ICAP Investor Day 2011

icapital.biz held the Investor Day 2011 in conjunction with its AGM  at the KL Convention Center. I share some takeways from the talks from the captains of the industry.

(Too bad I didn't have my DSLR with me, otherwise I can post some pictures. Anyone care to donate their unwanted handphone camera to me?)

Ex-CEO of F&N Dato Tan Ang Meng:
- the 4 largest beverage manufacturers in Malaysia now are F&N, Permanis, Coca-Cola and Yeo Hiap Seng (in descending order.)
- carbonated drinks margin is highest at 15% compared to others (Asian drinks, juice) but its market share is going down especially in developed countries (for health awareness reasons) but it still has growth potential in developing countries like China and India
- Japan (Asahi, Suntory, Sapporo, Kirin) is expanding overseas due to their demographics (older population lesser consumption)
- status quo will remain for the moment for Permanis before Asahi starts introducing new products  
F&N 100 plus is a large contributor to its revenue while its condensed milk sales are resilient (thanks to teh tarik stalls)
- values F&N at $7.3b (based on Permanis acquisition) but he thinks Permanis was overvalued while F&N is slightly undervalued due to the pessimism over losing its Coke licensing
- Coca-Cola (just went its own way here) is seen as a threat but will be struggling in the next few years, which is an opportunity for F&N to capitalize on with its large distribution network
- YHS is a good takeover target

CFO of Petronas Dagangan Rozaini Musa:
-  Petdag is #1 in the commercial (supplying to airplanes, industries) and LPG (cooking gas)segment and #2 in retail (petrol stations, after Shell) and lubricants.
- retail still has room to expand while there are plans to expand abroad to Thailand and Indonesia
starting to sell LPG through petrol stations


CEO of Malaysia Smelting Corporation Dato Seri Mohd Ajib Anuar ("The tin man"):
- MSC is the 2nd largest tin metal supplier in the world
- tin is mostly used in electronics at the moment (for soldering) besides tin plates for packaging but has also many other uses and is non toxic
- price volatility is due to its securatization leading to speculative activities
- for smeltering, earnings are on a cost plus basis while for mining it is correlated to the price of tin itself
- US used to keep a large stockpile but now not anymore
- MSC losses in 2010 was due to divestment of its non-tin assets causing impairment
- MSC now intends to focus on tin only, thus earnings will be more stable going forward and plans to develop new mines abroad

As for Tan Teng Boo's view:
- he is bearish on 2H2011 since early part of the year
- although there may be another global recession, which will be worst than in 2008, global economic  depression is unlikely due to the growth of emerging markets (none in 1930s)
-  problem is worst now compared to 2008 because governments of developed nations have run out of policy tools (interest rates are near 0%) while developing nations are suffering from high inflation
- Malaysian economic outlook in the long term depends a lot on whether the promised economic reforms will take place


Padini held a fashion show with many pretty, slim models. If I could bring home that tall, long haired Eastern European (?) girl, now that would be a fantastic takeway :P