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【TOPGLOV 7113 交流专区】顶级手套
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发表于 11-4-2008 04:35 PM
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发表于 11-4-2008 05:15 PM
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原帖由 Mr.Business 于 11-4-2008 04:35 PM 发表 
又是时候看Top Glove表演了。。。
表演什么?再一次的一泻千里吗 |
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发表于 12-4-2008 07:55 AM
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发表于 12-4-2008 08:17 AM
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发表于 12-4-2008 08:42 AM
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发表于 12-4-2008 09:42 AM
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发表于 12-4-2008 09:52 AM
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所以說 : 短期內把美金換歐元根本不可能
Topglove在唬爛.... |
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发表于 12-4-2008 09:56 AM
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发表于 12-4-2008 11:36 AM
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发表于 12-4-2008 12:26 PM
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发表于 12-4-2008 12:38 PM
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回复 1574# 回酬 的帖子
我怕你的言论会给8年开枪。
如果美金真的影响那么严重，应该做Hedging 的。
没有做Hedging，只能说它的管理层失责。
不花钱作Hedging ，只有一个原因，那就是美金的影响不大。
不值得花这笔钱。
所以，怎么看，都是Topglove 的管理层不好。
如果美金的影响不大，Topglove 的问题更大。 |
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发表于 13-4-2008 12:38 AM
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Top Glove rises above challenges
By RACHAEL KAM
SUCCESSFUL MALAYSIAN BRANDS
“Rome was not built in a day'' is an adage that aptly describes the rise of Top Glove Corp Bhd as the world's largest glove manufacturer.
Founder and chairman Tan Sri Lim Wee-Chai
After a long journey fraught with hurdles and challenges, Top Glove has, since the company was started in 1991, finally earned its stripes as a world leading glove manufacturer with 25% share of the world market of 135 billion pieces a year.
The company, an original equipment manufacturer (OEM) of natural and synthetic latex gloves, also makes and exports latex examination, nitrile, vinyl, surgical, household, industrial and polyethelene gloves.
Executive director Lim Cheong Guan said the group's business model was 80% OEM and 20% own brand manufacturing (OBM). Its house brands are Top Glove, TG Medical, Great Glove and Master Guard.
Today, its products are exported to more than 180 countries. Its major markets, the US and Europe each accounts for 30% of the company's total exports.
Exports make up 95% of the company's total sales annually.
Lim said the present growing markets were the former Eastern Europe countries, the Middle East and East Asia.
“Being an internationally linked player, we have positioned our brand name as an efficient and good quality glove manufacturer,” he told StarBiz.
“Currently, we have a customer base of 850 and are looking to increase it to 1,000 by 2010,” he said, adding that the group also planned to increase its market share to 35% by 2010.
Lim said Top Glove faced competition from other established brands when it first introduced its brand to the market.
Gloves undergoing testing process.
“But we were able to gradually win over the customers from our competitors due to our quality products and reasonable pricing.
“Coupled with efficiency and quality manufacturing processes, we were able to bring the competition to a higher level,” he said.
To enhance efficiency and improve productivity, the company collaborated with institutions and agencies like Rubber Research Institute to keep abreast with the latest developments in rubber research technology.
Lim said Top Glove placed a lot of emphasis on research and development to produce a diversified range of high quality and value-added glove products to cater to the ever-increasing expectations of end-users, and aimed to stay ahead in product development.
This is because Top Glove sees customer satisfaction as top priority and is very focused on being a “one-stop complete glove sourcing centre”.
“To be a world-class cost effective glove manufacturer, we invested substantially in modern glove manufacturing machinery.
“We strongly believe in adopting the latest manufacturing techniques and applying the latest engineering processes to produce consistently high quality gloves,” Lim added.
The machinery in the factory is checked regularly and maintained by experts to ensure that production runs smoothly and consistency in output.
Some of Top Glove’s products.
“We always give priority to the development of human capital and this will ensure that we would keep developing new ideas and suggestions to improve all the time,” Lim said.
Top Glove was founded some 17 years ago by the husband-and-wife team of Tan Sri Dr Lim Wee-Chai, now company chairman, and Puan Sri Tong Siew Bee, executive director. Top Glove started with only one factory with three second-hand production lines.
Wee-Chai earned his Doctorate in Business Administration from the Irish International University in London in 2001. He also holds a Master of Business Administration from Sul Ross State University in Texas, US and a Bachelor of Science degree from Universiti Malaya.
