Category: Stock

Tinna Rubber And Infra : In today’s article, we are going to talk about a tire recycling company. Well, before you judge what is exciting to talk about a tire recycler, this company that we are going to see has given a return of around 245 percent over the past year. Even if you look at the return for the period of three years, the company has given a return of 2,766.64 percent. It was almost a 30-bagger in just three years! We are talking about Tinna Rubber and Infra. 

You see, with the recognition of limited natural resources, the global focus has shifted towards recycling, a trend embraced by companies aiming to incorporate more recycled materials into their products and formulas. 

Tinna Rubber And Infra 

The rubber sector is no stranger to this movement. End-of-life tires have become a significant reservoir of recycled rubber on a global scale, transitioning from waste to valuable resources. This transformation has spurred the growth of the reclaimed rubber industry, adapting to the new reality of utilizing recycled rubber from tires. 

But there is one important thing to notice here. One of the most famous ace investors, Dolly Khanna, has reduced her shareholding in the company to less than 1 percent. In December 2022, the shareholding stood at 1.6 percent. But why has the shareholding reduced over the period of one year? Let’s understand what the company does and what its future holds. 

Corporate Overview 

Established in 1987, Tinna Rubber and Infra Limited initially focused on serving the export market for footwear and footwear components. In 1991, the company diversified into manufacturing and exporting Thermoplastic Rubber Compounds (TPR), launching a new unit in Bombay, which commenced production in June of the same year.

Currently, the company is involved in the production and export of leather footwear, footwear components, TPR compounds, and merchant exports to various countries including the U.K., Canada, Italy, Australia, CIS countries, and Portugal. 

Tinna Rubber and Infra Limited manufactures and exports shoes for renowned international companies such as Liverpool Shoe Co. (a part of the Pentland Group), Ravel (a division of Clark Shoes of England), British Bata, Kidder Minster, Shoe Fayre, Bacons, L.M. International (U.K.), CICIL Brothers, R.Hannah Co. (Australia), and Worldwide Tradings (Canada), along with supplying to esteemed European chains like C&A, GUS, Stead & Simpson. TRIL is an industry pioneer in producing crumb rubber modifiers (CRM) for bitumen, with nearly 1,00,000 lane kilometres paved in India using CRMB and their CRM products. 

Distinguished as the sole company engaged in rubber-based solutions for both road bitumen and non-road industries, TRIL also manufactures value-added products from steel reconditioning, ensuring a steady supply of ELTs from regions like the Middle East, Africa, and Europe. As a leading player in Crumb Rubber and Bituminous products, TRIL has secured a significant market share through its unwavering commitment to quality, reliability, and customer satisfaction. 

TRIL Segments 

The company initially acquires waste tires from global sources and processes them in an eco-friendly manner, ensuring zero waste and pollution. TRIL’s research and development team has devised several value-added products derived from waste tires, featuring innovative applications as follows: 

● High Tensile Crumb: for rubber compounds, for use in the rubber industry including tyres.

● Crumb Rubber Modifier: for blending with Bitumen to make rubberized bitumen. 

● Reclaim Rubber: as a raw material for the rubber product industry.

● Hi Carbon Solid Steel Shots: for shot blasting, surface preparation applications. 

● Hi Carbon Steel Scrap: for melting and reuse. 

The company has successfully developed and brought to market its products, including Hi Carbon Steel Abrasives and Reclaim Rubber/Ultra Fine Crumb Rubber. While previously, the main sales focus of the company was on Crumb Rubber Modifier (CRM) and other road-related products used in the infra sector, the company has intentionally decreased its reliance on this sector in recent times. 

As of FY23, in the finished goods section, the road sector contributed around 32.5 percent of the total revenue. the non-road sector, which consists of products such as crumb rubber, contributed around 34.4 percent of the total revenue in the same financial year. 

Tinna Rubber And Infrastructure – Financials

In the fiscal year 2023, TRIL saw a notable increase in revenue, surging by 28.8% to reach ₹295 crore as opposed to ₹229 crore in FY2022. Analyzing a span of four years, encompassing FY2020 to FY2023, the company displayed a robust Compound Annual Growth Rate (CAGR) of 33.8% in revenue. 

Simultaneously, there was a substantial upturn in net profit, experiencing a 29.4% increase from ₹22 crore in FY2022 to ₹17 crore in FY2023. However, the company remained in loss for over five years prior to FY2022. The reason for the improved financial performance in recent times is due to the company’s focus on high capacity utilisation which helped the company to get benefits from economies of scale. 

In FY23, TRIL maintained positive financial indicators, boasting a strong Return on Equity (ROE) of 22.71 percent and a Return on Capital Employed (ROCE) of 28.10 percent. 

TRIL has consistently reduced its debt over time. The strong operating cash flow further strengthened the balance sheet, enabling the company to deleverage and reduce overall debt. Better financial performance also enabled TRIl to reduce its cost of debt. 

Future Outlook 

● The company has recently clinched a lucrative two-year contract with Indian Oil Corporation Limited, valued at ₹107 Crore, for the supply of Crumb Rubber Modifier. Additionally, TRIL anticipates a rise in consumer sales, particularly in Sports Turfs, Gym Mats, and Rubber Tiles, in FY24. 

