Stock: [TGUAN]: THONG GUAN INDUSTRIES BHD
Jan 30, 2018 11:01 AM | Report Abuse

The raw material price i tracked for Q4 up by approximately 5.84% compared to immediate Q3 (mainly due to 1 off price surge resulted from in USA), there after the resin price has gone substantially lower and back to norm. Thanks to stable natural gas price.

I think will have some minor impact to the gross profit margin. However, i also expect more contribution in term of volume from new blown lines plus 2nd unit of 33 layer nano machine with better margin in Q4.

All in, i think up coming result should not be bad..but will not be outstanding either. Expecting Revenue to record historical high. Earning should be doing ok.

Share Split in the card?

cheers!



Posted by YiStock > Nov 14, 2017 08:48 PM | Report Abuse X

The raw material price i tracked for Q3 up by approximately 3.1% comparer to previous quarter. I think will have some minor impact to the gross profit margin. However, i also expect more contribution in term of volume from new blown lines plus 2nd unit of 33 layer nano machine with better margin in Q3.

All in, i think up coming result should not be bad..but will not be outstanding either


@YiStock, was the recent Q4 margin compression within ur expectations?

anyone did a track of Insas BV against its market value over the years?

Fed's new chair Powell sounds more hawkish...if Fed to raise rates more aggresively then high chance US dollar to strengthen

hng33 always have valuable analysis on the business fundamentals.

just curious why hng33 prefer to adopt the strategy of trading in and out

how much loss u made, khuen?

Management explanation merely refer to forex which i think its inadequate

Lower profit before tax for the current quarter was mainly due to the reduction of gross profit margin in plastic products
due to the lower selling price of USD sales when translated to MYR as a result of the depreciation of the USD against MYR
during the current quarter.

@riskabsorber

My mentioned PBT margin is merely for Plastic and petroleum products.

PBT margin for its plastic business drop from 10% to a mere 2.4%. Is the strengthening of MYR contributed to such big impact?

Marche restaurant did not do well last time at the Curve. restaurant business is challenging..just look at tim ho wan etc.

PBT margin for its plastic business drop from 10% to a mere 2.4%. Is the strengthening of MYR contributed to such big impact?

CEO should do less interview, not overpromise and not build sky market expectation and instead should focus in driving margin improvements, profitability and let the results speak for itself.

Am dumbfounded by 4Q result. Disappointed is an understatement.

waiting for Wilmar to list its China business....can't wait for bumper DIVIDEND

market is pricing in a good quarterly result...hope earnings do not disappoint. but i think Q1FY18 would be more important as we would know the impact of MFRS9

When their Printed Circuit Board Assembly business starts to show higher contributions then that can be the next growth driver.

RHB

Valuation becomes compelling. We make no major changes to our earnings forecasts post-3QFY18 results. Our DCF-derived TP is
maintained at MYR2.17, which implies a 15.5x P/E FY19F. That represents a discount from the implied FY19F P/E of 18x for VS
Industry (VSI MK, BUY, TP: MYR3.58), which has a more sizeable market capitalisation and diversified customer base. SKP’s recent
share price correction has presented an opportunity for investors to accumulate the stock at a more reasonable valuation with the
stock now trading at 13.5x P/E FY19F (below +0.5 SD over 5-year mean). Upgrade to BUY. Risks to our recommendation include
lower-than-expected new orders and a delay in the new production line rollout.

TA and Insas both qualify as assets play and also earnings play. Bargain value emerges P/E wise or P/BV.

calvin,

consider writing one article on Texchem?

