
All these together with other data, next quarter result will be very satisfying. I would be surprised if it is not.

Or we can, in the next AGM ask them to explain why they didn't publish the complete Q&A for last AGM.

Hi Observatory, I observed the same too. Actually there's one more thing about hiring of operators. Perhaps some of the info are sensitive to be disclosed. However I agree with you that they should at least give a proper explanation to us. Probably next time we can ask to change the share registrar company. According to the rule the minutes have to be signed by HLIND chairman before it can be published. Either the chairman has also not performed a good job at this or there are other problems we do not know.

And why Wistron has to compete with FPI at the same place here at Malaysia? Furthermore both are Taiwanese companies. Normally Taiwanese companies are known to cooperate with each other rather than competing with each other.

Hi Desmond, then, why Wistron bought up big shares of FPI?

Above QnA of latest HLIND AGM

The Group has been gradually declaring higher dividend payout over the years
with dividend yield around 5% at the current share price. The Group is likely to
continue to declare dividend on this basis.
6. The share of profit from Vietnam's associate has declined every year from
RM134 million in FY2017 to RM36 million in FY2021. Noted that the decline
has started before the pandemic. What are the root causes? What have the
Vietnamese management done to reverse the trend?
Response:
There was a strong competition on pricing in Vietnam market especially from the
major competitor. Yamaha Vietnam will be introducing a new scooter model and
this is expected to enhance the financial performance of Yamaha Vietnam.
7. HLI has exited the concrete roofing products and distribution of building
materials. The performance of the HLI in the future will be dependent solely
on the manufacturing and sale of consumer products comprising
motorcycles, spare parts and ceramic tiles.
With very strong balance sheet and strong cash reserves, can the
Board/Management provide some updates/guidance to shareholders on
expansion of current core business and potential new business that can
reduce its dependence on the motorcycle business in Malaysia and
Vietnam for its future growth.
Response:
Both ceramic tiles and motorcycles have great potential to grow their businesses.
The Group will continue to explore on new businesses, both in terms of organic
growth and inorganic growth. The Group will also continue to look for opportunity
for potential merger and acquisitions.
8. How is Vietnam e-bike to affect Vietnam’s motorcycle industry? Will it affect
Yamaha’s market share? Will Yamaha come out with e-bike in Vietnam?
Response:
E-bike market in Vietnam is still very early stage with only a few players involved,
this hence would not affect Yamaha’s market share for the time being.
Nonetheless, Yamaha Vietnam has included e-bike industry in its planning.

2020: RM652.66 million), while profit before taxation (“PBT”) declined to
RM6.2 million (1st quarter ended 30 September 2020: RM93.0 million). The
lower revenue and PBT was due to lower sales across all product segments
because of Movement Control Order (“MCO”), which caused the
curtailment of production for 2 months. (Quarterly Report for 1QFY22)
(a) With the gradual reopening and normalisation of economic activities, to-
date, how and to what extent has it impacted the orders for the Group’s
products?
(b) Has the Group’s current production level normalised?
Response:
(a) With gradual reopening and normalisation of economic activities, the orders
for the Group’s products have progressively improved towards the level prior
to the recent lock down.
(b) Although all our factories have resumed operation, there is continual
disruptions to our productions as a consequent of COVID-19, supply issues
and absence of workers due to quarantine.
4. The Group’s inventory has increased from RM212m in FY2020 to RM303m
in FY2021. What is the reason of the high inventory on 30 June FY2021.
(page 69, Statement of Financial Position)
Response:
The increase is mainly due to the increase in the CKD parts stocks in Yamaha
operations. As the CKD parts were ordered 3-4 months ahead, the stocks have
increased because of the continuous arrival of the CKD parts during FMCO
period while the production was curtailed.
5. Page 22 of AR states that "Earnings, capital expenditure requirements,
borrowings repayment, capital adequacy, dividend yield and other relevant
factors are considered by the Board in determining the actual dividend
payout."
As of June 2021, net cash plus money market fund was RM1.25 billion or
RM3.8 per share. The capex was only about RM50 million for FY2021.
As asked in previous AGMs, does the Group have any concrete plan to
substantially invest the excess cash in high return projects? Failing that,
can the Board set a date to return excess cash to shareholders? This will
help to increase the Return on Equity which has been declining.
Response:

1. Guocera Holdings Sdn Bhd Group’s new strategy is to move away from
ceramics to focus on the mid to high-end market segments for porcelain
tiles, particularly those with distinctive product features and concept-
based selling. The immediate and long-term plans are to broaden and
deepen market penetration for both domestic and international channels.
(page 19 of Annual Report 2021(“AR2021”))
Apart from key international markets like Vietnam, Thailand, Singapore and
Australia where the Guocera brand is well-recognised, what are the
Group’s plans in terms of penetrating new international markets? What are
the other new international markets that the Group targets to penetrate?
Response:
For Guocera, besides the few countries mentioned in the question, we also export
to Europe, Middle East and America. With our focus on higher-end products, we
are now able to offer a better concept range of products via our existing network
of customers to improve the demand.
2. The Group’s revenue contributed by Singapore customers increased
significantly to RM34.1 million (2020: RM15.3 million) (Note 30, page 129 of
AR2021).
Which of the Group’s products attributed to the increase in revenue from
Singapore customers? What is the expected demand from Singapore
customers for the Group’s products, going forward?
Response:
The significant increase in the Group’s revenue from Singapore customers in
FY2021 as compared to FY2020 which was mainly contributed by Guocera
Group was because of shorter lock-down period in FY2021. We believe that our
higher-end products will also help to improve our sales from Singapore.
impairment losses are disclosed in Note 30 of the Financial Statements (page
121 of 2020 Annual Report).
3. The Group’s 1st quarter ended 30 September 2021 (“1QFY22”) recorded
57.6% drop in revenue to RM277 million (1st quarter ended 30 September