● In the preceding fiscal year, the company made significant strides in its expansion endeavors. It commenced the construction of a greenfield plant in Varle, Maharashtra, aimed at processing 60,000 tons of Old Used Passenger Car Tyre Scrap (PCR) annually to produce Tyre Derived Energy (TDE) and Crumb Rubber. This facility, strategically located just 5 KM from its existing Wada Plant, is already underway with land acquisition and construction. 

● Furthermore, TRIL embarked on a pioneering venture by establishing its inaugural pilot plant dedicated to producing Composite Polymer. This

innovative facility will have an annual processing capacity of 6000 tons, utilizing 60% plastic waste (LDPE/HDPE/PP) and 40% in-house produced Crumb Rubber derived from old used tires. 

● The company has completed the acquisition of its maiden overseas facility in Oman. This facility will possess a capacity of around 18,000 MT annually. This move underscores TRIL’s commitment to globalizing its tire recycling expertise and capitalizing on emerging opportunities in the international market. 

● The company has recently ventured into the making of Thermo Plastic Elastomer (TPE) out of waste rubber & waste plastic Panipat. The capacity product for this product is estimated to be around 6,000 MT annually. The commencement of Production is expected to be started by Q4 FY24. 

Conclusion 

These factors position TRIL favorably for sustained growth and potentially enhanced valuation in the future. However, the precise magnitude of this growth and its implications for the company’s valuation remains subject to conjecture and warrant further discussion. So, share your thoughts in the comments section below! 

Written by Nalin Suriya S

By utilising the stock screener, stock heatmap, portfolio backtesting, and stock compare tool on the Trade Brains portal, investors gain access to comprehensive tools that enable them to identify the best stocks, also get updated with stock market news, and make well-informed investment.

新年快乐! Have a happy Chinese New Year!

FTSE ST Real Estate Investment Trusts (FTSE ST REIT Index) increased from 712.46 to 676.08 (-5.11%) compared to last month’s update. The REIT index is now in a downward parallel channel, with the 200D SMA being the immediate resistance, followed by the 739 as the next resistance.

• Short-term direction: Down
• Medium-term direction: Sideways
• Long-term direction: Sideways
• Immediate Support at 662 (previous low in Oct 2022)
• Immediate Resistance at 200D SMA, 739

FTSE REIT Index Chart

Previous chart on FTSE ST REIT index can be found in the last post: Singapore REIT Fundamental Comparison Table on January 7th, 2023.

The following is the compilation of 38 Singapore REITs with colour-coding of the Distribution Yield, Gearing Ratio and Price to NAV Ratio.

• The Financial Ratios are based on past data and these are lagging indicators.
• REITs highlighted in cyan have the latest Q4 2023 update values, the rest have Q3 update values.
• I have introduced weighted average (weighted by market cap) to the financial ratios, in addition to the existing simple average ratios. This is another perspective where smaller market cap REITs do not disproportionately affect the average ratios.

Data from REITsavvy Screener. https://screener.reitsavvy.com/

What does each Column mean?

• FY DPU: If Green, FY DPU for the recent 4 Quarters is higher than that of the preceding 4 Quarters. If Lower, it is Red.

• Yield (ttm): Yield, calculated by DPU (trailing twelve months) and Current Price as of February 9th, 2023.

• Gearing (%): Leverage Ratio.

• Price/NAV: Price to Book Value. Formula: Current Price over Net Asset Value per Unit.

• Yield Spread (%): REIT yield (ttm) reference to Gov Bond Yields. REITs trading in USD is referenced to US Gov Bond Yield, everything else is referenced to SG Gov Bond Yield.

Price/NAV Ratios Overview

• Price/NAV decreased to 0.75 (Weighted Average: 0.75)
  • Decreased from 0.79 in January 2023.
  • Singapore Overall REIT sector is very undervalued now.
  • Take note that NAV is adjusted upwards for some REITs due to pandemic recovery.

• Most overvalued REITs (based on Price/NAV)

  • ParkwayLife REIT	1.53
    Mapletree Industrial Tr	1.29
    Keppel DC REIT	1.28
    Capitaland Ascendas REIT	1.23
    Mapletree Logistics Tr	1.08
    Frasers Centrepoint Trust	0.97

  • Only 5 REITs are overvalued now based on Price/NAV value.
  • After 9 months of reigning in the Top 2, Mapletree Industrial Trust has taken Keppel DC REIT’s place.

• Most undervalued REITs (based on Price/NAV)

  • Manulife US REIT	0.18
    Lippo Malls Indonesia Retail Trust	0.19
    Prime US REIT	0.21
    Keppel Pacific Oak US REIT	0.31
    ARA Hospitality Trust	0.37
    EC World REIT	0.40

Distribution Yields Overview

• TTM Distribution Yield decreased to 8.21%. (Weighted Average is 6.32%)    
  • Decreased from 8.35% in January 2023. (Weighted Average was 6.16%)
  • 19 of 40 Singapore REITs have ttm distribution yields of above 7%.
  • Do take note that these yield numbers are based on current prices taking into account the delayed distribution/dividend cuts due to COVID-19, and economic recovery.
  • 7 REITs have a ttm yield of over 10%!

