Monday, January 25, 2016

The next Hybrid Giant ~ Johoretin

1st of all, Happy Thaipusam to all my friends that are celebrating and Happy holiday to those that are not celebrating. It’s glad that all the counters we blog are still doing ok and hit our target price and don’t forget about D&O that we blog before too!
It’s been quite a while that I didn’t blog due to the busyness of my job, today I am taking the opportunity of Thaipusam holiday to share with you 1 of the research that I’m doing. This company is Johotin. The company has been transforming where it have diversified itself from Tin industry to F&B.
The reason we are looking into this company is because this company is earning USD and they are selling food that are essential to human such as milk powder. On the other hand, they have also got a grow factor which is their newly built factory that is about to operate. This will help to boost the capacity of the company and we will see a jump on their profit which will causes the Investment bank to rerate the company. As a result, we are 1 step ahead of them and that’s how retailer can beat the market.

Business Overview
·        Johoretin is mainly involved in the manufacturing of various tins, cans, other containers, the printing of tinplates and also manufacturing and selling of milk and related dairy products via its subsidiaries.
·         Products include biscuit tins, edible oil and vegetable ghee cans, plastic jerry cans, paints and chemical cans, sweetened/evaporated milk and other processed food cans.
·         One of the three largest tin can producers in Malaysia, though smaller than both Kian Joo and Can One. 
Segments
1Q14
2Q14
3Q14
1Q15
2Q15
3Q15
Tin-can
25.1
25.3
25.13
23.7
24.9
25.0
F&B
44.3
37.8
70.85
77.0
93.1
81.9
Investment holding
0.0
0.0
3.292
0.0
1.0
3.8
Total revenue
69.4
63.1
99.3
100.7
119.1
110.8

Segments
1Q14
2Q14
3Q14
1Q15
2Q15
3Q15
Tin-can
3.4
3.3
-0.8
1.3
2.7
-1.0
F&B
4.5
-3.4
1.9
5.2
7.0
0.4
Investment holding
-0.3
-0.5
-0.4
-0.4
-0.5
-0.5
Total operating profit
7.6
-0.5
0.7
6.1
9.2
-1.1


Investment merits
1.     Banking on the F&B segment
·         Recall back in Oct 2011, JTB acquired its dairy product manufacturing business through the acquisition of Able Dairies SB (ADSB).
·         Meanwhile, 80-85% of its products are exported to countries such as West Africa (50-60% of sales) and South East Asia while the remaining 15-20% are for local sales. There is strong underlying demand for condensed milk in third-world countries as a substitute for milk as it is a cheaper alternative.
·         Management is expecting revenues from sweetened condensed and evaporate milk to hover around RM160-180m for the next 2 years, which mainly driven by increased demand from the African region.
·         Current utilisation rates for their plant stands at 85%, and the group will eventually move some of its operations to its new factory to free-up space. Nonetheless, expansion plans for its condense and evaporated milk segment has not been discussed.
·         NP margins for exports stands at around 7-8% while for local is about 10%.
·         Overall, the group sells 180-200 containers (from 120-150 containers back in 2011).

2.     A new revenue stream – milk powder repacking (infant, growing up and whole milk powders) – sell as retail packs
·         Currently, Johoretin is importing formulated milk powder and outsourcing their repacking to third party sellers to sell to third world countries. Unfortunately, due to its capacity and facility constraints the group.
·         PBT margins are currently thin for this segment at 1-2% and revenue approximately RM100-120m/year.
·         Nonetheless, the group’s upcoming new facility, which would cater for its milk powder repacking segment will be completed by Feb-March 2015 and fill be running on utilisation rates of 25%. We understand that the new capacity is able to do 3k tonnes of repacking and the group will be able to formulate the repack the milk powder in-house.
·         Management expects break-even point to be at utilisation rates of 35-40% and expects to ramp up capacity with higher margins of 3-4% by 2H16.
·         This will target the lower-to-middle segment and customers will also cater mostly to South East Asia and Africa (most of its customers are the group’s existing customers).

3.     Steady tin can manufacturing business – business as usual
·         Moving forward, revenue from its tin can business is expected to grow organically at 2-4% and will also grow in tandem with its dairy product manufacturing business.
·         Main clients are Kraft and Lee Pineapple.
·         We understand that the group is working with a potential client with a few projects in the pipeline for its tin can business but no concrete plans as of now.