He has more than 20 years' experience in the rubber and latex manufacturing business. Prior to forming Top Glove, he was sales manager at a subsidiary of OYL Industries Bhd.
As at March 31, Top Glove had total workforce of 8,300 and 19 factories, including four in Thailand and two in China. It has a total of 338 production lines with an annual production capacity of 29.7 billion gloves.
Top Glove was listed on the second board of the then Kuala Lumpur Stock Exchange (KLSE) in March 2001 and was transferred to the main board within 14 months.
The OEM glove manufacturer has received numerous awards, including first prize in the International Trade and Industry Ministry's Enterprise 50 Award last year, Finance Asia's Annual Regional Best Managed Companies Award in 2005, and the KLSE Main Board Corporate Merit Award 2003.
Wee-Chai also clinched the Master and Country Entrepreneur of The Year Award 2004 from Messrs Ernst & Young.
For the financial year ended Aug 31, 2007, it had shareholders' funds of RM637mil, and a turnover of RM1.23bil and net profit of RM102.9mil.
http://biz.thestar.com.my/news/story.asp?file=/2008/4/12/business/20929348&sec=business |
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发表于 13-4-2008 12:51 PM
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原帖由 scsiang82 于 13-4-2008 12:38 AM 发表 
Top Glove rises above challenges
By RACHAEL KAM
SUCCESSFUL MALAYSIAN BRANDS
“Rome was not built in a day'' is an adage that aptly describes the rise of Top Glove Corp Bhd as the world's larges ...
林伟才＝白手套？ |
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发表于 13-4-2008 12:59 PM
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发表于 13-4-2008 01:17 PM
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新闻
11-04-2008: Ringgit rises to new 10-year high
by Chong Jin Hun
KUALA LUMPUR: The ringgit rose to a new 10-year high against the US dollar yesterday in tandem with the rise in other major Asian currencies on concerns that the US government may further cut interest rates to sustain an economy that may have slid into recession.
Analysts said the strengthening Singapore dollar following the country’s latest monetary policy to accelerate the rise in its currency towards curbing inflation had also propelled other Asian currencies upwards due to their high correlation to the Singapore dollar.
“People are worried about the further deterioration of the US economy which may lead to further interest rate cuts.
“Foreign funds taking position in (Malaysia’s) plantation stocks had partially led to the strengthening of the ringgit apart from the weakening US dollar,” TA Securities Holdings Bhd head of research Kaladher Govindan told The Edge yesterday.
Against the US dollar, the ringgit rose to 3.1510, Singapore dollar strengthened to 1.3558 while the yuan hit 6.9916, rising past the 7.00 mark for the first time since China scrapped its fixed-exchange rate in 2005.
Meanwhile, the yen surged to 100.13, Thai baht rose to 31.53 while the Indonesian rupiah climbed to 9,185.
“Asian currencies are tracking the movement of the Singapore dollar due to their high correlation to the Singapore currency,” Bank Islam Malaysia Bhd senior economist Azrul Azwar said.
Poorer sentiments in the US came amid a disappointing start in the quarterly earnings reporting season there. Also, minutes of the Federal Reserve’s latest policy meeting recently hinted a possible contraction in the nation’s economy due to its on-going real estate and credit woes.
At the local exchange yesterday, foreign fund inflow boosted the Kuala Lumpur Composite Index, which rose 20.45 points or 1.7% to 1,248.19 points, bolstered by gains in plantation stocks. IOI Corp Bhd rose 45 sen to RM7.25, while Sime Darby Bhd added 25 sen to RM8.90.
High oil prices indirectly benefit palm oil rates. Moreover, palm oil is also expected to gain on the possibility of farmers in Argentina planting less soybeans due to export taxes, according to a recent note by SJ Securities.
“Nevertheless, we remain cautious on the local bourse’s outlook, given persistent uncertainties in the domestic and external environment,” InsiderAsia said.