• Highest Distribution Yield REITs (ttm)

  • Prime US REIT	34.31
    Keppel Pacific Oak US REIT	21.12
    Elite Commercial REIT	14.22
    EC World REIT	12.85
    Cromwell European REIT	11.76
    United Hampshire REIT	11.35

  • Reminder that these yield numbers are based on current prices. This has caused and Prime US REIT’s ttm yields to be over 25%. Manulife US REIT has announced a distribution halt as part of its recapitalisation plan.
  • Some REITs opted for semi-annual reporting and thus no quarterly DPU was announced.
  • A High Yield should not be the sole ratio to look for when choosing a REIT to invest in.

• Yield Spread tightened to 5.07%. (Weighted Average widened slightly to 3.85%)     
  • Tightened from 5.40% in January 2023. (Weighted Average was 3.80%)

Gearing Ratios Overview

• Gearing Ratio decreased to 38.06%. (Weighted Average: 37.86%)    
  • Decreased from 38.16% of January 2023. (Weighted Average: 38.38%)  
  • Gearing Ratios are updated quarterly.
  • S-REITs Gearing Ratio has been on a steady uptrend. It was 35.55% in Q4 2019.

• Highest Gearing Ratio REITs

  • Manulife US REIT	58.3
    Elite Commercial REIT	45.4
    Prime US REIT	43.7
    Lippo Malls Indonesia Retail Trust	43.0
    Suntec REIT	42.3
    United Hampshire REIT	41.7

  • Manulife’s gearing ratio has exceeded MAS’s gearing limit of 50%. In last month’s Money and Me episode, we discussed why has the proposal to rescue Manulife US REIT fallen flat, and can Manulife US REIT be saved. Listen to it here.

Market Capitalisation Overview

• Total Singapore REIT Market Capitalisation decreased by 7.51% to S$90.08 Billion.
  • Decreased from S$97.46 Billion in January 2023.

• Biggest Market Capitalisation REITs (S$):

  • Capitaland Integrated Commercial Trust	13233.50
    Capitaland Ascendas REIT	11826.00
    Mapletree Logistics Tr	7504.70
    Mapletree Pan Asia Commercial Trust	7297.50
    Mapletree Industrial Tr	6735.40
    Frasers Logistics & Commercial Trust	4114.00

  • There are no change in the rankings since November 2022.

• Smallest Market Capitalisation REITs (S$):

  • Manulife US REIT	110.40
    Lippo Malls Indonesia Retail Trust	115.50
    Elite Commercial REIT	130.40
    ARA Hospitality Trust	164.79
    Prime US REIT	190.40
    EC World REIT	226.76

Disclaimer: The above table is best used for “screening and shortlisting only”. It is NOT for investing (Buy / Sell) decision. If you want to know more about investing in REITs, scroll down for more information on the REITs courses.

Source: https://screener.reitsavvy.com/

SG 10 Year & US 10 Year Government Bond Yield

• SG 10 Year: 2.98% (increased from 2.78%)
• US 10 Year: 4.18% (increased from 4.05%)

The past month was a bearish month for S-REITs again which possibly caused by the increase in US 10 Years Gov Bond Yields (highly inversely correlated with FTSE ST REIT Index in 2023) and poor earnings release by most of the REITs (which DPU was expected to drop YoY due to the full impact of interest rate). Fundamentally, the whole Singapore REITs landscape remains undervalued based on the average Price/NAV (at 0.75) value of the S-REITs, with still a very attractive DPU yield of 8.35%! (Weighted average yield of 6.32%). Do take note that NAV and DPU are lagging numbers.

Kawasaki Heavy Industries, Ltd. (OTCPK:KWHIY) Q3 2023 Results Conference Call February 8, 2024 11:30 PM ET

Company Participants

Katsuya Yamamoto – EVP, Executive Officer & IR

Katsuya Yamamoto

My name is Yamamoto. Thank you for your participation. Now I would like to present financial highlights. As announced today, at 11:30 a.m. on the Tokyo Stock Exchange and on the company’s website. In the third quarter financial year 2023, the company booked a 9-month cumulative business profit of JPY 700 million, a significant improvement from the previous quarter when the company posted a loss related to operational problems with the PW1100G-JM engine.

For the full year, business profit is expected to reach JPY 43 billion, an increase of JPY 3 billion from the previous announced forecast due to improved profitability in Aerospace Systems, Energy Solutions & Marine Engineering as well as a weaker yen despite worsening performance in Precision Machinery & Robot and Powersports & Engine.

Income before taxes and net income are unchanged from the previous forecast due to the expected loss on valuation of hedges by forward exchange contracts. Dividends will remain unchanged. The above is an overview. Please refer to Page 3 for a detailed explanation of the results.

Page 3. Once again, for the third quarter financial year 2023, orders received were JPY 1,290.1 billion. Revenue was JPY 1,229 billion. Business profit was JPY 0.7 billion. Loss before income taxes was JPY 17.9 billion and loss attributable to owners of the parent company was JPY 13.4 billion. Although each business has its own strengths and weaknesses. The overall business has generally remained in line with expectations since the previous announcement.

As you can see, the sales weighted average exchange rate for the third quarter was approximately JPY 6 lower than that of the same period last year. And the profit and loss impact, foreign currency volume was approximately $1.24 billion.

