InvestIdeas

1H09 net earnings = rm 24.336m or abt 4.8 sg cents
if 2H09 same same, then FY EPS abt 10cents
cheap to buy even now if no surprises ahead

note got debt
debt = rm 153.408m
cash = rm 35.868m
equity = rm 131.989m

also i rem the owners r the same pple behind lasseters
anyone has any comments on etika's or lasseter's mgt?

Used to be vested in Lasseter some time back.

Very smart people and they managed to sell their businesses before the AFC.

Unfortunately, one of the brothers died. He was the brains behind a lot of the deals.

Not vested in Lasseter anymore.

almost same same as HY09

FY09

num of sh = 264m (diluted)
FY09 net earnings = rm 61.483m or S$25.129m
Diluted EPS = S$0.095

debt = rm 131,991m
cash = rm 28,537m
equity = rm 168,674m
** rm = ringgit

they declared a final S$0.02 div
i shall try to attend the coming AGM to approve this

btw any gurus analyzing this?

as usual, our uncles and aunties nv fail to amaze me
the agm is quite short and a non-event.
once chairman declared agm + egm over, the uncles n aunties all RUN to grab the cans of condensed milk displayed on the table.
Really a free-for-all, first-come-first-take kind of situation.
Immediately after grabbing these free cans, the pack rushed to the free buffet.
Nothing left for me at both sites keke

Anyway, conclusion/ summary is as below:

Q) R u hedging ur commodities? Using futures?
A) Yes, we r hedging.
But my understding is the way they hedge is by ordering in advance. Their suppliers will not entertain orders > 6mths. Hence they lock in price for 6 mths only. Didnt chk if they have any derivatives in their AR.

Q) How does the m'sia govt sugar subsidy works?
A) M'sia govt only subsidise their sugar for produce used domestically.
Eg if they sell 60% of their produce in msia, then govt subsidise this 60% only.

Q) How do u intend to combat the rising commodity prices?
A) CEO gave me the politically ans abt tat's where the mgt gotta come in and raise px, ctrl costs etc etc

Q) Wat r the estimated commodity make-up of 1 tin of condensed milk?
A) No one can gimme an answer. Think for now estimate is 30% tin, 30% skimmed milk powder, 30% sugar.

Q) Tell me more abt ur purchase of TVX.
A) they spent US$8.45m to buy this vietnam coy becos they see the potential of condensed milk in vn (vietnam).
Actually me too. Actually anyone too if they went there n experience vn drip-coffee. Every cup has 1/4 condensed milk
BUT will vn flock to Vixumilk or DairyChamp? we will know in nxt 1-3yrs.

Summary
I have sold most of my holdings in this.
Will buy back later after I can confirm that they r able to control the rising commodity costs.
And after I can find a can of Dairy Champ in sg, msia or vn.
For the record, i am still not able to find their product.
But then again, i am not a frequent grocery shopper too.

the FY09 revenue increase marginally only (to me).
Key reason for high net profit is becos of lower commodity costs.
So if they cant grow their rev faster than the rise of their costs, then jialat liao

Their main commodities r:
(i based my estimates loosely on the links as follows. let me know if u have better sites. thanks.)

1) skimmed milk powder price.
2009 estimated avg = US$1800 per ton
lastdone = US$3000 per ton
http://www.clal.it/en/index.php?section=skim

2) sugar
now 28 year high
http://www.wikinvest.com/concept/Sugar_Prices

3) tin
but i tink this only influence a bit. cos they buy tin plates n not tin.
http://www.wikinvest.com/commodity/Tin/WikiChart

PERSTIMA is the sole tin plate supplier in msia (according to etika AR)
hmmm mebbe better to invest in them
http://www.perstima.com.my

4) palm oil too but CEO said small part only.
and whey?

========================

and for fun, u can make ur own condensed milk at home
http://www.wikihow.com/Make-Condensed-Milk

while flipping thru F&N AR2009, page 22 states tat F&N exited their under-performing dairy operation in Vietnam
hmmm if the num 1 evaporated n condensed milk in msia cant survive in vietnam, i wonder if etika (they say they num 2 in msia) can?

and just for recording purposes, msia kuok bro has a 5% deemed interest in etika
but note that their cost shld be much lower
they converted 850lots at $0.095

ichew wrote:as usual, our uncles and aunties nv fail to amaze me
the agm is quite short and a non-event.
once chairman declared agm + egm over, the uncles n aunties all RUN to grab the cans of condensed milk displayed on the table.
Really a free-for-all, first-come-first-take kind of situation.
Immediately after grabbing these free cans, the pack rushed to the free buffet.
Nothing left for me at both sites

mmm ... really looked cheapo ... AGM in this setting ... ?

cant say etika cheapo la
etika had "elegantly" stacked their pdts (cans of evaporated n condensed milk) on a table for display
they prob shld have package all into a goodie bag and give out to shdrs

not vested

Etika’s (ETK SP) sale of its dairy and packaging business to Asahi fetched a handsome price of USD329m (RM1062m) and will leave the group flushed with cash even after paying down its debts.

Etika will book a gain of RM625m after taking into account transaction cost.

Etika grew its canned milk business in Malaysia under the Dairy Champ brand for over a decade, ranking just behind Nestle and F&N in market share..

While the sale will result in the loss of its key profit generator for the group, Etika plans to expand its remaining businesses in nutritional products, food retail and trading.

An area it is optimistic on is its Texas Chicken chain in Malaysia, which it intends to scale up.

We estimate the company will have a cash pile of some SGD0.40/share, part of which will be distributed to shareholders as a special dividend.

Source: DMG