Across the local bourse, there were 483 gainers and 194 losers while 245 stocks were unchanged. A total of 640.11 million shares valued at RM1.4 billion changed hands.
http://www.theedgedaily.com/cms/ ... a-a010ba00-400ff472 |
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发表于 13-4-2008 01:26 PM
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无意在 internet 翻阅到以下的旧闻
在想如果 TOPGLOV 是麻花或者乌通的朋党
罚款事件绝对不会发生
私下就解决了事
Thursday, August 17, 2006
沙伯盯： 世界顶级？
应该有看到以下这一段新闻吧？
“移民局在15日突擊頂級手套的工廠，發現該公司沒有為所聘請的外勞更新工作准證，涉及外勞多達2424人。移民局並扣留了該公司2名負責人協助調查。”
当然，TOPGLOV马上做出了否认说公司沒有聘請任何非法外勞，只是还没有或来不及更新工作准證。我的想法是，没有更新工作准證不是等于聘請非法外勞，这有分别吗？
根据移民局法律，每聘請一名非法外勞最高可罚款5万令吉。以2424非法外勞来计算，TOPGLOV最高会被罚款大约1亿2千万令吉。同样的，TOPGLOV做出了否认，並表示該公司只会被罰200萬令吉。
TOPGLOV FY06前三季的净盈利是大约是6千万。假设说FY06最后一季的净盈利可以来到2千万，那TOPGLOV FY06年的总净盈利会来到8千万。又假设FY07年TOPGLOV的净盈利可以增长40%，那FY07的净盈利会大约是1亿1千万。如果真如TOPGLOV所说只被罚款200万，这当然是小事一件。但如果是1亿2千万呢？
接下来还有续集，TOPGLOV向每名外勞扣除了1千360令吉的人头税，却没呈报上去。想想下，除了这笔为数300多万令吉的钱以外， TOPGLOV省下了多少的超时工资，保险，医药等等员工福利？因为是非法外勞嘛，都不须顾虑劳工部。事情既然已被告发，那之后TOPGLOV的生产成本会不会增加呢？
你是否真的认同TOPGLOV和一些證券行分析員所说的这只是一件小事？它对TOPGLOV的盈利真的没有什么影响？你真的认为以目前8.70的价钱，是反向投资TOPGLOV的好机会？
沙伯盯
[ 本帖最后由 cct2048 于 13-4-2008 01:29 PM 编辑 ] |
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发表于 13-4-2008 02:32 PM
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博客文章。
Wednesday, October 19, 2005
Top of ze World...
Being Top so geng kah?
Top Glove just released their quarterly earnings last nite and the local media quickly trumpeted its achievements.
See: Top Glove
TOP Glove Corp Bhd has recorded a net profit of RM58.1mil for its financial year ended Aug 31, up 47% from a net profit of RM39.5mil reported for the corresponding period last year.
The company posted a pre-tax profit of RM65.75mil on revenue of RM641.8mil for the period, beating the RM634.4mil revenue projected by analysts polled by Reuters stimates.
For the fourth quarter ended Aug 31, the group recorded revenue of RM194.8mil, representing an increase of 58% against revenue of RM123.3mil achieved during the previous corresponding quarter.
Pre-tax profit for the quarter under review increased to RM17.6mil from RM15.2mil a year ago.
Net profit up 47% wor. Terror hor…
However….what puzzles me is… where is ze Moola?
Mana pergi tok?
If i remember correctly, Jason Zweig stated somewhere (cannot remember which page lah) in the Fourth Revised edition of the legendary Benjamin Graham’s book, “The Intelligent Investor”…the best definition of a good business is that the good business generates more cash than it consumes.
The good business is generating more cash of the company’s piggy bank and the company’s piggy bank grows at a healthy pace.
Think about it.
Isn’t this what we want for our investment?
Now if a company keeps growing in size and expanding and expanding….sales is growing lah, net earnings is also growing at a fantastic rate….but then... somehow the end result is not there.. cos the company’s piggy bank is NOT reflecting the excellent result. Yup, company sales are increasing, net profits are increasing BUT cash is depleting. And in some drastic cases, the company’s loans are increasing too.
And this is my current prejudice against Top Glove.
Where is ze Moola?
Top Glove announced it MADE a net profit of 58.1 million for the current fiscal year 2005.
Fantastic! Bravo! Superb!
However.. open the company’s earnings excel file.. and look at the CF worksheet.
Line 41: Cash and cash equivalent at beginning of the year was 16.168 million
Line 43: Cash and cash equivalent at end of end of period was 4.616 million.
Ahem.
4.616 million wor… and according to the company it MADE 58.1 million. Isn’t the company consuming MORE cash than it generates? How? Would u justify Top Glove being a top business?
And Top Glove’s total borrowings now total 154 million. Errr… a year ago… how much ar?
