very well summised. you got it all right. next qtr takes in slow...

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jimbosaul

164 Posts.

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17/05/22

21:22

Post #: 61463689
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Originally posted by ecat88: ↑

This stock has been on my watchlist for years (not held) and had its issues but it looks to have finally turned the corner.

The main thing holding this stock back in the past was sales but the last two 4Cs have shown record quarterly pallet orders. They are getting good orders from a wide variety of companies including MNCs. After all the talk and potential, it looks like the tide for recycled plastic pallets has come in and it is actually showing up in the numbers.

In the past, unit sales translated into a loss as the cost of producing a pallet was too high (cash burn used to be out of control). But now costs look to be finally under control. Both admin and manufacturing costs are coming down. Break-even and profitability look close. Admin costs going down as they are relocating offices to much cheaper Indonesia. The manufacturing costs look to be improving as the supply of raw plastic is now consistent with large volumes from diversified suppliers and they have improved their wash plants to treat this plastic more economically.

The pallet designs are now getting lighter and better targeted at their customers with increased margins. Design is also more flexible with a single mold being able to produce multiple dimension sizes helping to reduce cost and cover more variety.

There is still some risk as the potential turnaround of this company is still in its early days. But the signs from the last 4C were very good (and underappreciated imo) and look to continue improving so I am happy to leave the sidelines and finally buy in especially at these low prices.

Now loaded and looking forward to the next 4C in July which I think may surprise to the upside as the cost measures kick in and the improved redesigned pallets enhance sales and margins.

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very well summised. you got it all right.

next qtr takes in slow sales of ramadan. or well thats been there esxcuse for last 4 yrs. so dont expect huge things.

but things looking like a huge ship in the process of a gradual slow turn.

lets hope no icebergs await ahead as she prepares to turn the corner !

RAN Price at posting: 1.3¢ Sentiment: Hold Disclosure: Held
3 Upvote

0 Great analysis

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