Small talk
Recently there are some market talks saying the 4th Quarter result will be as good as the 2nd quarter result. If this were to be true, then the total EPS for the company will be 4.27 + 7.16 + 3.52 + 7 = 21.95.
(we are not 100% confirm with the rumors, but its good to take a look whether what will happen if it were to be true)

Since the company is a hybrid of Tin and F&B industry, hence we give a conservative calculation of 15 times PE.
21.95* 15 = 329.25

As a result, we might see Johotin to go RM3.29 if it is fully value at 15 times PE.

However, don’t forget about the uncertainties of current choppy market, as a result, I think RM2.5 will be my 1st target and expect it to go higher with its result on 2nd Quarter.

To those risk taker out there, you may also take a look on their warrant which you may do some leveraging. However, please do some homework on it. 

Anyhow, this might not happen if the market gone haywire, so please monitor yourself and have a trading plan. Always remember to take care your RISK!

May all the HUAT be with us!
Regards
Big Canon Finance


Disclaimer: The content on this site is provided as general information only and should not be taken as investment advice. All site content, shall not be construed as a recommendation to buy or sell any security or financial instrument. The ideas expressed are solely the opinions of the author. Any action that you take as a result of information, analysis, or commentary on this site is ultimately your responsibility. Consult your investment adviser before making any investment decisions

20 comments:

tareq mahmud said...

The foreign exchange market is the "place" where currencies are traded. Currencies are important to most people around the world, whether they realize it or not, because currencies need to be exchanged in order to conduct foreign trade and business. If you are living in the U.S. and want to buy cheese from France, either you or the company that you buy the cheese from has to pay the French for the cheese in .This means that the U.S. importer would have to exchange Usa Forex Signals the equivalent value of U.S. dollars (USD) into euros. The same goes for traveling. A French tourist in Egypt can't pay in euros to see the pyramids because it's not the locally accepted currency. As such, the tourist has to exchange the euros for the local currency, in this case the Egyptian pound, at the current exchange rate.

Poul Poole said...

Initially, I need to exhibit why Forex is the spot to learn (versus the greater part of alternate markets) and why this business sector is the best I have seen to figure out how to Professionally Trade Forex.To know more visit my website Hot Forex Signals

Kadin Faris said...

Great info..

SeniorLeads

Wmelvin said...

My buddy who is an expert forex dealer let me know that he cleared out everything to simply concentrate on his Forex exchanging and that determination to make progress made him beat the misfortunes and unexpected expectations to absorb information he encountered at beginning. He pushed on the huge mix-up made by most brokers that is to too energize to exchange and profit from the forex in fast time.To know more visit us Usa Forex Signals

Jim Marven said...

How much do wealth and happiness correlate in your opinion?
Finance

IBU SUNARTI DI KALIMANTAN said...

Ass...saya tidak menyanka kalau saya sudah bisa sesukses ini dan ini semua berkat bantuan MBAH RAWA GUMPALA,saya yang dulunya bukan siapa-siapa bahkan saya juga selalu dihina orang dan alhamdulillah kini sekaran saya sudah punya segalanya,itu semua atas bantuan beliau.Saya sangat berterimakasih banyak kepada MBAH RAWA GUMPALA atas bantuan nomor dan dana ghaibnya,alhamdulillah kini saya sudah bisa membuka usaha kembali yang dulunya pakum karna masalah faktor ekonomi dan kini kami sekeluarga sudah sangat serba berkecukupan dan tidak pernah lagi hutang sana sini,,bagi anda yang punya masalah keuangan jangan sungkan-sungkan untuk menhubungi MBAH RAWA GUMPALA karna insya allah beliau akan membantu semua masalah anda dan baru kali ini juga saya mendaptkan para normal yang sangat hebat dan benar-benar terbukti nyata,ini bukan hanya sekedar cerita tapi inilah kisah nyata yang benar-benar nyata dari saya dan bagi anda yg ingin seperti saya silahkan hubungi saja MBAH RAWA GUMPALA di 085==316==106==111




(((( BUKA BLO DANA GHAIB DAN NOMOR GHAIB MBAH RAWA GUMPALA ))))