Sooooooooooo despite it’s great sales and net profit growth… it’s bottom-line certainly ain’t too top-looking for me.
Btw…in my opinion, the need to have some sort of understanding of the explosive growth in Top Glove is kinda important.
So far, it looks to me it has been 'quite' prudent in the number of factories it has been adding per year. Yes, adding a new factory per year is indeed aggressive but i think it has not been too aggressive. (tiok boh?) From a management point of view, consideration should be given regarding the ability for Top Glove to manage the growth in its factories. (Layman's view: Buying and managing a business is always manageable, but if u buy 'too much' businesses, then the very obvious issue, is can we manage all these factories?) Yup, the issue of managing and cordination of all factories in a profitable and efficient manner becomes a concern if the company increases the number of factories too fast.
Whereas, the increment in production line should be a much easier task to handle compared to the number of factories. (tiok boh?)
Now one probably ask why all this? Growth in a company is always good however commonsense would tell us that excessive growth might pose some danger too. As such, this is why I am not discounting this issue.
Which is what is happening in Top Glove isn’t it? The company is expanding and expanding and expanding. Buy/adding a new factory here and there… but all these capex comes with a huge borrowing cost… and in me opinion…i the end result just does not justify all these expansions. Take a look at their Thailand and China segmental results. Does it justify all the moola spend expanding into these markets?
How? What say u?
Am I too prejudiced against what Top Glove has achieved so far?
http://whereiszemoola.blogspot.com/2005/10/top-of-ze-world.html |
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发表于 13-4-2008 02:41 PM
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博客文章。
Tuesday, April 04, 2006
Moola,
I know that u r a rare knowledgeable investor. All what U had mumbling so far sound pretty reasonable. But for Topglove, i am have a different perspective. (I also dont own this stock)
Strictly followed Ben Graham, "a good company is a company made more money than it spend", i have no objection to this. But, sorry to say that this statement is too general. Stocks are different from each other, we cannot apply this rule across the board. On the Topglove case, i am of opinion that a good company should employ the profit/equity wisely, either thru' business expansion or returned to shareholders. I personally prefer business expansion. Pertaining to debt, a am of the opinion that some manageable debt is acceptable. Of course borrowings come with a cost. I do agreed with U that the pace Topglove is expanding is to fast.
2nd brother
XXXXX
Hello 2nd Brother,
Many thanks for the kind words.
I do hope that you understand that in the share market opinions and views will always differ.. so I do think there is no need for you to to be sorry that your opinion differs, ok?
You see, yes I do agree very much that a good company should employ their profit/equity wisely, which as you have said, either thru business expansion or returning the excess cash back to the shareholders.
And this is the very issue here in Top Glove.
Is Top Glove expanding their business wisely?
Take a very good look at their cash flow.
Based on current numbers... Top Glove recorded a record half year earnings of 38.360 million.
And the very same question I asked back in first posting in Oct 2005, I asked again yesterday, where is the Money? Where is the wealth generated?
In this quarterly earnings, Top Glove mentioned that it's piggy bank cash at the start of the year was 24.812 million. At the end of this quarter, yes cash increased to 46.220 million BUT this was aided by an increase in borrowings of 42.873 million. If you minus out the borrowings, where did that earnings of 38.360 million go? And what if you take into consideration of the depreciation charges of 12.804 million?
Should one be worried that in Top Glove example, we are seeing a company that has been constantly consuming more cash than it generates?
And then what about the end results from Thailand and China?
And asked in the blog postings: 'And how did their current Thailand and China plants results appeal to you?'
Now these are the issues I have raised...
What's one opinion on it?
Do you agree or do you disagree?
For some.. they get worried... company cash flow has not been positive for a long time already, so is it wrong to be worried? Is the justifications to be worried valid?
However... ahhh... the differing opinions.... 
For some.. it is considered OK.. since they consider that because Top Glove is expanding and has the inspirations to be the TOP GLOVE MAKER in the world. And to be no.1, some sacrifices needs to be made. The company has to use their cash flow to fund the expansions. And if that is not enough, the company has to borrow more to fund the expansions.
Ahh... do you see the differing opinions?
Which is right?
Which is wrong?