Page 4. The chart below shows the breakdown of orders, revenue and business profit for each segment. As shown in 1, Energy Solution & Marine Engineering reported an increase of JPY 7.3 billion year-on-year due to significant contributions from the ship and offshore structure and Energy Marine machinery businesses.

On the other hand, as mentioned in 2 above, the company reported a significant year-on-year decrease in profit in Powersports & Engine due to an increase in sales promotion expenses as booking estimated expenses related to the recall of off-road for wheelers in the U.S. in the third quarter. And in Precision Machinery & Robot mainly due to a stagnant inventory and a decrease in demand in the Chinese market.

As a result of the above, overall revenue increased by JPY 32.7 billion, from the same period last year to JPY 1,229 billion, while business profit (loss) decreased by JPY 80.1 billion to JPY 0.7 billion.

Page 5, see the chart for details. As noted in 1, the loss on the PW1100G engine was recorded as a decrease in revenue from sales resulting in a deterioration of the cost of revenue ratio. The main factors for 3 were cost reductions at the ship joint venture in China and improved profitability due to lower steel prices and a weaker yuan.

Page 6. Next, I will explain the stage profit below the business profit. As shown in 4, foreign exchange losses of JPY 10.8 billion were recorded in the third quarter. This was due to foreign exchange losses resulting from the loss on valuation of hedges of foreign exchange contracts. As a result, net loss attributable to owners of the parent amounted to JPY 13.4 billion, down JPY 65.9 billion from the same period last year.

Page 7. This section explains the factors that contribute to the increase or decrease in business profit and loss compared to the same period last year. The depreciation of the yen against the U.S. dollar resulted in a JPY 21.2 billion improvement. On the other hand, the change in the sales composition resulted in a JPY 25.6 billion decrease in profit mainly due to an increase in sales promotion expenses and estimated recall related expenses in the Powersports & Engine business as well as a decline in factory operations in the Precision Machinery & Robot business, mainly due to a drop in demand in the Chinese market.

Additionally, some bonus reserves, which were previously recorded in a lump sum at the end of the fiscal year will be leveled from the first quarter of this fiscal year and this change in accounting treatment has had the effect of reducing profits by approximately JPY 5 billion year-on-year.

In addition, a loss was recorded for the PW1100G engine, resulting in a business profit of JPY 0.7 billion for the third quarter, down JPY 80.1 billion, from the same period last year. Please refer to Page 8 for a detailed breakdown by segment.

Page 9. As indicated in 2, regarding the factors behind the change in assets in the third quarter, inventories increased in Aerospace Systems and Powersports & Engine in line with sales expansion. On the other hand, as indicated in 3, deferred tax assets increased as a result of the loss recorded for the PW1100G engine issue.

Page 10. With regard to the factors that caused changes in liabilities and net assets, as indicated in 4, interest-bearing debt has increased from the end of the previous period, but this is a normal business cycle. The net D/E ratio was 126%, slightly worse than in the same period last year, but this was due to a decrease in capital due to losses related to the PW1100G issue.

In addition to steadily improving profitability, we will continue our efforts to improve asset efficiency by promoting the collection of accounts receivable and reducing inventories with the aim of returning to our target level of 70% to 80% by the end of the fiscal year.

Page 11. As shown in 1, operating cash flow improved by JPY 15.1 billion from the same period last year mainly due to progress in collection of receivables in Powersports & Engine in the third quarter of the current fiscal year. While cash outflow in the third quarter of the previous fiscal year was due to an increase in advances in Aerospace Systems.

In terms of cash flow from investing activities, as shown in 2, expenditures for the acquisition of fixed assets increased mainly due to investments in connection with the startup of a plant in Mexico in the Powersports & Engine business, resulting in a JPY 27.8 billion outflow increase in overall cash flow from investing activities. As a result, free cash flow worsened by JPY 12.6 billion year-on-year.

Page 12. We have posted the cash flow trends for the past 10 years for your reference. Page 13. For the fiscal 2023 earnings outlook, as mentioned earlier, we expect a decrease in profits in the Precision Machinery & Robot and Powersports & Engine businesses from the previous forecast. However, due to improved profitability in the Aerospace and Energy Solution & Marine Engineering businesses and the depreciation of the yen, we expect business profit of JPY 43 billion, an increase of JPY 3 billion from the previous forecast.

Income before taxes and net income are unchanged from the previous forecast at JPY 21 billion and JPY 12 billion, respectively, due to the impact of valuation losses on the hedges associated with forward exchange contracts. We forecast higher sales and profits for the 3 months of the fourth quarter compared to the third quarter when sales and profits remain strong. And at this point, we believe there is a high probability that we will achieve our targets.

For your reference, please refer to the graph on Page 38, which shows the factors behind the JPY 35 billion change in business profit from the initial forecast of JPY 78 billion to the JPY 43 billion announced this time.

Page 14. The breakdown by segment is shown in the chart. Details are explained on the page for each segment. Page 15. The third quarter results for financial year 2023 are shown on the slide. Orders for the full year are expected to be JPY 590 billion, an increase of JPY 30 billion from the previous forecast, mainly due to an increase in orders from the Ministry of Defense.

