Chat on Titan

• ywt06 said...
  hi,it's me again.i didn't blame for the shortfall of actual net profit vs forecast in IPO.who would know the sudden increase of oil price in second half of 2005?the ability of the management team is impressive under new MD.the stock is getting better and better ....

Hi ywt06,

I fully agree with you very much about the extremely diffiuclty in forecasting profits in an IPO.

I really do.

However, there are instances where companies take advantage of this situation and project an earnings number which are totally overly optimistic.

Take a look again at the following points mentioned. Please do note, I am merely sharing my opinions and this is not an issue of right and wrong. Ok?

Anyway, in my first Titan posting: Titan

If you look at the attached snapshot of Titan earnings posted on OSK report, you would note that the company boldy projected a net earnings of 604 million for fy 2005.

Now, what's so wrong with that earnings projection?

Simple. Titan only earned some 262 million for their last reported earnings. And to project and then SELL their IPO to the investing public based on this earnings of 604 million or a growth of 130% was totally incredible and way overly optimistic in my opinion.

By the way, if you look at the blog posting, observe the dates and see how the company management continued to maintain their optimistic views on their earnings in May and Aug. Let me repaste here again:

• Friday August 26, 12:38 PM
  Malaysia Titan sees strong profit margin until 2009
  
  KUALA LUMPUR, Aug 26 (Reuters) - Malaysia's Titan Chemicals Corp said on Friday it expects its strong profit margin to continue until 2009.Managing director Donald M. Condon Jr says Titan Chemicals has been largely unaffected by the surge in oil prices because it is able to pass growing costs to customers

How?

Crude oil was supposed to be a non-factor! (Another incredible statement in my opinion.)

Anyway, just sharing my views.

rgds