I have no idea... me just raised the issues only via my mumblings...
http://whereiszemoola.blogspot.c ... world-part-iii.html |
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发表于 13-4-2008 02:43 PM
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博客文章。
Wednesday, April 05, 2006
Top of Ze World: Part IV
here's a reply from 2nd brother on this issue.. 6th April 8.00 am
Accordingly to Robert Hagstrom in (The Warren Buffett Way) and Phil Fisher in (Common Stock Uncommon Profit), how a company employ its cash depend on the stage of a company/business. At Topglove, it is at growing stage (Stage 2). It is growing so fast, every dollar they made have to plunge back for expanding the business. The profit itself is not sufficient enough for increasing production capacity, Topglove need to borrow more money to expand. Therefore, cash in hand is not a good tool to measure the company.
As business expand, of course the increased of working capital is a by-product. Strictly follow the latest quarter report, there was an increse of 30++million in working capital. Another 45 millon was spend on the production lines.
Althought the cash flow is not "pretty enough", i personally feel that it is not a alarming sign yet.
What i want to say is all these cashflow/ debt level are depend on the stage of a company.
Strictly followed Phil Fisher and Micheal Porter, low-cost producer would win especially in the commondity game. Since Topglove is the low-cost producer, i think they would win in this game.
In glove industry, scale of economy is crucial. Topglove yet to achieve scale of economy in China, so the reported profit would not be impressive. Maybe we would see some improvemnt in the offing.
Reply (April 6th 9.35 am):
For me, it depends on what one seeks for when they invest in a company. Now as mentioned many times before, the key to a successful investing is pretty much simple. One seeks to invest in a good company at a cheap price. And obviously the very key to this simple statement is the definition of 'good' and 'cheap'.
Now let's take the issue of good. What is considered good? Some wants to see the creation of wealth and on the other hand, one wants to see the company simply grow. And on the other hand, some see both as a must in their definition of a good company. They want to see the creation of wealth and they also want to see the company grow. And of course, such opinion simply varies.
Me? I would want to see the creation of wealth but yet I also want to see growth... LOL!! ... yalor.. I am way too demanding...
Ahh... am I wrong to be so selective?
For sure, some finds it acceptable to have an aggressive company, deploying every single cash back into the business for the sake of expansion. And if they have to, borrowing is needed. As mentioned again, such sacrifices is a must if the company wants to grow.
For some, they might ask if such management practise is prudent? For they would argue that expansion is a must BUT it must not be made at all costs. Spending all the cash flow and incurring loans to fund such expansion might be considered excessive. The arguement is that nothing truly great is made via fevered acquisitions of companies and that frequent acquisitions are a sign of weakness, of misplaced priorities and of the inability to enhance worth from within. For them they would rather see their company grow from their own funding. For them this is the real worth. Else they consider it as artificial engineered growth.
How?
Two school of thoughts. Yes?
Well, since I am one that wants to see the worth and yet one want to see the growth, perhaps it would be better if I explain more in terms of my views on what is happening in Top Glove.... (sorry.. let me start a whole new posting else this posting will be way too long..!!)
~~~~~~~~~~~~~~~
ps... I have turned this into a whole new blog posting into a discussion and if any1 wants to have their say, you are more than welcomed......
http://whereiszemoola.blogspot.c ... -world-part-iv.html
[ 本帖最后由 Mr.Business 于 13-4-2008 02:45 PM 编辑 ] |
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发表于 13-4-2008 02:48 PM
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博客文章。
Thursday, April 06, 2006
Top of Ze World: Part V
Back in 2001... that was the year Top Glove was listed on KLSE. On Oct 2001, they announced their 2001 q 4 earnings. (it would good to note the announced their very aggressive ambition, Top Glove Forecasts 40% Sales Growth two days after releasing their 2001 results)
total sales. 138.662 million
net ytd profit. 17.217 million
Cash & equiv 9.824 million
total debts 13.958 million
Did it deliver? A year later on Oct 2002, they announced their 2002 q4 earnings.
total ytd sales. 181.055 million
total ytd net profit. 18.036 million
Cash & equiv 21.214 million
total debts 13.440 million (net cash 7.774 million)
Sales revenue increased a lot but profit were flat. Ahh.. cash grew nicely.
Under the title of Margin Pressure, dated 22 Oct 2002, Surf 88 wrote the following...
