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=skim2) sugar
now 28 year high
http://www.wikinvest.com/concept/Sugar_Prices3) tin
but i tink this only influence a bit. cos they buy tin plates n not tin.
http://www.wikinvest.com/commodity/Tin/WikiChartPERSTIMA is the sole tin plate supplier in msia (according to etika AR)
hmmm mebbe better to invest in them
http://www.perstima.com.my4) palm oil too but CEO said small part only.
and whey?
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and for fun, u can make ur own condensed milk at home
http://www.wikihow.com/Make-Condensed-Milk