Thailand’s real "Bread and Butter"
| Paul Renaud's Thai Portfolio Result | ||
| Core model (June 15th ‘97) | +61% | -56.5% |
| Alternate (Sept. 15th ’97) | +33.9% | -59% |
| Latest model (June 1st '98) | -24% | -37% |
| Aggregate performance on all three (Assuming equal weighing) | ||
| +23.6% | -50.8% | |
To various degrees I still like all shares in my stock model portfolios. I do not advocate many switches. While I was very wrong on KCE, I do not advocate buying disappointments. I would prefer subscribers focus on what is working rather than "bargain hunt" on lagers. Unfortunately, I do not have much more to say on KCE, except: I am keeping mine.
I posted in the subscriber’s lounge on Aug. 20th a "strong buy" on CM at then 28 Baht, per share. Cape is highly liquid and CM rather illiquid, hence take your pick. I advocate to buy both! Remember, unlike your broker tells you --liquidity is not everything! Longer term oriented investors (as I advocate) should realize that expected highest stock dividends, bring out the unexaggerated saying here: "who cares if nobody else ever buys this stock". I remain convinced that in 3-4 years some of these shares will pay out more in dividends than their current shares are priced at.
The US market has tumbled as I predicted in April of 1998 and then "outspokenly’so around July 22, when I posted in our lounge: "US stocks about to tumble". In fact since late April of 1998, stocks in the US have deteriorated far more than the manic Dow Jones index shows.
Based on 2 Q. ‘98 earnings and various other reasons Chiang Mai Frozen Foods (30), President Rice (40) and "Cape" (5.4), are currently my clear favorites.
Today we look more closely at one of our recent portfolio selections, namely CM: Export makes up 99.3% of their sales value. Frozen fruit only 0.3% of sales value. (99.7% is frozen vegetables). The company is able to minimize the impact of unpredictable weather by having a short planting period of only 45 days. "Owing to the fact that the company's main raw material of green beans may be planted throughout the year from July to March of the following year and that the soy beans may be planted from July to August and Oct to Nov. the Company can proceed on the compensatory plantation in the following seasons…..Despite the sluggish Japanese economy, CM expects to sell about the same volume as last year, holding off Chinese and Taiwanese competition. This is due to the accepted quality, deliciousness, hygienicness and appropriate prices of the Company's products." So explains a senior at CM Some time ago we voiced concern over the poor tropical fruit crops this year. But CM overwhelmingly produces vegetables, particularly beans, one of the main ones being those green soy beans in pods which the Japanese eat as an appetizer (edamame ). With irrigation they can control production volumes and yields. Exotic fruits are apparently a relatively small part of their turnover where they act as an exporter rather than as growers. CM’s earnings now appear to be growing by leaps and bounds. I think CM can earn 17 Baht a share for all of 1998,
(operating earnings) as such below 40, this stock is rated "strong buy".
CM is also one of those companies whose much improved underlying earnings were affected (shadowed) by a large forex loss taken in the 4th Q. of 1997.
"Our Financial statement as at December 31, 1997 have written off completely which included realized loss baht 34,044,346 and unrealized loss baht 150,576,847 caused the Operation resolution in 1997 lossed baht 44,525,115, but from 1998 onward our company, will not be lossed on exchange rate. If exchange rate level is not below 47.556. In addition, we will gain benefit from exchange because of export sale term by us dollar." (As they did, see more on this below)
Further Comments by Chiang Mai Frozen Food:
"We point out that with our operating profit at B106.1m for ’97 was knocked out by unrealized exchange losses of 150.6m.
In the first quarter of which about B40m was written back, the company was in fact profitable. Hence the dividend payment despite a loss. The doubling in operating profit came from a 19% increase in revenue following devaluation. B631m to B751m. The sales volume and cost of sales was still at 1996 levels. B447 and B445m. Selling and Admin only increased from B125 to B145m due to some foreign salaries etc. So the lion's share of the revenue increase is going to operating profit."