Margin squeeze. In our previous result commentary (see ), we highlighted that Top Glove (RM2.12, stock code 7113) could have locked in rubber stocks at lower prices and hence the impact of higher rubber prices would only manifest in Jun-Aug 2002. This appears to be the case, as operating margin dropped to 13.9% in Jun-Aug 2002 from 16.0% in the preceding quarter. As such, pretax profit only rose 6% despite 19.0% turnover growth. Deferred taxation further depressed net profit to show an 11% decline.
Results in line. Overall, the full-year results were within our expectations, where topline growth was largely driven by a 23% capacity expansion but profits did not keep pace as margins fell from 17.3% to 14.9% due to higher raw material costs.
And here is a snippet from a Star interview back in 2002...
According to Lim, Top Glove’s second factory in Thailand is scheduled to begin operation next month while the one in China will start in March next year. Top Glove currently also has five factories in Malaysia.
New 2nd factory starting in Thailand... the start... the begining of the explosive, promised growth in earnings.
Here is Top Glove's 2003 Q4 quarterly earnings.
total ytd sales. 265.089 million
total ytd net profit. 25.222 million (ahh... ze big jump in net earnings!!!)
Cash & equiv 22.051 million
total debts 39.289 million (net debt of 17.238 million)
point to note... last fiscal year, Top Glove was in a net cash position. To achieve the jump in net profit, from 18.063 million to 25.222 (or an an increase of 7.159 million), Top Glove went from a net cash position of 7.774 million to a net debt of 17.238 million.
So, a year later... the big jump in earnings happened and Top Glove delivered.... but alas.... Surf 88 sudah bungkus by then .... anyway we now see that this company has really, really been aggressive. Many new production lines were set-up, new plants... and most of all.... we have Ze birdie thingy!
Ahhh.... good birdie fortunes + aggressive expansion = fantastic growth for 2003.
Now, here is Top Glove's 2004 Q4 quarterly earnings.
total ytd sales. 413.967 million
total ytd net profit. 39.509 million (wow.. bigger jump in net earnings!!!)
Cash & equiv 30.226 million
total debts 63.063 million (net debt of 32.837 million)
again some points to note... last fiscal year, Top Glove was in a net debt position of only 17.238 million. To achieve the 'additional growth', from 25.222 million to 39.509 (or an an increase of 14.287 million), Top Glove went from a net debt position of 17.238 million to a net debt of 32.837 million. (or it increased its net debt position by 15.599 million). How was their expansion justifiable?
anyway how was Top Glove achieving its super duper Top Glove? Here is some RHB notes which indicates that the growth is via acquisitions of new factories and starting of new production lines...
It has commissioned two new lines each in Factory 5 in Ipoh and Factory 6 in Phuket at end-August 2004. In Factory 5, Ipoh, the target is to install 10 new lines, bringing its capacity to 175m pieces a month, from the current level of 110m pieces a month. In Factory 6, Phuket, the plan is to replace the existing seven production lines with 10 advanced production lines, lifting capacity from current level of 35m pieces a month, to 65m pieces a month. Meanwhile, installation of new lines in Factory 10 is in progress while construction of Factory 11, Klang is going on full steam. It aims to commission a total of at least 155 production lines with annual capacity of 13.0bn pieces a year by end-2005. It has identified two new sites for two new factories which will be constructed in CY2005 and CY2006, respectively.
It has completed the acquisition of the remaining 40%-stake in Factory 7 in Hatyai, Thailand on 11 October 2004. Plan is in place to increase its capacity from current level of 1.08bn pieces a year to 4.8bn pieces a year by end-FY06. Its proposed acquisition of the remaining 45%-stake in the China plant is expected to complete by end-1QFY05.
How?
ok ... let me try to give an unbiased view on what is happening... .... try hor...
Firstly when there is huge spikes in sales & net profit, the first thing i always check on is whether there was any company acquisition which might have caused the spike in earnings.
Well, what i saw is TG is simply a very aggressive and ambitious company. It started off by buying a couple of factories in Malaysia and started expanding its production lines. It then moved on to Thailand and it even moved into CHina.
So over the years, TG focus was simple. Aggressive growth thru acquisitions and organic growth. And plans to stick to this gameplan for the next few years.
And of course all this has been helped by the birdie issue in 2003.
And the end result, although we are seeing the fantastic growth in earnings, TG is paying a hefty price for their expansion.
And last year, Oct 2005, Top Glove reported its 2005 Q5 quarterly earnings.
total ytd sales. 641.827 million
total ytd net profit. 58.141 million (wow.. earnings still very good!!!)
