@ballervard - you can have a look at its annual report. (1) Compare the overall inventories in 2020 versus 2021. Raw materials and trading goods is up by approx RM1.5M and RM11M respectively. I believed trading goods inventories are mainly from ToT. I am not sure whether these inventories will be able to sell at higher price in FY2022 :) (2) Cash balances dropped from RM24M in FY2020 to RM14M in FY2021. Approx RM11M was given to its subsidiary for working capital, with interest bearing though :) possible its ToT. (3) ToT seems to contribute positively to Plabs’ PAT in FY2021 and it comes with a profit guarantee of minimum RM4.5M for FY2021 and FY2022.

"The Group anticipates the challenging environment for the industry to continue for the year, as high
commodities prices, rising freight costs, implementation of minimum wages of RM1,500.00, hike in the
overnight policy rate of 25 basis point by Bank Negara Malaysia, weakening of Ringgit Malaysia and
geopolitical uncertainties weigh on the Group's margin while rising inflationary pressures may dampen
discretionary spending"
Plab management so honest, seems like alr hint us wat gonna....

Hi Time and Space, just my opinions, could be wrong. Hope it helps - (1) indeed challenging external headwinds in general for the industry or overall economy. However, I believed Plabs management will not just sit on it. Its balance sheet showing what they did in fy2021 and latest Q1'22. Animal's nutrition business as a whole for Plabs have seen flat growth for few years and the retained earnings growth in FY2020 was the smallest by value compared to the years before which is less than $2M yoy while it was ranging from $2M to $4M growth range yoy before FY2020. Hence, management decided to acquire 60% stakes in ToT it seems. By end of FY2021, we have seen the retained earnings growing again and in this case approx $5M yoy from FY2020. (2) Comparing its balance sheet in FY2020 to FY2021 and Q1FY2022, one would have noticed the changes - from a comfortable position, net cash but flat growth (FY2020) to getting out of comfort zone, net debt to acquire ToT (FY2021) resulting in utilization of its cash balances and providing working capital to its business and showing improvement in Q1FY22 again - cash balances more than total debt and improvement on its total liabilities. ToT acquisition is indeed a good add in to its business at the back of increased competition in animal nutrition business. (3) Relatively cheap comparing to its peers :) Next to observe would be the management's capability to increase its profit growth. Takes time.

You are welcome, Time. Stocks that are loved will be priced accordingly and stocks that are hated will tripled tomorrow; within the context of value investing :) Have faith in your own plans and manage it accordingly if and when the fundamental changes.