Yes, the sign WAS there ... and you can see the stock recovering...


coincidently, Kenanga had a research report on the 15th... 

[attachmentid=10760496]
( I have yet to read that report myself ...... )

Well, do you think the sell down was unjustifiable?

At current price, what's your game plan? Is there meat? etc etc etc ....

MedElite23

I kacau abit, pouring some cold water

factors that affect earnings of Tguan
1. Demand. the demand err... ok?
2. Resin price. this has gone up alot and will eat up Tguan margin
3. Forex. MYR has been strengthening against USD
4. Expansion. not really on last year

Plastic is the new rubber

So yeah tguan / scientex no brainer. Just buy and sit on it, wait for packaging boom. It will come, especially now most big brands will switch from corrugated box to eco friendly plastic packaging due to its flexibility and weight.

Also also don't forget the amount of ecommerce transacted currently, do you notice all your goods from online come with some form of plastic packaging such as shrink wrap or some bubble wrap ?

MedElite23ChAOoz

Do you have a view on why Tguan has been downtrending until recently?
Looked at the QR and no red flags.

Thank you both for your kind replies.

My circle of competency right now extends only into the corrugated cardboard packaging industry, with a slight edge into plastics which I do not know enough of the industry.
I have Scientex, but the knowledge does not extend beyond the company. I can see a tonne of plastic industry papers for reading waiting for me. Strangely enough, I used to be tracking SLP but chose not to go in because of future prospects.

The current price point for Tguan looks fair. If the boxes get ticked tonight, might have small entry position tomorrow.

Okay here's my contribution. (the least I can do)

My bad. There was another report on the plastic packaging industry.

Here ....



here is TGuan... 

that's a ascending triangle right there....  (pls google if you are unsure what ting tong I am yapping about)



and of course there's Tomy




okay? 

Here is my end of the bargain. I've finished my prelimenary research which covers the past couple of annual reports, financial statements for trailing 8 years, news portals and that 1 hour vid from CGS CIMB with Alvin which was more interesting than I had expected. Here is my basic checklist.

Fundamentals
Year on year revenue increase is clear. Balance sheet is solid, though not flawless.
I like that the Cash From Op is rising to layer the bottom line. Though the free cash flow is considered high right now, I have concerns on the historical dips. Business expansion would likely be the cause here so I'll give it a pass. Higher profit margins we see are good, but keep in mind some part of it seems driven from lower material costs so I don't think it is sustainable.
Balance sheet wise, the debt to equity ratio is acceptable. Debt is 95% covered by the operating cash flow which is good.
The company also earns more interest than it pays so interest coverage gets a pass.
Overall debt has been growing which I dislike. Considering the expansion, I will pass this for now but I really hope it goes down post.

Growth Potential
I think for the industry, the word should be slow and steady growth.
The company has demonstrated good growth in the past and there are plans to continue with the strategic expansion plan which is already in execution phase. I like this as compared to one still residing on a powerpoint deck. One question mark I have are how new sales are being sourced.

Management
I gauge this by measuring how management has run the business on a day to day basis as well as strategic plans.
Overall goal to double revenue from a couple of years back is still on track. The expansion for the local facility and Myanmar gives them space to grow and scale. This expansion is somewhat delayed because of the MCO and I think they are still struggling to fly specialists in to work on it. Definitely a pass here for overall management. From the plan and past results, looks to be a group of people I'd give money to.

Alternatives
Tguan has a higher annual growth rate to some of it's peers like SLP and BPLAS.
BPLAS looks undervalued too with good fundamentals but probably suffers from the small market cap. Even with a good QR, the share price barely budged. They are sitting on lots of cash though. Anyhow, when in doubt for capital appreciation, go for the bigger players.

Industry Concerns
If this industry experiences a boom, ESG considerations might start to weigh in. Especially the 'E' part. Plastic gets a bad red. For now, not an area of concern.
I think the price is about fair and usually I would buy in with a small entry position to start with as part of an entry strategy.
However, there is an additional listing of 185k shares as an ESOS exercise announced today. I think the price might trace south tomorrow in response.

