Posted by johnny cash > 2014-08-18 13:34 | Report Abuse

5. VALUATION AND RECOMMENDATION



5.1 Stock is under-researched
TGI is currently not under the radar of most institutional investors, which is
not surprising as there is no research house with active coverage of the stock.
We believe over time, there should be more interest in this stock as both
institutional and retail investors understand the company’s growth potential.
5.2 Stronger earnings ahead
We forecast a 3-year net profit CAGR of 16% for TGI, driven by earnings growth
from its stretch film, PVC food wrap and garbage bag divisions. Our earnings
forecasts are conservative. In addition, we have not reflected any potential
earnings from any M&As. With its strong net cash balance sheet, the company
has indicated that they are looking for potential M&As that have synergies with
its operations. For example, in 2010, the company acquired TGSH Plastic
Industries for RM8m and in a short period of time, management turned around
this loss making company and operational cash flow is positive.

Posted by johnny cash > 2014-08-18 13:34 | Report Abuse

5.3 Using SOP to value the stock
We are using sum-of-parts (SOP) to value the stock. This is to reflect the high
value of its cash and net current assets. The current net cash and net current
assets are worth RM1.74 per TGI share, which is around 67% of its current
share price. In our SOP, we are valuing its current operations at 13x FY15 P/E,
in line with the packaging sector’s FY15 P/E target.
5.4 Initiate with an Add
We are initiating coverage on TGI with an Add rating, with implied target price
at RM3.95 (RM3.00 ex-ICULS and warrants share price, based on 30%
discount to its fully-diluted RM4.28 SOP/share). The large SOP discount is to
reflect its small market capitalisation and tight stock liquidity. At implied
RM3.95 target price, valuation is only at 10.5x 2015 P/E (basic-EPS).
5.5 Ex-ICULS and warrants
TGI’s proposed ICULS and free warrants issue should be completed sometime
in the next 1-2 months. Ex-date is likely in end-Sep. Assuming full conversion
of the ICULS and warrants, issued share base rises from 105.2m to 184.1m
shares, a 75% increase. Our adjusted ex-ICULS price for TGI is at RM2.09 but
after adjusting for the free warrants (valued at RM0.71 based on the Black
Scholes option pricing model), the ex-all price is lower at RM1.98. The ICULS
should raise RM52.6m with another RM39.5m assuming the warrants after
fully converted.

Posted by johnny cash > 2014-08-18 13:35 | Report Abuse

6. TECHNICAL ANALYSIS
6.1 At new all-time high
TGI’s monthly chart shows the stock has surpassed the RM2.55 2005 high and
the stock is now at a new all-time high. Monthly MACD is still positive but RSI
looks a bit overbought at 80. Weekly chart shows the stock in an uptrend
channel with next resistance at the RM3.05 levels.

Posted by i3i2i1 > 2014-08-18 14:36 | Report Abuse

tq Johnny, so many input!, still good to go in?

Posted by xcu843 > 2014-08-18 17:53 | Report Abuse

So, is it still worth to invest this counter?

Posted by member41 > 2014-08-18 18:53 | Report Abuse

Yes holding long term since 2012

Posted by pradeep > 2014-08-19 00:56 | Report Abuse

Maybe a bit of profit taking and thereafter uptrend again

Posted by i3i2i1 > 2014-08-19 10:48 | Report Abuse

gap up.. but... ok, pls dont fall too much...

Posted by xcu843 > 2014-08-19 15:54 | Report Abuse

Start weak already

Posted by johnny cash > 2014-08-19 21:15 | Report Abuse

patience slow n steady

Posted by member41 > 2014-08-19 21:26 | Report Abuse

This stock need patience. Just leave it grow by itself.

Posted by xcu843 > 2014-08-20 11:19 | Report Abuse

good grow

Posted by pradeep > 2014-08-20 12:17 | Report Abuse

Broke 2.92 it will fly and it is undervalue

Posted by pradeep > 2014-08-20 12:28 | Report Abuse

2.96 beautiful

Posted by OrangMinyak > 2014-08-20 14:20 | Report Abuse

will break 3.0 by this week.

Posted by i3i2i1 > 2014-08-20 14:26 | Report Abuse

2 more days..

Posted by xcu843 > 2014-08-20 15:18 | Report Abuse

sayang. I already sold at 2.95

Posted by pradeep > 2014-08-20 15:47 | Report Abuse

A bit of profit taking will come in

Posted by xcu843 > 2014-08-20 16:01 | Report Abuse

Really good perform today...

