India Gets Lowest June Rain in 5 Years as El Nino Looms

http://www.businessweek.com/news/2014-06-30/india-posts-lowest-june-rainfall-in-five-years-as-el-nino-looms

MSC is set to turnaround.

Investment abroad is certainly attracted higher inherent risks due to social instability, environmental or power struggling within political systems of a country. Natural resources-extracting firms are especially likely vulnerable to these factors.

MSC is one of the victim for venturing Indonesia. It was forced to abandon investment in smelter and dredging facilities , via its 75-percent-owned Koba Tin, worth more than USD 60 million. Indonesia government has treated MSC unfairly by refusing to extend the permit to operate a mine which Koba Tin is entitled to a second extension of 10 years to 2023. State-run PT Timah, which is a minority shareholder of Koba Tin, would take over the concession. MSC has suffered huge exceptional loss as a result of government discriminated action.

After having gone through a major setback in overseas venture, MSC is strived to revitalize itself by restructuring the group. It has stop bleeding by divesting Koba Tin and making sufficient impairment provisions of its associates. MSC has cleaned up mess on investment abroad whether in the form of associates or JV. The rest is history.

Tin smelting segment remains the bread and butter over the past 10 years. This segment alone has contributed PAT 55 million ( EPS 55 cents ) in the last 4 rolling quarters.

Share price dropped to bottom 2.70 in Feb 2014 before staged a strong rebound to as high as 3.70. It went through another two months consolidation period after hitting peak. Currently, its price traded at PER 6.1 times. It is the ripe time to grab the share at this price?

Financial performance of International tin smelting:

31 Mar 2014 - EPS 12 cents ( PAT 12 million )
31 Dec 2013 - EPS 27 cents ( PAT 27 million )
30 Sep 2013 - EPS 10 cents ( PAT 10 million )
30 Jun 2013 - EPS 6 cents ( PAT 6 million )

Year 2013 - PAT 52 million
Year 2012 - PAT 57 million
Year 2011 - PAT 70 million
Year 2010 - PAT 69 million
Year 2009 - PAT 46 million
Year 2008 - PAT 18 million

Why invest in MSC:

1. Share price traded at low multiple PER 6.1 times
2. Core business, tin smelting segment, has proven to be a profitable business more than a decade
3. Price of tin rise above USD 25,000 per ton given lack of new tin mines
4. Basically, all overseas associates and JV valued at NIL as costs associated with divestment of Koba Tin or impairment on Associates outside Malaysia has been fully charged to profit and loss last year.
5. Indonesia ban exporting mineral ore
6. Dual-listing on the SGX
7. Exploring the economical viable through large scale mining for potential tin reserves in Eastern and Western Belts of Peninsular Malaysia are estimated at 900,000 Mt

This counter has to cool down for a moment before marching forward. It has been trending upward since Mr. Koon acquired a large bloc at cheap price.

Two palm oil mills with the capacity 120MT/hour and 60MT/hour are expected to be commissioned in 3rd/4th Quarter 2014. The obvious improvement in yield will only happen in year 2015.

你知道是誰在Jtiasa做庄嗎? 價格向上或向下依賴於大戶.

Cheap sales was only available few days ago. If I am not mistaken, they announce quarterly results today.

Second round goreng time.

Betting for turnaround in near future.

I don't understand how RHBCap's CFA worked out PER of Jtiasa 15.5 times(CY 14) & 11.4 times(CY 15).

Currently, Jtiasa is traded at PER 46 times with rolling 4 quarters EPS 5.46 cents. To achieve PER 15.5 times for CY 14, it needs make a very goods profits 11.4 cents in final quarter to cover shortfall for the last 3 quarters.

EPS:
FY 2014 - 4th Qtr - 11.4 cents???
FY 2014 - 3rd Qtr - 0.84 cents
FY 2014 - 2nd Qtr - 2.05 cents
FY 2014 - 1st Qtr - 1.97 cents
FY 2013 - 4th Qtr - 0.60 cents

Base on its existing financial performance, it's really going to be an uphill battle for Jtiasa to catch up PER 11.4 times or EPS 21.6 cents or profit after tax 210 million in CY 15. Is it his assumption based on optimistic CPO prices rising to RM 3,500/mt in next few months?

Wonder who are those unlucky or herd mentality guys buying at the price 2.70 from a savvy investor.

'tongkat' is an inherited privileges to Malay. There is no reason to throw the 'tongkat' away. There are more than 15 million in Malaysia. Not many would really benefited from the crutches. For those who has not enjoying tongkat much then why they agree to scrap it. In fact, they would even request more 'tongkat' to assist them walking.

It takes a bit more time to see its log production level making a returns before confirming turnaround.