Calvin,

There are plenty of missing points here....
For example
1) Sale of Little Bay Cove in Sydney
2) Landbank opposite KLCC (BV of 716/sq ft v. MV of above 3500/sq ft)
3) Bukit Bintang land (BV of 682/sq ft)
4) Hotel portfolio
i) Radisson Plaza, Sydney (5 star)
ii) Westin, Melbourne (5 star)
iii) Aava Whistler, Canada (4 star)
iv) Swissotel, Singapore (4 star)
v) Swissotel, Kushan, China (5 star)
vi) Movenpick, Phuket (5 star)
5) Trump tower

drop below 2, i'll start to collect

paperplane, i believe the spin off listing of its highways will be the MAJOR CATALYST to unlock the value

i have accumulated enough of Ekovest. Let's ride together now.

calvin...why do u have to promote in i3????

i have not finished collecting....shhhhhhhhh

why argue so much when u can have a better power exposure in MFCB.

the plant will commercialise in 2020. u have the Laos government support. there is much needed demand for household electricity there

MFCB is stand to enjoy a steady stream of stable income/ cashflows over the 25 years concession

EV/EBIT less than 7x for a growth stock. upside potential is there

managed to grab some at 1.74

We maintain HOLD on Unisem with a revised fair value of
RM2.85/share (previously RM3.32/share), pegged to an
unchanged PE of 13x. We have rolled forward our
earnings base from FY18F to FY19F.

 We have trimmed our FY17F net profit forecast by 6%
after revising our 2017 USD/MYR assumption from 4.35 to
4.30. In addition, FY18F-FY19F net profit forecasts are
slashed by 15-18% mainly on account of a change in our
USD/MYR assumption from 4.12 to 3.95 for both years.

 Currently, the majority of Unisem's revenue is
denominated in USD, whereas only ~40% of total costs is
USD-based. Our sensitivity analysis shows that for every
1% depreciation in the USD/MYR, Unisem's earnings
would decline by 5%.

 Taking Malaysian Pacific Industries' results as a
bellwether, we believe the group is adversely affected by
both rising commodity prices and the weak USD in
4QFY17F. To put it into perspective, the USD vs. MYR has
depreciated 5.6% from 4.30 at the beginning of 3QFY17 to
4.05 at the end of 4QFY17F. In addition, copper and gold
prices have risen by 22% and 6% respectively during the
same period.

 Recall that management has guided the group would
register a flattish QoQ revenue growth (in USD terms)
owing to a decline in wafer-level chip-scale packages
(WLCSP) production. Coupled with the unfavourable
factors above, we believe Unisem will register a QoQ
decline in 4QFY17F net profit — hence our earnings
revision.

4) The market has priced in steep risk premium with
regards to IWCity acquisition
We believe the market has over-reacted negatively to
Ekovest’s proposed acquisition of IWCity. This is reflected
in its current shares which are trading at a steep ~50%
discount to our base case SOP valuation.
We also believe that Ekovest has the financial strength to
acquire IWCity. While Ekovest’s non-recourse net debt and
gearing will increase up to RM1.3bil and 0.56x, its nonrecourse
net gearing should moderate to 0.50x and 0.44x
in FY19F and FY20F respectively, thanks to Ekovest’s
strong operating cash flow.
As we are confident that Ekovest has the holding power for
IWCity, we are not too concerned even if the downturn in
the property market in Johor is to last longer than
expected.

3) Poised for upcycle in property market
Ekovest owns premium land banks in Klang Valley, which
are strategically located along the proposed KL River City.
The company plans to launch another two property projects
in 2018 with a combined GDV of RM2.8bil. These two new
projects would be mixed development projects comprising
offices, serviced apartment and a shopping mall.

2) Strong earnings visibility
Earnings visibility remains upbeat with its strong
outstanding order book of RM14bil, which will keep
Ekovest busy for the next 3–5 years. Furthermore, the
company is confident of securing additional job wins of at
least RM1bil in FY18 which we believe to be related to
infrastructure projects, i.e. highways

1) Sturdy recurring income from toll concession
activities

An urban road builder with toll concessionaire business,
Ekovest’s earnings are expected to remain solid on the
back of DUKE 1 and 2 concession period which last till
year 2059 with an option to extend for another 10 years.
Throughout the concession period, we believe earnings are
expected to grow healthily largely due to the growth of
traffic volume in addition to toll revision every five years.
Meanwhile, upon the completion of SPE (DUKE 3), it will
further boost the overall company earnings from year 2020.
We understand that the indicative toll rate would be slightly
higher than DUKE 1 and 2 at RM3.50.
Additionally, Ekovest would also receive more recurring
income (apart from DUKE 1 & 2 and SPE) upon the
completion of the proposed privatisation of the 75.2km
Kampung Baru Link, Istana Link and Kapar Link
Expressway (DUKE 2A). The company had received a
letter from the government for the principal approval of the
proposed privatisation. The estimated project cost for the
highway concession is RM6.32bil.

