Previously sales contract is base on one-year term contracts with ADNOC (Major supplier for Naphtha to LCTITAN), LCTITAN need review and renew on yearly basis. Now LCTITAN go for 3 years contracts, what this mean?
Firstly, this can ensure supply is sufficient to support business growth. Secondly, imagine u are a manufacturer, will u go sign 3 years contract with supplier to get feedstock if u no confident to your business sales?
The management is trying hard to revive confidence on good governance and transparent. The announcement about longer term contract with ADNOC is necessary and provide updates on risk factors disclosed in prospectus.
To recap risk relating to feedstock supply in prospectus : LCTITANT currently purchase naphtha supply from a variety of sources through contracts that are typically renewable annually. In the event LCTITAN cannot renew the supply agreements with suppliers on acceptable terms, and inability to obtain naphtha in sufficient quantities on a timely basis may impair its ability to manufacture products. In such cases, LCTITAN will need to seek alternative supply sources, which may not be on acceptable terms and could increase its production cost.
Conclusion: The renewal of longer term contract is both reflective of demand optimism of LCTITAN products and peace-of-mind assurance of feedstock supply on terms acceptable by LCTITAN management.
I truely believe that what LCT badly needs currently is improved investor relations via enhance transparency and investor/shareholder engagement. In the West, shareholder engagement is an investment strategy in itself by big fund mgrs and is part of their Sustainable and Responsible Investment portfolio strategy. They could start by establishing an Investor Relation Unit within LCT to better communicate with all relevant stakeholders.
fundamentally this co has no problem, and can be considered strong, and it SHOULD not be too far off from Pchem. But this is a classic case of a useless market-maker, MIBB, who has screwed up the whole listing exercise, and whose daily stabilizing action is a failure and who now suffers from the bombardment of shares when its being pushed up. Coupled with the the latest downgrading of target price by one F... stooge IB to 5.70, there are tons of shares just waiting on the sidelines to be thrown back to the market due to element of no confidence. How the co is gonna assure the future perception with their sterling performance and how the F...market-maker is gonna clear up this whole mess, only time will tell. But one thing is for sure. A quality co like titan has been prostitutionalized by blind and Stu.... IB.
Another thing is that the comparison with G Kent is only true to a certain extent. G kent has no tons of shares above the level achieved now, and it carries lots of prospective stories on its shoulder. Unfortunately, the journey for Titan from 5.12 to 6.50 shows the burden of impending shares that it will have to support from previous adverse news like fire, water, DOE ...might be years or more, due to issues of confidence of holders. And not to forget, how many times more is Titan to G kent with respect to Number of shares outstanding. This Kaleyfey MIB market maker should be fired by TITAN.
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....
Victor Yen
138 posts
Posted by Victor Yen > 2018-01-19 16:23 | Report Abuse
5.16...