Really Titanic Bull!!

This is how Titan performed on a quarterly basis.

2005 Q1 net profit 159.3 million (not listed yet)
2005 Q2 net profit 111.326 million.
2005 Q3 net profit 71.924 million
2005 Q4 net profit 19.282 million.

Take a look at the numbers. It takes no rocket scientist to see that on a quarterly basis, Titan's net profits are DECLINING drastically.

159.3 -> 111.3 -> 71.924 -> 19.282???

And some might view such decline as ALARMING!

Let's look at what's been mentioned in today's financial news.

1. From Business Times: Titan net profit rises to RM362m

• TITAN Chemicals Corp Bhd yesterday said high oil prices were the reason for the 40 per cent shortfall in net profit for the year to December 2005 against what it forecast in its listing propectus. Despite the shortfall, however, net profit at Malaysia's largest petrochemical firm was 38 per cent higher than a year ago.

Firstly, that 38 percent higher than a year ago is a NON issue. No one forced Titan to boldy forecast that optmistic earning forecast. Or did some one forced Titan to boldy forecast its earnings will more than double the very year it seeks listing? So whose fault was it? Well, I have no idea but when Titan misses its promised earnings by a whopping 40%, I do feel sorry for them IPO investors of Titan, for they have bought a stock based on a grossly optimistic earnings projection.

• Titan has decided to offer another 3 sen dividend to its shareholders, on top of the interim dividend of 3 sen declared earlier.

Hmm... would I be wrong to say that Titan is trying to offer more dividends as a sweetener to divert attention from its failure to deliver what was promised?

• Managing director Donald M. Condon Jr expects 2006 to be a good year for the company as demand for polymer strengthens and oil price stabilises

Yet another classical Philip Fisher example (see Management Integrity )The company's earnings is DECLINING AT A DRASTIC pace. Instead of explaining clearly and precisely wat happened, this drastic decline of earnings appears to be a non-issue. Not even a mention. See how the company focused on the issue of record earnings? See how the MD chose to focus on the future and gives optmistic expectations yet again?

Ok... here is the version from Star Biz

• “We were able to keep up our good momentum for 2005 as a whole because we operated very efficiently. Our continued efforts to improve day-to-day running were also showing good results,” he said.

Good results?

A net profit that declined from 159.3 -> 111.3 -> 71.924 -> 19.282???

How could the above results be deemed as good results?

ps...

Did you all know that Titan's quarterly earnings was so drastically poor, declining at such an alarming rate?? If I had not post this fact, would you be thinking that this was just a simple issue of Titan not delivering what it promised in its IPO?

Oh... someone mentioned this to me before...

The higher the IPO forecast, the more money is generated and the more profit for everyone involved.

True ah?