Posted by JT Yeo > 2016-03-14 17:25 | Report Abuse

1. If your TP is reflecting the value of Canone, you will mostly only find out in the long term, not 1 month
2. In estimating next quarter EPS, even analysts got it wrong, given how many information they have. And it will make sense for them to jump into a different industry you will expect bumpy ride

Posted by cephasyu > 2016-03-14 18:24 | Report Abuse

JT Yeo, you're absolutely right.

I may be wrong here, but I am writing that new information may provide a catalyst for short term movement. however in the long term, unless there's a shift in the environment or business, the TP should prevail.

Posted by JT Yeo > 2016-03-14 19:02 | Report Abuse

yea the hard thing about investing is feedback loop. The faster feedback we receive, the quicker we can improve. But investing, it takes months or years. Let me know if you are interested to read Superforecasting. It will help you to improve your forecast skill

Posted by soojinhou > 2016-03-14 19:19 | Report Abuse

Thanks for sharing your analysis. My biggest fear regarding Canone is that there is a fundamental shift in the industry. This quarter, all 3 can producers Canone, Kianjoo and Johortin posted poor results. I wonder whether the prediction made in the past regarding tin can being a sunset industry is coming true. Many predicted the demise of the industry from competition from plastic. And why not? Plastic is cheaper and easier to manufacturer.

Another troubling sign is Aspire Insight seeking another extension from 31/9/15 to 31/3/16. They have years to do their due diligence, and yet when it's time to close the deal, they kick the can down the road, no pun intended. And despite a lot of talk, Toyota Tsusho has not thrown in it's hat. Are both companies waiting for more clarity on the prospect of the industry? I don't know.

We will know in 2 weeks time whether the Aspire Insight will close the deal. Fasten your seatbelts.

Posted by jingwei > 2016-03-15 00:08 | Report Abuse

Thank you for the write up. I am investing in Canone too and have no idea too why a poor result was reported. Totally agree with soojinhou statement. I'm worried about the future of this tin can industry too. As for now I just keep an eye on it.

Btw, JT Yeo, is that a book? I am interested to read please.

Posted by paperplane2016 > 2016-03-15 01:02 | Report Abuse

The assumption is danger

Posted by cephasyu > 2016-03-15 17:25 | Report Abuse

Hey JT, I am very interested in reading superforcasting. Hook a brother up. cephas.yu@gmail.com

Soojinhou, you're right. If there's a shift in the industry, we just gotta keep our eyes peeled to ensure that we don't die while it goes down. Johotin is a little different though, they have a lot of teething issues with their new factory, and therefore are registering very weak profits. Finally, you're absolutely right about the risk of Aspire extending again. We should expect an announcement by next week if they're kicking the can down the road again.

Paperplane, I agree with you. The assumptions are always dangerous, and I may be completely off. I basically try with the best reason that I can muster but it may be still completely off. Please change the valuation basis and the math will follow. All the workings are in the article :)

Posted by dusti > 2016-03-15 22:01 | Report Abuse

To garner confidence in your readers (and win fans) you yourself must be confident of only one TP i.e. 5.55 ringgit.

Posted by soojinhou > 2016-04-15 15:09 | Report Abuse

I think aspire insight walking away from the kianjoo deal confirmed my worst fear: tin can industry may be in terminal decline.

Posted by alibabacoming > 2016-04-20 17:33 | Report Abuse

now go in is so-hi . hahaha....

Posted by paperplane2016 > 2016-04-21 23:09 | Report Abuse

The assumption made is dangerous

Posted by stockmanmy > 2016-04-21 23:58 | Report Abuse

tin can aluminium can, any can will do

in fact, as long as food needs to be packaged , or cartoned the company will be there.