Key Takeaways from $TGUAN / 7034 (THONG GUAN INDUSTRIES BERHAD)'s AGM
馃搶 In the fourth quarter of last year, there was a bad debt of 10 million due to a long-standing debt from a customer during MCO, as recommended by the auditor, though TGUAN noted that the customer has a repayment plan extending over the next 4 years, potentially allowing for a write-back.
馃搶 This year, expansion will decelerate due to the relatively weak overall environment, with the overall utilization rate at 60%. Two new production lines for Stretch film were installed last year and earlier this year, which have already commenced operations.
馃搶 In Myanmar, development has been halted due to geopolitical tensions.
馃搶 Regarding the production of food packaging, industrial goods packaging, and courier bags, the boss noted that demand has remained relatively stable this year, with slight growth in local demand and average foreign demand.
馃搶 TGUAN has established a presence in the US, with a sales person, sales point, and warehouse set up to provide after-sales service and educate customers on product usage. The company's stretch film, incorporating nano-technology and comprising very thin layers, has transitioned from 33 layers to 67 layers.
馃搶 With regards to entering the real estate sector, the company sees potential due to the success of many Kedah real estate companies, prompting the initiation of involvement in this industry to diversify profit streams.
馃搶 Construction of 200 stores adjacent to LAGENDA properties is planned, primarily focused on residential housing. TGUAN's involvement aims to create a more integrated township, with Phase 1 set to establish 60 shop lots, projecting gross profits in the double digits. Feedback from the market has been positive, indicating potential for successful sales.
馃搶 The company's raw materials, including naphtha, PE, and PP, have stable prices at a considered low level. Notably, $LCTITAN / 5284 (LOTTE CHEMICAL TITAN HOLDING BERHAD)'s continued loss-making performance which is also why the company to accumulate raw materials in Q3 and Q4. This strategy aims to maintain or expand the company's future gross profits.
馃搶 The company anticipates that its growth may not reach previously high expectations. While Q1 showed satisfactory growth, Q2 exhibited a gradual slowdown.