Posted by i3i2i1 > 2014-08-20 17:53 | Report Abuse

but the test failed, not sure if cause by the panics selling today

Posted by pradeep > 2014-08-20 22:47 | Report Abuse

Maybe not because of panic selling the write up by Cimb was very good with advertisement in the local papers now we have to guess what is the fair value of TGUAN earlier our target was 3.00

Posted by member41 > 2014-08-20 22:54 | Report Abuse

Hit 3.05 just now until sumatec pdz marco dropped

Posted by i3i2i1 > 2014-08-20 23:39 | Report Abuse

this counter can go more... a lot of counter experience panic selling

Posted by i3i2i1 > 2014-08-21 09:23 | Report Abuse

moving.. good!

Posted by i3i2i1 > 2014-08-21 09:23 | Report Abuse

Tolak Guat Guat ah :)

Posted by member41 > 2014-08-21 11:03 | Report Abuse

Test $3 again... come come

Posted by dylontn > 2014-08-21 17:23 | Report Abuse

http://klse.i3investor.com/blogs/kenangaresearch/58186.jsp

Posted by pradeep > 2014-08-21 17:38 | Report Abuse

It looks the target price had gone up to 3.50 to 3.70

Posted by happ12 > 2014-08-21 20:07 | Report Abuse

slowly but surely reach the target.

Posted by xcu843 > 2014-08-22 06:59 | Report Abuse

Announcement delay to September. So today no strength.

Posted by i3i2i1 > 2014-08-22 09:21 | Report Abuse

today land at 3

Posted by pradeep > 2014-08-22 11:49 | Report Abuse

Quarter result not out

Posted by chankp7010 > 2014-08-22 14:31 | Report Abuse

2 qt results just out at noon. 7 sen EPS for the latest quarter. Should go over to RM3.00 after noon break. Also declared 3 sen interim dividend.

Posted by i3i2i1 > 2014-08-22 14:49 | Report Abuse

ok, added at 293

Posted by dylontn > 2014-08-22 15:59 | Report Abuse

http://www.bursamalaysia.com/market/listed-companies/company-announcements/1717309
Quarterly report out wt 3 sen interim dividend
1H net profit 17.424 million (increased 56.37%)

Posted by xcu843 > 2014-08-22 16:48 | Report Abuse

Revenue increase a lot but net profit slightly increase only. Mean operating cost high.

Posted by pradeep > 2014-08-22 16:48 | Report Abuse

The results are beautiful

Posted by pradeep > 2014-08-22 16:49 | Report Abuse

One of the best fundamental company in Bursa

Posted by member41 > 2014-08-22 17:47 | Report Abuse

Dividend more frequent too. Used to be once a year. Yahoo.

Posted by ctock > 2014-08-23 09:36 | Report Abuse

is it still ok to buy at this price?

Posted by i3i2i1 > 2014-08-23 15:15 | Report Abuse

doji on friday, see on if uptrend, it will fly, if drop a bit, time to collect more.

Posted by xncziyi44 > 2014-08-23 20:09 | Report Abuse

revenue increased significantly,profit not so good what added cost increased cost.appear rev on the upside,good results either way.

Posted by aunloke > 2014-08-23 22:30 | Report Abuse

Tguan has reached its FV, to check why not try to figure out what will be the value giving it 15% increase in earning and PE ratio of 9 up to the year 2017.

Posted by pradeep > 2014-08-24 13:29 | Report Abuse

Aunloke with due respect to your opinion I do not agree the fair value is above 3.50

Posted by Funtrade > 2014-08-24 14:14 | Report Abuse

Will challenge RM3 on Monday. If can cross RM3 means next Tp RM3.20

Posted by aunloke > 2014-08-24 14:32 | Report Abuse

Well, I always estimate lower ( to be safer ), anyway hope that I'm wrong so that the price can move further and even my estimate is correct the price still can move further because of its rising momentum, so all the best to all still holding Tguan.
BTW do try to estimate the gain ( our AOI ) after FY 2017 using 15% increase in earning and PE as 9. My estimate is 8% annual gain, of course still better than FD but what if the increase is lower than 15% and PE is not 9 ?
What I'm trying to imply is that it's not that undervalued anymore compared with the value two years ago when we were the few strong supporters of Tguan . Hope you get my message and please don't think that I downgrade Tguan. I'm still watching it especially its OR and the ICUL.

Posted by aunloke > 2014-08-24 16:50 | Report Abuse

Sorry typo error ROI not AOI

Posted by pradeep > 2014-08-24 21:49 | Report Abuse

Aunloke the actual value of TGUAN will be after the value of the warrant and iculs. By the way if motherit is at 2.90 what will be the value of iculs and warrant when listed?. I have no idea.

Posted by pradeep > 2014-08-25 09:08 | Report Abuse

Moving higher

Posted by aunloke > 2014-08-25 13:08 | Report Abuse

You need to pay rm 1.00 for 1 icul but you can get back about 35 cents by selling the warrant as for the ex-price of the mother it's anybody guess.