I'm onboard, most likely to pull the trigger sometime tomorrow.

Thanks. I think that's 2 companies now that we have in common with exposure to the Tokyo Olympics.

I would like to add cash position and net debt levels as a primary consideration. A business with the ability to generate liquid cash is going to allow it to capitalize on opportunities coming or weather storms. Debt is the main thing that will kill a company so I'd like to see lots of headroom for debt on the balance sheet for contingencies. This is what will let you sleep at night if the industry gets hit on bad times. Companies that do will rely on their cash pile and take on debt. Companies that don't have that will resort to higher debt and may go poof.

To be fair, I haven't heard the Magni CEO talking yet but would welcome any vids you may have. I think Lacoste was being rumoured, just whispers among remisiers and the sorts, nothing the mainstream news. But nothing materialized.

If you don't mind sharing, how long have you been in Tguan? Has the dip put you in the red to ride it out?

I saw that post in i3 too, I suspect that and the chatroom rumours might have come from the same source. As I haven't seen anything, assuming it will not happen. A contract of this size warrants a Bursa announcement.
Well, my guess of a price pull on the back of the ESOS did not happen and the price is steady with support-resistance in close margins. Have entered already, fellow shareholder.

One stock alone can't go far

If you want a rally, all abang adik must run together 

Looking at tomypak, slp, daibochi and bpplastic. very boring no movement. even if tguan report a abetter than average counter (while the rest have a drop in revue/profit), it may go up but don't expect a very good gain. it still takes the chef to put all dish and fried together

i don't have tguan with me, but also will monitor time to time

LWC. Richest man in Malaysia soon.

Gloves down as a sector.
Market chasing PBB is the surprise for me. RM20 too expensive, RM 4 OMG so cheap! Buy!

Okay, if I use the calculation method and tried to value a business today using past numbers instead of using projected values, I'll pick out the past 5y cash flow. No discount applied due to it being actual numbers.

In that sense, TGuan is calculated to have a present value of RM 2.11.

Still, I have questions on the principles behind the calculation as I don't think I fully understand the concept.

I do agree that the benchmark to value a business is in the revenue generation.
If you are using the measurement of a business in turning earnings to net cash (Disregarding profit margins, revenue growth, etc), wouldn't it be better to use Cash from Op instead? Free Cash Flow (As a bank balance) is influenced by investing and financing activities, and high growth companies use a fair amount of cash to expand so how much they leave in the bank will be skewed.

The number of years used in the formula influences the final value so was wondering of the significance of the 5 years. So if I use a smaller number like 4, I end up with a smaller value (2.91). If I expand it to 6, it increases the value.
Anyhow, let's jump into the projected growth of the company at 10%.
I think the industry is expected to grow at 6-7%, not sure if I remembered it wrongly as I read it somewhere and is purely from memory. If that is true, then would it be better to use industry growth rate as a projection?
Sorry for the deluge of questions!

WOW! Great stuff! 

Try ... change the rate to 5% instead of 10% for the free cash flow....

what would you get?

On another note, Magni looks to continue being flat-ish at least until the next QR. Doesn't have a calatyst in the short term.

Waiting for SPMX QR. Guessing it may be record profits, and the market responds by being red again.
For long term positions, I'm more of a guesstimate.
Usually starts off with the basic fundamentals, revenue and balance sheet. Then management and what the company direction is, this one is a little tricky as I'll need to go back and read like the past 10 years AR and see if they have grown the business the way they set out to. This one is really subjective. Then comes the news search to see if any articles come up, and how that ties into the entire 10 year journey. After that, it is checking up on peers if they are competing for the same customers or is largely separated and if they are a better prospect. Industry analysis follow that to see how it generates money, where it is headed and prospects (airlines die here for me). If at this point I'm still game for it, then comes price entry analysis.

This is where I take the 52 week history, plot in the QR release dates and see how it responds to news. Some can be really sensitive to news, others can announce a good quarter and the price doesn't change. Big price swings in between QR, I'll try search for news on that date to map out the story. At the end, I'll probably derive a price range that's acceptable to me with a CL level.
Short term punts are generally less work. I'd call these calculated gambles.