cipapo, please do some homework before saying something. "Feedstock prices are expected to remain low and stable moving forward. In 9MFY15, corn and soybean prices were lower by 20% and 17% YoY, respectively. However, after forex adjustments, they were only lower by 1.2% and 1.5%. The group has bought forward its raw materials up to 1QFY16."
Although the performance is heavily depending on egg, corn and soya bean milk prices, from a long-term perspective, it is the most essential staple in an average Malaysian dining table. Due to its resilient nature and its ability to pass down the cost to consumer, these will mitigate any negative impacts of high feed costs.
Therefore, for any quarter where the feed prices are high, although TS may make lesser revenue or even fall into the red, the ability to pass down the cost will turn TS back to black in the next quarter.
As for the expansion plan, the management is looking to invest in biogas plant (Using chicken manure to generate electricity)- in order to reduce electrical consumption.
It is also wise to compare TS with its competitors: Layhong, QL and HuatLai. As a comparison, most of the competitors are trading at a higher PE and gearing ratio. For the case of LTKM, although it has better fundamentals and valuations, it appeared that the management is gravitating toward landbanking (property) instead of focusing on its core egg business. Hence, if i have to invest in a poultry company today, TS would be the first and only choice
This book is the result of the author's many years of experience and observation throughout his 26 years in the stockbroking industry. It was written for general public to learn to invest based on facts and not on fantasies or hearsay....
lanciao
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Posted by lanciao > 2016-01-26 14:18 | Report Abuse
Aiyoo