Friday, December 14, 2012

NTPM's 2Q2013 results: A short review

Over the last one month, NTPM has spent around RM3.7 million to buyback its own shares. Their purchase price was around RM0.425 - RM0.445 and if I am not wrong close to 8.6 million shares was bought back.

These shares I believe are mainly from Tabung Haji's ("TH") portion which has reduced its portion to below 5% (see below) since 7 November and I think it is still selling.

Sometimes, I wanted to know as a shareholder, what makes these fund selling? Are they selling to have opportunity to buy something else or could they just be losing interest in these stocks. Or could it be just year-end effect. Note that NTPM's shares have not been rising much over the years, hence the selling may not allow TH to gain much from their interests. I have noted of the same scenario happened to Bonia where PNB was selling. However, I think Bonia in this case did it better by getting the block off market.

Now, back to NTPM - is it a bad stock? It just announced an improved  performance in its most recent quarter. Its balance sheet in fact improved as well with better cash position against debt (gearing). There's nothing to fault the company here.

So, where are the contributions coming from? I am actually quite surprise actually as I thought the paper products division would continue to do better while the personal care products are the one facing competitive pressure. It is the other way, the paper products have actually sort of tapered in terms of growth while the personal care registered improved performance. See below.

Now, as I am living in cities, I would not have noticed these things. I have always thought that it has stiff competition as well as (to me), its going to be tough for the personal care (especially diapers) division with so many brands in the market.

I noticed NTPM does not promote (via adverts) its Diapex (baby diaper) brand in the bigger cities, but if you drive around, it does promotes its products via billboards (and other manners) along the smaller towns / cities. Hence, I could be seeing that NTPM either has better distributions itself or because of the pricing (cheaper) of its Diapex brand, it does have tractions in the smaller cities.

As I see it while its tissue brands are probably as strong as Kleenex (owned by Kimberley-Clark) in Malaysia, it may have a different strategy for the personal care segment.

Let's see how Vietnam goes as it seems that NTPM is investing quite substantially there with recent announcements.

And, lastly I do not see the selling by TH to be due to performance. Note that NTPM is not in the fashion industry like Padini, Bonia. Fashion changes (and these companies have to keep up with he fashion). Tissue papers on the other hand remain the same for a long period of time. More people means more tissue papers being used. More modern babies means more diapers as well. It is more of a strategy, marketing, distribution, quality, manufacturing differentiators.


shrobin said...

I bought 50,000 shares today at 0.435

CrabGrill said...

Heard that the dividend payout has been sliced substantially.

felicity said...

Yes I know on the dividend, but it was the right decision.