Business profit was revised upward to a loss of JPY 17 billion, an improvement of JPY 7 billion from the previous forecast due to improved profitability of Aero Engines and yen being weaker than expected in the third quarter.

Page 16. Please refer to this page for the results of orders and revenue. The number of aircraft for Boeing and the number of engines sold for each of the airframe and engine business. Page 17. This page shows quarterly sales and profit trends.

Page 18. This page describes our understanding of the business environment and order trends in the segment are key measures to achieve our forecast and specific initiatives. Regarding the business environment, we understand that the PW1100G engine program is progressing as planned. In addition, we have listed priority measures and specific areas of emphasis for strengthening activities related to the Defense business for your reference.

Page 19. As shown in the slide for the third quarter results for financial year 2023, orders received were down significantly from the same period last year, but this was a reaction to the large orders received for the New York subway in the U.S. in the same period last year. Revenue increased by JPY 43.4 billion year-on-year due to an increase in the delivery of R211 cars for the U.S. market. Profits also increased by JPY 1.8 billion year-on-year mainly due to an increase in revenue despite the impact of lower domestic operations. There is no change in the forecast for fiscal year 2023 from the previous announcement.

Page 20. Please refer to this page for the respective orders and revenue in the domestic, Asian and North American markets. Page 21. This page shows quarterly revenue and profit trends for your reference. Page 22. There has been no change in the business environment and priority measures of the Rolling Stock business since the previous announcement. Page 23. The third quarter results for financial year 2023 are shown on the slide.

As for orders received, although there was an increase in orders for naval ship equipment for the Ministry of Defense, orders decreased due to the absence of orders for a waste treatment facility and LPG ammonia carriers received in the same period of the previous fiscal year. On the other hand, revenue rose due to the energy business and an increase in the construction volume of LPG ammonia carriers, and profits rose due to an increase in profit of equity method affiliates in addition to the increase in revenue.

The forecast for orders received has been raised by JPY 20 billion from the previous announcement, mainly due to an increase in orders for waste treatment facilities for the domestic market and the forecast for revenue has also been raised by JPY 10 billion based on progress in projects.

In terms of profit, we raised the previous forecast by JPY 4 billion due to improved profitability of the Energy business in addition to improved equity method gains in the shipbuilding business in China.

Page 24. Please refer to this page for a breakdown of orders, revenues and equity method gains and losses for the Energy, Plant & Marine Machinery business and ship and offshore businesses. Page 25. This page shows quarterly revenue and profit trends for your reference.

Page 26. This section describes the business environment and order trends in this segment. There are no major changes in the business environment or order trends. As for priority measures, we will continue to focus on providing products and services that contribute to the realization of a low-carbon and decarbonized society this fiscal year. As noted in the case study on the slide, we delivered a hybrid propulsion system for a bulk carrier in December. This is the first vessel of this type produced anywhere in the world.

In addition, we are steadily advancing efforts to realize a hydrogen society, including obtaining basic design approval from NK for the realization of hydrogen-fueled vessels. Page 27. The third quarter results for financial year 2023 are shown on the slide. Orders and revenue decreased from the same period of the previous year, mainly due to a decrease in orders for hydraulic equipment for the Chinese construction equipment market and industrial robots in general. Business profit also declined due to lower revenue and lower capacity utilization.

The forecast for both orders and revenue has been lowered by JPY 10 billion from the previous announcement due to the continued sluggish market and the forecast for business profit has also been lowered by JPY 4 billion from the previous announcement due to the decrease in revenue.

Page 28. This page shows orders, revenue and equity method gains or losses of the Precision Machinery & Robot segment. Please also refer to the following chart for a breakdown of hydraulic equipment revenue to the Chinese market and robot revenue by field.

Page 29. This page shows quarterly revenue and profit trends for your reference. Page 30. This page describes the business environment, order trends, priority measures and specific initiatives in this business segment. No major changes have been made to the content since the last meeting.

Page 31. Third quarter results for financial year 2023 are shown on the slide compared with the same period of the previous year revenue of motorcycles for Europe and 4-wheelers for North America increased, but revenue of motorcycles for Southeast Asia and general purpose engines for the U.S. decreased.

In addition to the decrease in revenue, business profit decreased due to an increase in sales, promotion expenses and fixed costs as well as the recording of estimated recall-related expenses related to 4-wheelers for the U.S. market in the third quarter. The forecast for revenue remains unchanged but business profit has been revised down JPY 3 billion from the previous forecast to JPY 47 billion due to recall-related expenses and other factors.

Page 32. This page shows revenue of motorcycles for developed countries, motorcycles for emerging markets, 4-wheelers and PWC and general-purpose gasoline engines. Please also refer to the table below for information on motorcycle sales by country.

Page 33. This page shows quarterly revenue and profit trends for your reference. Profit margin for the 3 months of the third quarter was 6.5%, a deterioration from the previous quarter. However, it should be noted that the profit margin would have been above 10% if recall-related expenses were excluded.

Page 34. We have included a new description of the current situation in the U.S. 4-wheeler market with regard to the business environment and priority measures for your reference. There are no major changes in other items from the previous report.