Ass...saya tidak menyanka kalau saya sudah bisa sesukses ini dan ini semua berkat bantuan MBAH RAWA GUMPALA,saya yang dulunya bukan siapa-siapa bahkan saya juga selalu dihina orang dan alhamdulillah kini sekaran saya sudah punya segalanya,itu semua atas bantuan beliau.Saya sangat berterimakasih banyak kepada MBAH RAWA GUMPALA atas bantuan nomor dan dana ghaibnya,alhamdulillah kini saya sudah bisa membuka usaha kembali yang dulunya pakum karna masalah faktor ekonomi dan kini kami sekeluarga sudah sangat serba berkecukupan dan tidak pernah lagi hutang sana sini,,bagi anda yang punya masalah keuangan jangan sungkan-sungkan untuk menhubungi MBAH RAWA GUMPALA karna insya allah beliau akan membantu semua masalah anda dan baru kali ini juga saya mendaptkan para normal yang sangat hebat dan benar-benar terbukti nyata,ini bukan hanya sekedar cerita tapi inilah kisah nyata yang benar-benar nyata dari saya dan bagi anda yg ingin seperti saya silahkan hubungi saja MBAH RAWA GUMPALA di 085==316==106==111

Jindal Bullion Limited said...

Information which you had shared is really good. Thanks for sharing such an informative blog. keep Posting. Jindal Bullion

Steve Robert said...

I have checked this link this is really important for the people to get benefit from.

reviews

Smith said...

Thank you for the helpful post. I found your blog with Google and I will start following. Hope to see new blogs soon.
MLM

Hosne Ara said...

Nice blog and Nice Post!! Your blog is really an academic standard blog which helps thousands of visitors worldwide. I have felt pleasure to visit your blog and read your informative topics.

Like you, I have also started a Business,Accounting and Finance Blog for academia. I hope my blog will also serve some of the
visitors who want to know knowledgiate topics..Anyway, thanks for your blog and good luck!!

Marcin Marć said...

Really great news.

Regards,
Marcin
http://www.comarch.com/finance/

Sharib Mirza said...

Thank you for sharing such great information. It was very informative and has help me in finding out more detail about IDBI Bank Latest News!

Herry jonson said...

Search new cars and best deals on new car models. Compare new car prices and get the best deals on new cars, Free car broker and Free Car finance Service.

Albert Row said...

Your website is terribly informative and your articles are wonderful.

Loans

Gary White said...

is primerica a good job?
Eric Wolf St Louis Mo

Jhon Marshal said...

I am undeniably thankful to you for providing us with this invaluable related information. My spouse and I are easily grateful, quite frankly the documents we needed.
loan

Ocean Cash said...


Do you need Personal Loan?
Business Cash Loan?
Unsecured Loan
Fast and Simple Loan?
Quick Application Process?
Approvals within 24-72 Hours?
No Hidden Fees Loan?
Funding in less than 1 Week?
Get unsecured working capital?
Contact Us At :oceancashcapital@gmail.com
Website http://oceancashmj.com
Phone number :+1-6474-864-724 (Call/Whats app)

LOAN SERVICES AVAILABLE INCLUDE:
================================
*Commercial Loans.
*Personal Loans.
*Business Loans.
*Investments Loans.
*Development Loans.
*Acquisition Loans .
*Construction loans.
*Business Loans And many More:

LOAN APPLICATION FORM:
=================
Full Name:................
Loan Amount Needed:.
Purpose of loan:.......
Loan Duration:..
Gender:.............
Marital status:....
Location:..........
Home Address:..
City:............
Country:......
Phone:..........
Mobile / Cell:....
Occupation:......
Monthly Income:....

Contact Us At :oceancashcapital@gmail.com
Website http://oceancashmj.com
Phone Number:+1-6474-864-724 (Call/Whats app)

James Jones said...

Well done and nice job ex client work and useful information about the Opportunity it's nice job.
canon 104 toner

Habibah Adeeb said...

Prudent Chartered Accountants is a leading provider of accounting, auditing and management consultancy in the Dubai, UAE. We provide accountancy and auditing services through Middle East. Our professional and qualified team has a wealth of knowledge and experience in areas such as taxation, corporate finance, litigation support, audit assurance and accounting.

MrHAMDN Alhousani said...

We are private lending firm,We offer Loans at low interest rate of to any Interested Individual personal. We are governmental Registered authorized financial helper. for more information on how to obtain our Loans contact us today via email: (mrhamdnloanoffer@gmail.com)