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CHIANGMAI FROZEN FOODS PUBLIC COMPANY LIMITED
Address :149/34 SOI ANGLO PLAZA, SURAWONG ROAD,
BANGKOK 10500Telephone :2384091, 2359934 Fax :2384090
CM Major Activities : Exporting frozen vegetables and fruits such as: Green beans, Carrot, Onions, Strawberry, Mangosteen, Bamboo Shoots,Payu Leng, Mixed Vegetables, Black Funguns, Cabbage, Rambutan, Longan, Water Chesnuts etc. CM : CHIANGMAI FROZEN FOODS PUBLIC COMPANY LIMITED
|
Security Symbol : |
CM |
|
Company Name : |
CHIANGMAI FROZEN FOODS PUBLIC COMPANY LIMITED |
|
Address : |
149/34 SOI ANGLO PLAZA, SURAWONG ROAD, BANGKOK 10500 |
|
Telephone : |
2384091, 2359934 |
|
Fax : |
2384090 |
|
Sector : |
Agribusiness |
|
Authorized Capital : |
210.00 M.BAHT |
|
PaidUp Capital :- Common Stock– Preferred Stock |
125.00 M.BAHT0.00 M.BAHT |
|
Foreign Limit : |
49.00 % |
|
Foreign Available : |
1627600 SHARES |
|
Dividend Policy : |
Not lower than 60% of net profit for the operation period |
CM : CHIANGMAI FROZEN FOODS PUBLIC COMPANY LIMITED
---- M.Baht except per share ----
As of |
199731/12/97 |
199631/12/96 |
199531/12/95 |
199431/12/94 |
199331/12/93 |
|
Assets |
645.02 |
615.23 |
630.06 |
352.54 |
295.69 |
|
Liabilities |
388.13 |
301.32 |
323.74 |
61.68 |
32.87 |
|
Equity |
256.89 |
313.91 |
306.32 |
290.85 |
262.83 |
|
Revenue |
759.36 |
636.23 |
436.93 |
456.64 |
352.68 |
|
Net Profit |
-44.52 |
32.59 |
52.97 |
59.27 |
51.66 |
|
EPS |
-3.56 |
2.61 |
4.24 |
4.74 |
4.13 |
|
P/E |
3.92 |
6.15 |
9.30 |
9.80 |
20.92 |
|
P/BV |
0.93 |
0.96 |
2.02 |
2.24 |
3.28 |
|
Dvd. Yield |
4.76 |
8.33 |
6.42 |
5.29 |
3.25 |
|
Price |
21.00 |
24.00 |
46.75 |
47.25 |
61.50 |
|
Mkt Cap. |
262.50 |
300.00 |
584.38 |
590.62 |
768.75 |
CM reports reviewed quarterly financial statements as follows. (In thousands)
Ending June 30, Quarter 2 for 1st 6 months: 1998 1997 1998 1997 Net profit (loss) 74,631 7,669 178,599 20,275 EPS (baht) 5.97 0.61 14.29* 1.62 ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ CM reported reviewed 1 quarterly financial statements as follows. (In thousands) Quarter 1, for 3 months, ending March 31, Year 1998 1997 Net profit (loss) 103,968 12,606 EPS (baht) 8.32* 1.01 *Incl. FX gain of 63.5 or 5.08 Baht per share. ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
CM : Operation Result for 1st Quarter of 1998. Posted SET Comments: CHIANGMAI FROZEN FOODS PUBLIC COMPANY LIMITED Ref. C.M.0016/1998 May 14, 1998 Re : Operation result for 1st quarter of 1998 TO : President The Stock Exchange of Thailand Our company would like to explain about the operation result of 1st quarter of 1998 when compare with the same quarter of last year which resulted in increment of exceed 20 percent; Amount Million Baht 1. Company gained profit from exchange rate 63.5 2. Gain exceed from Sales increase 10.4 3. Reduction from proportion of selling and administrative expenses 22.6 4. Increment from proportion of other revenue and expenses (5.1) 5. Summary Increase in Net Income = 724.77 % 91.4 This is to inform you. Yours Faithfully, (Signature) (Mr. Prayoon Pholpipattanaphong) CM : Interim Financial Statements ended June 30, 1998 and 1997 AUDITOR'S REPORT To The Shareholders CHIANGMAI FROZEN FOODS PUBLIC COMPANY LIMITED We have made a review of the balance sheets of CHIANGMAI FROZEN FOODS PUBLIC COMPANY LIMITED as at June 30, 1998 and 1997 ,the related statements of income ,changes in shareholders equity and retained earnings for the three-month and six-month period then ended, and the statement of cash flows for the three-month and six-month period ended June 30, 1998 in accordance with standards established by the Institute of Certified Accountants and Auditors of Thailand. A review of interim financial information consists principalxly of obtaining an understanding of the system for the preparation of interim financial information, applying analytical review procedures to financial data, and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an examination in accordance with generally accepted auditing standards, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion. Based on our review, we are not aware of any material modifications that should be made to the accompanying interim financial statements for them to be in conformity with generally accepted accounting principles. (PRADIT RODLOYTUK) Certified Public AccountantRegistration No. 218 Ast Master. August 3 ,1998 For much more information including Balance sheets and other up to date accounting information Please see the Set web page and check under "news". SET web page can be accessed directly through our web site. At the main opening page of thaistocks.com look at the left-hand column under "SET Page". Best Regards to all our Valued Subscribers! Paul A. Renaud- www.thaistocks.com from Morgan Stanley, USA - to 10 years on location analyzing the Thai Stock Market!