Page 35. Regarding shareholder returns, the dividend forecast remains unchanged from the previous announcement. In the next fiscal year, we will focus on returning to our previous growth path and achieving a significant increase in profit compared to the current fiscal year so that we can provide sufficient returns to shareholders.

Page 36. We are pleased to report 2 project topics, all are related to the hydrogen business, which we expect to be our future core business. This page describes the Dakar rally, in which members of the hydrogen small mobility, Engine Technology Association, HySE, including our company, Kawasaki Motors, Honda, Suzuki, Toyota and Yamaha participated with hydrogen fueled engine vehicles. The center of the slide shows the actual vehicle that participated in the race.

The engine is a hydrogen fueled version of the Ninja H2s 996cc supercharged engine manufactured by our company. The race was held in a harsh natural environment with high temperatures and long distances through desert and mountainous to rain, but the company finished in fourth place in the Mission 1000 category and attracted great attention from around the world. You can view the actual race video on YouTube by clicking the QR code on this slide.

We hope that this video will give you a sense of the possibilities and appeal of hydrogen engines. We will continue to contribute to the early realization of a carbon-neutral society from a global perspective through our world-leading hydrogen technology.

Page 37. In the 66th Ten Great New Products Awards announced last month, our 1.8-megawatt 100% hydrogen-fueled dry combustion gas turbine won the top prize, the Masuda Award.

The Ten Great New Product Awards sponsored by the Nikkan Kogyo Shimbun are given to products that have been developed and put to practical use in a given year and that contribute to the development of manufacturing and the strengthening of Japan’s international competitiveness.

The Masuda Award we won this time is a very prestigious award that has been given only 24 times in its 66-year history. The award was given in recognition of the world’s first commercialized gas turbine equipped with the combustor that can turn hydrogen exclusively in a dry process, thereby making a significant contribution to the reduction of CO2 emissions.

We will continue to contribute to the early realization of a decarbonized society by providing more hydrogen-fueled gas turbines to the market.

Page 38. From this page onward, reference information such as capital investment, depreciation and amortization, R&D expenses and number of employees at the end of the fiscal year are summarized. The number of orders received per quarter has also been added for your reference. This concludes my explanation.

Question-and-Answer Session

End of Q&A

What is the Stochastic Oscillator?

The stochastic readings are essentially percentage expressions of a security’s trading range over a given time period. (The default setting for the Stochastic Oscillator is 14 time periods – hourly, daily, etc.) A reading of 0 represents the lowest point of the trading range. A reading of 100 indicates the highest point during the designated time period.

Stochastic Oscillator Formula

The formula for calculating the Stochastic Oscillator is as follows:

%k = (Last Closing Price – Lowest Price)/(Highest Price – Lowest Price) x 100

%D = 3-day SMA of %K

Where:

Oscillator History

Dr. George Lane developed the Stochastic Oscillator in the late 1950s for use in technical analysis of securities. Lane, a financial analyst, was one of the first researchers to publish research papers on the use of stochastics. He believed the indicator could be profitably used in conjunction with Fibonacci retracement cycles or with Elliot Wave theory.

Lane noted that the Stochastic Oscillator indicates the momentum of a security’s price movement. It is not a trend indicator for price as, for example, a moving average indicator is. The oscillator compares the position of a security’s closing price relative to the high and low (max and min) of its price range during a specified period of time. In addition to gauging the strength of price movement, the oscillator can also be used to predict market reversal turning points.

Uses of the Stochastic Oscillator

The following are the primary uses of the stochastic oscillator:

Identify overbought and oversold levels

An overbought level is indicated when the stochastic reading is above 80. Readings below 20 indicate oversold conditions in the market. A sell signal is generated when the oscillator reading goes above the 80 level and then returns to readings below 80. Conversely, a buy signal is indicated when the oscillator moves below 20 and then back above 20. Overbought and oversold levels mean that the security’s price is near the top or bottom, respectively, of its trading range for the specified time period.

Divergence

Divergence occurs when the security price is making a new high or low that is not reflected on the Stochastic Oscillator. For example, price moves to a new high but the oscillator does not correspondingly move to a new high reading. This is an example of bearish divergence, which may signal an impending market reversal from an uptrend to a downtrend. The failure of the oscillator to reach a new high along price action doing so indicates that the momentum of the uptrend is starting to wane.

Similarly, a bullish divergence occurs when the market price makes a new low but the oscillator does not follow suit by moving to a new low reading. Bullish divergence indicates a possible upcoming market reversal to the upside.

It’s important to note that the Stochastic Oscillator may give a divergence signal some time before price action changes direction. For instance, when the oscillator gives a signal of bearish divergence, price may continue moving higher for several trading sessions before turning to the downside. This is the reason that Lane recommends waiting for some confirmation of a market reversal before entering a trading position. Trades should not be based on divergence alone.

Crossovers

Crossovers refer to the point at which the fast stochastic line and the slow stochastic line intersect. The fast stochastic line is the 0%K line, and the slow stochastic line is the %D line. When the %K line intersects the %D line and goes above it, this is a bullish scenario. Conversely, the %K line crossing from above to below the %D stochastic line gives a bearish sell signal.

Limitations of the Stochastic Oscillator

The main shortcoming of the oscillator is its tendency to generate false signals. They are especially common during turbulent, highly volatile trading conditions. This is why the importance of confirming trading signals from the Stochastic Oscillator with indications from other technical indicators is stressed.