SUM-OF-PARTS VALUATION
Source: Company, AmInvestment Bank Bhd
Division Methodology Basis RM (mil)

Construction PE 13x RM1,927.8mil
Duke 1 & 2 Equity value 60% stake RM1,695.0mil
SPE (Duke 3) Equity value of WIP ~20% WIP RM146.1mil

Land banks
Ekovest RNAV 40% discount RM491.4m
IWCity RNAV 40% discount RM1,370.5m
Proceeds from warrants conversion 304.5mil units @ RM0.48 RM146.4m
Proceeds from ESOS 120.3mil units @ RM1.30 RM156.4
Less: Net Debt (exluding non-recourse debt) (RM1,322.3m)
4,611.3
SOP (RM/share)* 1.80
Less: Discount 25% (0.45)
Total 1.35

TG

Market cap = 469mil
EV/EBIT <7x
Net cash = 46sen
Ex-cash PER = 7x
ROE = 12%++


Liihen

Market cap = 540mil
EV/EBIT <5x
Net cash = 45sen
Ex-cash PER = 6x
ROE = 27%++

True, Lii Hen valuation is cheaper. But TG has more interesting growth story.

At current price,
Lii Hen's dividend yield is extremely high, very good defensively for portfolio. whereas for TG, it is also inexpensive to pay for its future growth prospect.

Anyway, i am invested in both. Thinking which co to average down or perhaps i should do both equally. Still strategising....

investors probably freaked out by the RM149mil cash purchase wiping out their cash holding substantially

be patient with Insas

it depends on ur investment objective dictating your strategies and horizon.

property market is at downcycle, u would not see big contribution at this moment, or even next 1-2 years.

u can buy some for long term exposure, but if ur strategy to buy for immediate catalyst that will crystalise say 1 year, then that's a different story

i'm considering to add more of Liihen or Thong Guan

wow 52 week low!

If you check the previous results, contribution from the China and Tawau concessions are quite small to the overall bottomline

i prefer exposure to MFCB for power play

icon8888 may come up with another written piece?

probably too much expectations had built in on sepcial dividends.

Maybank:

Initiate with BUY and MYR4.15 SOP-DCF based TP
We like MFCB for its: i) potential returns from Don Sahong hydropower
project in Laos; and ii) strong growth prospect from its Resources
segment. Also, its net cash position as of end-2016 reinforces its balance
sheet strength to take on the construction cost of Don Sahong. We value
MFCB using the SOP method to derive our TP of MYR4.15 (+12%) with Don
Sahong and its Resources segment making up the majority of its value.

Property market as a whole still in a downcycle. Market is merely discounting the future earnings prospect.

always remember mr.market is extremely emotional.

in the past 2 years when mr.market is overly bullish, tech stocks have their biggest run up in their lifetime

right now, mr.market emotion has just turned the opposite....how long may that be? no one knows...he can be emotional for short term or could be long term

always buy when u feel risk reward turns to ur favour...protect ur downside

anyway, looking at PIE carefully.

i have some doubts they will record 6++ EPS in Q4. so if comparing y-o-y, if EPS registers a drop, market may readjust further downwards.

trailing 12 months EPS is 12.45sen including last year q4 of 6.15sen but 3 months annualised yield only 6.30 sen.

even at 12.45sen eps, P/E is 13.25x which is inexpensive or neither it is cheap

all tech stocks are experiencing downwards adjustment

read today's the Edge Daily..reversal of fortune for semiconductor stocks

EBIDTA drop so much y-o-y

Inari management has rewarded their shareholders handsomely with increasing dividend payout, 3 bonus issues and increasing capital appreciation.

hahahaha, if only Insas and Inari swap management

all exporters are experiencing sell down

semiconductor stocks
furniture stocks

wait further and buy on weakness as u see fit