Regarding Toyochem again

My Dearest Moo Moo Cow,

On Saturday, I blogged on the following: Is Toyochem interesting?

Let's look at from a plus - minus point of view.

The plus points.

1. Its balance sheet remains healthy. Net cash per share of RM1.25 is one of the highest on the second board. Net tangible asset stood at RM3.64 a share as at end-December 2006
2. On Thursday, Toyochem announced a final net dividend for FY06 of 11 sen, translating into a decent yield of 4.0%. For FY05, it paid a gross final dividend of 11 sen per share. The net dividend payment for FY06 implied an improvement from FY05.

Minus points.

1. No growth. And from the table posted on the last posting, Is Toyochem interesting? , there is no growth. And in fact, one could say that Toyochem earnings has been declining since fy 2004.
2. And cash per share means nothing really if the company does not share adequetly with its shareholders. Is 4% sexy enough?

The growth issue is highly interesting. I, for one, always believe that growth and value goes hand in hand. You cannot have value without the growth.

And this reminds me of a discussion posted on Sahamas here.

• there is one thing i would like to add... growth and value - it really goes hand in hand.
  
  Think of this way. Growth is an integral part of value. Always is.
  
  Easiest put.. a company which has a stagnant set of earnings, indicates that probably this could be the best the company could earn OR the company management simply has no ambition or drive to push the company to the next level. Taking out the issue of the stock price, would you think this as a great company? For me, my answer is no. Won't you want a good company that is growing?
  
  And incredibly it's never the other way around.
  
  Some companies simply engineer their growth by haphazard acquisitions or expansions. They borrow and borrow.. building the company as how one would stack up a deck of cards. Or the company could grow huge by sacrificing their profit margins to induce more sales revenue. How long could such unhealthy business last? Yes, there is growth but there is never value.