Traders need to always keep in mind that the oscillator is primarily designed to measure the strength or weakness – not the trend or direction – of price action movement in a market.

Some traders aim to lessen the Stochastic Oscillator’s tendency to generate false trading signals by using more extreme readings of the oscillator to indicate overbought/oversold conditions in a market. Rather than using readings above 80 as the demarcation line, they instead only interpret readings above 85 as indicating overbought conditions. On the bearish side, only readings of 15 and below are interpreted as signaling oversold conditions.

A Final Word on the Oscillator

For several decades, a global order has governed the world, administering its ‘medicine’ of globalism and liberal democracies.

The belief is that the Western world prospered and experienced unprecedented societal growth because of this governance system.

What’s good for the goose must be good for the gander.

However, beyond North America, Europe and Australasia, the push to bring such change has not only seen chaos, unrest and bloodshed.

Worse still, it’s escalated over time.

Global foreign relations deteriorated gradually in the 1970s after the US defeat in Vietnam. This accelerated in the 1990s and early 2000s with the Gulf War, the Balkan wars, the civil wars in various parts of Africa and Central America, etc.

Things never became the same after 11 September when the world witnessed the terrorist attack. Various polls point to more than half of the American population believe it was an inside job. This eventually brought the US to invade Afghanistan and Iraq.

Several years after, ‘the Arab Spring’ led to major upheaval in the Middle East and North Africa and the collapse of Libya, Iraq and it nearly brought down Tunisia, Egypt and Syria.

Just as this global order was set to achieve domination by requiring nations submit to it or face exclusion, it committed several major tactical errors.

The system was set up to fail as it’s funded by a fiat currency system that’s backed by oil, or what we know as the US petrodollar system.

But the flaws sealed its fate. These include its reliance on international intrigue, false flags, corporate media propaganda and the use of blackmail against leaders to turn them into captives (to understand ‘elite capture’, please read this article).

But one major blunder I want to highlight is the Maidan incident in Ukraine in 2014 that may well have been the globalist elites’ Elba moment. For more detail, I recommend you watch Oliver Stone’s ‘Ukraine on Fire’ to see the role of the West in creating the conflict that sparked the 2022 February invasion by Russia.

Today I’ll look into the account from the key antagonist of the West and show you how and why this blunder has sealed the fate of globalism.

It’s important that you proceed with this article with an open mind and try to set aside your emotions and ideological preferences.

Digging into Putin’s mind — The historic Tucker Carlson interview

Last Tuesday, the maverick US journalist, Tucker Carlson, went to the Kremlin and interviewed Russian President Vladimir Putin.

In the eyes of a large proportion of the polite society in the West, President Putin is ‘persona non-grata’. Feared, hated and dismissed as a murderous, calculating dictator, many believe that he deserves no media coverage, except of his demise.

However, it’s undeniable that we should hear President Putin’s story, especially given he’s the leader of Russia.

Russia is the world’s top five economies and is a military superpower in its own name. Not only that, Russia is one of the world’s largest exporters of raw materials, especially to the European Union.

Tucker has given the world this chance.

The interview covered much ground. But more issues remain unaddressed.

I encourage you to watch this interview in your own time by clicking here.

At this point, I want to digress briefly to clarify a few things, to minimise any misunderstanding.

Firstly, in writing about President Putin, I’m neither endorsing his actions nor wanting to take sides in the conflict. I’m merely recognising that he is a major mover in the world. Therefore it’s critical to hear his side of the story, whether you agree or trust what he says.

Secondly, I recognise the biggest victims in this tragic episode are the civilians caught up in this conflict. This extends to the relatives of those who died and are maimed in this fight.

Thirdly, I believe that our media and leaders have impaired our ability to reach a higher level of understanding of what’s happening in this world through emotive reporting and slanted perspectives. Indeed, their credibility is under serious question given their long list of lies and deceptive reporting on other historical events.

In the two hours, the two discussed Russian history, why the Russia-Ukraine conflict happened, the role of US and its NATO allies in this conflict, the future development of global foreign relations and economic trade and the mindset of Russians and the nation State.

While I could cover each topics in more detail, I want to focus on the financial, geopolitical and societal takeaways in this interview.

The first is that the West has only recently awaken to the fact that Ukraine has lost this conflict. Up until late-2023, our leaders and the corporate media continually reported that Russian forces were unable to finish their assault in a short time frame meant that their defeat was imminent.

However, recent reports have changed tone as it’s increasingly clear that Russia has the upper hand. President Putin and the Russian army have dealt a crippling blow to the West, but not the Western nation’s military which didn’t send regular troops to engage Russian forces.

A surprising point President Putin made in the interview was that Western nations sent mercenary forces and US$72 billion to fund the war against Russia.

Interestingly, the US House and the defence agencies have sought to investigate where the funds ended up. Indeed, weapons and funds have appeared in other regions including Iran and Gaza.

The problem with the West was that they misjudged the strategy that the Russian military adopted in this conflict. Putin made it clear that his objective in Ukraine was to demilitarise the country and remove the cultural influence and ties to Neo-Nazism.