Cash & equiv 31.755 million
total debts 154.191 million (net debt of 122.436 million!!)
How?
Let's look at those issue or rather those points again.... last fiscal year, Top Glove was in a net debt position of 32.837 million. To achieve the 'additional growth', from 39.509 million to 58.141 million (or an an increase of 18.632 million), Top Glove went from a net debt position of 32.837 million to a net debt of 122.436 million. (or it increased its net debt position by 89.599 million).
How was their expansion justifiable?
Which was why I blogged that posting in Oct 2005. And let me repeat the main issues.
Sooooooooooo despite it’s great sales and net profit growth… it’s bottom-line certainly ain’t too top-looking for me.
Btw…in my opinion, the need to have some sort of understanding of the explosive growth in Top Glove is kinda important.
So far, it looks to me it has been 'quite' prudent in the number of factories it has been adding per year. Yes, adding a new factory per year is indeed aggressive but i think it has not been too aggressive. (tiok boh?) From a management point of view, consideration should be given regarding the ability for Top Glove to manage the growth in its factories. (Layman's view: Buying and managing a business is always manageable, but if u buy 'too much' businesses, then the very obvious issue, is can we manage all these factories?) Yup, the issue of managing and cordination of all factories in a profitable and efficient manner becomes a concern if the company increases the number of factories too fast.
Whereas, the increment in production line should be a much easier task to handle compared to the number of factories. (tiok boh?)
Now one probably ask why all this? Growth in a company is always good however commonsense would tell us that excessive growth might pose some danger too. As such, this is why I am not discounting this issue.
Which is what is happening in Top Glove isn’t it? The company is expanding and expanding and expanding. Buy/adding a new factory here and there… but all these capex comes with a huge borrowing cost… and in me opinion…i the end result just does not justify all these expansions. Take a look at their Thailand and China segmental results. Does it justify all the moola spend expanding into these markets?
How? What say u?
Am I too prejudiced against what Top Glove has achieved so far?
Is all my mumblings not valid? Or am I mumbling just for the sake of mumbling?
http://whereiszemoola.blogspot.c ... e-world-part-v.html
Comments:
Moola,
"Buying good business at cheap price" undeniable is way to make money in stock market. I never dispute that TG currently is overpriced, what i am concern more is the foundamental of the business.
In glove industry, players are fighting purely on prices. More players enter into the game or more aggresive certain players fighting for market share tend to reduce the profit margin. This senario happens in many industries, the question is can a company survive in the price war and still make reasonable returns to the shareholders. (i would proposed to check on the ROIC)
150++million of debt can be repaid within few years if TG stop its capex.
What open my eyes on TG is the ability to pass the additional price increased in latex to the buyers.(As the latex prices excalating in last few years). TG appears to own some pricing power that other companies didnt own.
I do agree with you on the speed TG is expanding, however i have to admit that only handful companies can reinvest thier profit like TG does. I am also very selective and demanding.
2nd brother
XXXXX
Hi 2nd bro,
Quote:
"Buying good business at cheap price" undeniable is way to make money in stock market.... what i am concern more is the foundamental of the business.
-----
which is why i am posing this issue for everyone.. 
there are some who argue that Top Glove has been tops so far...
but then..
there are some who would argue that Top Glove is simply artificially engineering its growth in a very reckless manner. And they would argue that a more prudent company would always show value in their expansion...
anywayyyyyyy...
ah... yes ROIC would be interesting... and if u do a comparison (from 2002 to now) and also note the ttm (trailing twelve month's) roic is showing....
anywayyyyyy.... an alternative is also to gauge the end results... for example... TG expanded heavily in Thailand and in CHina... which is why i had highlighted the segmental results in these countries.... and the investor would have to ask themselves if they are satisfied with the end results...
cheers
XXXXX
Moola,
I knew what U said is correct, i also noticed that the argument pointed out is similar to the example in the "Intelligent Investor" by Jason Zweig, yes...the artificial engineering profit.
Besides investing, most of time i only observe what is happening around. How companies deal with tough business environment.
For PE glove, TG has to invest in China due to the raw materials are most produced by Japan and Korea. So it is economical and logical to set up plant in China, it make no sense to built a plant locally. As i mentioned earlier, TG yet to achieve scale of economy in China. Sometime, reported figure might not be a good gauge...ha...ha...maybe i was wrong. Like u, i just mumbling around to share my view.
2nd brother |
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