Hope to get at least 25 sen dividend

Happy New Year

Recently bought a tin of Able Farm evaporated milk at Econsave. There are quite a lot of different brands so I think the competition is stiff. Other brands such as Marigold sells the same product at much higher price. The cheapest one I think is Teapot. I stood there for almost 20 minutes to observe. Througout the observation period 2 customers bought the product. The first customer said, "let's choose the cheaper one" then he took a non Able Farm product. The second customer came after a few minutes and he loaded his trolley with many Teapot sweetened condensed milk. So it makes me think that most of the customers looking for sweetened condensed milk or evaporated milk are price-sensitive. For those who have high income, they might choose the premium brand such as Marigold. Hence, I think, if one wants to be successful in selling these product, it has to be either the cheapest or best quality. What is your thought? (I do hold some shares of Able Global, I hope this company to do well, but I see no good avantage it has over its competitors at local market in Malaysia.)

@Thirai, if the earnings stand steadily at 10 sen per share till next quarter the PE would be higher because many people will start to believe the plan that Sonos is moving out all the operations in China to Malaysia for products to be exported to the US and this is going to complete in 2022. I read this news some time ago and if this is going to be materialised we can expect a fabulous top and bottom line boost next year.

@JKing. I'm trying to do deeper research and I'm not sure if you could help me on this. Does FPI export Sonos finished product directly to US or is it sent to other factory/company for final assembly? Which company will export the final product to US?

And probably because of that our government is confident that our manufacturers are able to catch up by end of this year to achieve sales slightly better than last year.

I believe quite a lot of inventories (perhaps RM 45 millions) are actually goods that are already landed at US but somehow not yet recognised as revenue or cost of goods sold due to the term of trading. I am not able to verify this at the present but hope someone to enlighten us.

It is not so easy to move out. You got to look at other requirements. Otherwise Lii Hen would have first appeared somewhere in Africa by the name Great Afri Furniture etc.

I think the risk of missing a good entry has become higher than the risk of loosing the opportunity to buy at lower prices over time because:
1) Things are getting better and guys running the business will buy more
2) When things are getting better insiders including management, suppliers, employees are receiving good news and they will buy more too
3) Good news will come out on the newspaper eventually and other retail investors will be interested to buy
This risk-reward curve will quickly skewed in 3 months time so the more waiting, the more expensive would be to invest.

This should be the trend and ignoring the short-term volatility this is an achievable target price with justifiable reward to buy at current price.

@Thirai, the Q3 result is already out for a few days and the price doesn't go south. So I believe this is due to change of opinion of existing Liihen's shareholder where they are looking forward for the recovery of the earning which is yet to be reported in Q4 report rather than the damage which is already done and accounted for in Q3. I agree that the appropriate PE for this stock is around 8 but I think we should use forward PE instead of rolling 4 quarters in the past because we do not expect the same damage to be repeatable. If we are using forward PE, I think reasonable annual EPS should be RM 0.15 x 4 = RM 0.60. Target price should be RM 0.60 x 8 = RM 4.80. Buying at 80% discount the discounted target price should be around RM 3.80. Assuming 40% dividend payout, this should be able to support the price at RM 3.80 or higher.

@LKOH Thanks. I would like to find out and buy one to try.

I thought Dairy Champ is manufactured by Etika Group? What's the relation between Etika Group and Able Global / Johore Tin?

Dairy Champ? Didn't notice. Is it sold in Aeon or 99Mart?

@Thirai - Indeed 2021 is an awful year for Liihen because all factories lost production for 3 months (Jun, Jul, Aug) and some factories loss about a month production in Q1. If full vaccination would be able to prevent this in future, I foresee quarterly EPS to normalise to around 15 sen per share due to raising demand for wood furniture in the US. Don't forget that Liihen is still in expansion mode even if under pandemic. For this particular stock at the present, I couldn't figure a better time to buy it, for a handsome capital return when she announces next quarter earning after CNY 2022.

Is Able Global selling any dairy product in Malaysia?

Davidkkw79, you should have sold it just after MCO 3.0 was announced. But if you have held it until now, it is better to continue to hold it because the business has returned to full swing since Sep 2021.

Pricing of the warrant plus weaker quarter earning drive the price down...

@Cipta, this can be achieved only by getting permit to bring in more foreign workers.

@Teosoontong. Main source of raw material is from local suppliers, not its rubber plantation subsidiary. You can check the segmental reporting in quarter or annual report to verify this. The raw material cost can be transferred but may not be at 100% efficiency and it takes time.