Given Russia’s superior strategic position, Putin’s tone in the interview conveyed clearly that he didn’t fear the threats from his enemies abroad and inside Russia.

He also dropped a bombshell that he sought to negotiate for peace with the West since 2000 but these were rejected on each occasion.

This was factual, rather than rhetoric. The Western corporate media reported this regarding the 2022 conflict from the accounts of Ukrainian politicians.

Putin has dealt a major blow against the credibility of the Western ruling class — the elected governments, the lobbyists in the military industrial complex, corporate media, the intelligentsia and multinational corporations. It’s for that same reason they have engaged in censorship, cancel culture and fact-checking in a desperate attempt to remain relevant.

The second is that President Putin plainly laid out that attempts by the West to weaponise the US dollar to sanction Russia and cripple its economy has backfired.

In as early as March 2022, Russia had sidestepped the move to destroy its economy by locking it out of the international SWIFT system. It did so by pegging the ruble to gold, thereby preventing an economic collapse like what happened in Southeast Asia in 1997–98.

Furthermore, many nations refused to follow suit with US, the EU, Canada, Australia and Japan in banning Russian energy and commodity exports. As a result, their economies suffered as energy prices escalated and inflation ravaged the world.

In Putin’s eyes, the attempt by the globalist world order to use its playbook has accelerated its demise. He pointed out that it instead pushed many nations away from the existing world order to embrace an alternative financial and political alliance in the form of the BRICS coalition.

The third is that Putin showed the stark contrast between social cohesion in Russia and many Western nations. We know that Russia has its social and political problems given the dominance of its ruling party and a rapidly ageing population. However, for what it’s worth, the ruling party receives more public support than most Western governments leaders. Furthermore, Putin credits the Russian society as less divided because there is a national heritage. The government shuns social and ideological pluralism.

If you observe Putin’s demeanour in the interview, he was calm, stern and of a clear mind. He didn’t behave impulsively when confronted by difficult questions. Like him or loathe him, he clearly showed he was in control.

There’s no denying he’s a dangerous enemy.

Gold the deciding factor in the titanic global order clash

It’s hard to conclude if Tucker Carlson set up this interview to improve Putin’s image in the West or just let Putin deliver the other side of the story to balance one’s perception. But what’s clear from this interview that the goals the current global order set out have failed miserably.

Globalism is on the decline. Nationalism is on the rise.

Even the architects of globalism recognise this year in their annual Davos Summit that their game is up.

They’ve lost the Global Information War and their ideology lost its legitimacy to govern.

We’ve seen the downfall of their acolytes including Germany’s Angela Merkel, Italy’s Mario Draghi, New Zealand’s Jacinda Ardern, The Netherlands’ Mark Rutte, to name a few.

Leaders that seek its own people’s interest ahead of international unity will gain more approval.

Furthermore, the petrodollar system has lost its political and financial invincibility. Resource rich nations can protect their currency and economy from financial isolation.

When the Russian Central Bank tied the ruble to gold temporarily in March 2022, it sent a strong message to the world that gold is more than just a ‘barbarous relic’. It’s money of the highest order.

Whether our own leaders in the West will heed this lesson and change tack to protect its own people and economy is up in the air. For now they’re more intent on opening their borders to immigrants, silencing their citizens and destroying their own culture.

And the people are rising up and pushing back. Just look at the farmers’ protests in Canada, France and the Netherlands.

Globalism is now in its death throes. The nationalist multipolar world order is dawning.

Own the secret weapon of the coming multipolar world order

In Sun Tzu’s Art of War, he wrote that the best way to win a war is without firing a single shot.

One can use politics or resources to bring your foe to negotiate with you. A physical conflict is the last resort when there’re no options.

In the modern world, we’ve a new dimension of warfare in information. Truth unites, lies divide.

A stable society requires honest money, truthful communication and a coherent national spirit.

We should go back to the basics.

Gold, with its 6,000 years’ history, will reassert its might as the petrodollar continues its decay. The global world order’s blunders will accelerate its demise.

My hope is that we needn’t spark a proxy war in another country to finally see the end of this diabolical system that’s brought mankind grief in the last century.

I invite you to learn more about how to build up your wealth in gold and potentially speculate in gold mining stocks.

Please check out my one-stop precious metals investment newsletter, The Australian Gold Report, and sign up today!

God bless,

Brian Chu,
Editor, Gold Stock Pro and The Australian Gold Report

Brian Chu is one of Australia’s foremost independent authorities on gold and gold stocks, with a unique strategy for valuing big producers and highly speculative explorers. He established a private family fund that only invests in ASX-listed gold mining companies, possibly the only such fund in Australia, putting his strategy and research skills to the test under public scrutiny. He currently writes two gold-focused investment advisories.

In his Australian Gold Report, Brian shows you a strategy for building long-term wealth in physical gold, along with a select portfolio of hand-picked stocks, mainly producers with proven revenue streams, chosen for their balance of risk and reward.

In his more specialised Gold Stock Pro service, Brian helps readers trade some of the most exciting, speculative gold mining plays on the ASX. He uses his proprietary system — based on the famous Lassonde Curve model, which tracks the life cycle of mining stocks. His aim is to help you get ready to trade the next phase of gold and silver’s anticipated longer-term bull market for opportunities to benefit.