VT slap his own face if the price of BJCorp still maintains at this level. It's a bull run market. goring time. How can he let his counter to trade at such cheap price. Something must be brewing from now on.

I will buy back if the price slide to 25 cents.

This counter is seriously undervalued comparing with its peers. With the support from Mr. Koon, I believe it would move up higher in near future.

Prices slide to bottom 45 cents, the lowest since year 2009, before rebounded to current level. It could be a good bet.

Subur Tiasa is expected to announce good quarterly results by end of this month due to surge in log production and higher log selling prices.

Log production:
30 Apr 14 - 152,271 cm
31 Jan 14 - 83,141 cm
31 Oct 13 - 123,048 cm
31 Jul 13 - 139,279 cm
30 Apr 13 -133,560 cm


PER: 14.6 times
NTA: RM 3.60

Palm Oil planted area: 8,100 hectare

EPS:
30 Apr 14 - ?
31 Jan 14 - 4.37 cents
31 Oct 13 - 4.86 cents
31 Jul 13 - 4.6 cents
30 Apr 13 - 1.18 cents

El Nino is ‘already here’

http://www.aljazeera.com/weather/2014/06/el-nino-already-here-201461585250418750.html

Net Cash is 134 million after including borrowing 42 million. Net Cash per share should be 76 cents.

Those plantation companies adopting this policy would benefited tremendously by boosting its profit before the trees get into old mature stage. Once the trees entering replanting stage, they have to suffer squeezing in profits by charging all replanting costs in one go.

Replanting expenses are charged to profit or loss in the year in which they are incurred. There are many more plantation companies adopting this policies.

Please read FGV accounting policies on Biological assets:

Oil palm and rubber plantations

Biological assets are new development costs which are accounted for under the capital maintenance method. Under the capital maintenance method, planting development costs incurred (for eample land clearing and upkeep of trees) up to the maturity period of zero (0) to three (3) years for oil palm and zero (0) to seven (7) years for rubber are capitalised and not amortised, and are shown as a noncurrent asset net of accumulated impairment losses.

Biological assets will be subject to accelerated depreciation if the existing planted area has been earmarked by the Directors for replanting with a different crop, after writing down the carrying amount to its recoverable amount.

Replanting expenses are charged to profit or loss in the year in which they are incurred. When the planted area is replanted with a different crop, the carrying value of the existing biological assets is expensed off in profit or loss and the planting development costs in respect of the new crop is capitalised.

Know why FGV favor to delay the replanting program? It is all about short term impact on its P/L. The management team wanted to keep their rice bowl and scarifying longer term prospects.

Imagine if replanting program is being exercised. FGV may need come out 2.8 billion ( assume replanting costs 15,000/ hectare ) for 185,000 hectare of old crops in the next 5 years. Of course, this amount of cash is not a big deal to FGV. What they really concerned is the impact on P/L.

In average, replanting costs 560 million each year. The amount would charge to P/L in the year in which they are incurred that more than 35% of FGV last financial year profit before tax.

If Mkland owned good location lands, It would have developed long time ago. I heard that those landbank are not really suitable for property development. But it's good for telling investors that this counter has been severely undervalued landbank for goreng purposes.

The owner would suck all your money into his pocket. Don't hope any cash distribution from PMCorp. He won't be so generous to make it happen.

Here's the list of vampires under the controlled of this owner:

1. MUI - Negative Reserve ( 2.165 billion ) & Net borrowing ( 580 million )

2. PMIND - Negative Reserve ( 85 million ) & Net borrowing ( 85 million )

3. PMHLDG - Negative Reserve ( 34 million ) & Net borrowing ( 20 million )

4. PMCAP - Negative Reserve ( 351 million ) - Delisted in May 2014.

By looking at FGV age profile, it may need to come out about RM 3.5 billion for replanting the old matures trees 185,00 hectares in the next 5 years. Currently, Market capitalization of FGV is RM 44,000/ hectare. I don't think it's really worthwhile to spend such big amount of money for buying an estate offering 53% old matures trees.

I am not a fund managers who has plenty of money to invest for long term. I am just a small fly interested in investing counters own young palm oil trees which could yield great returns in the next 3 years. lol.

When you see the age profile then you would know why FVG needed to be listed in bursa.

Total mature areas 285,680 hectare & Immature areas 62,710 hectare.

Age profile of the planted areas:
- Immature - 18%
- Mature ( 4 - 20 years ) - 29%
- Old Mature ( 21 - 25 years ) - 31%
- Due for replanting ( > 25 years )- 22%

It's more reasonable to base on the stakes for sharing portion of planted area from joint venture , subsidiaries and associates for comparison purposes. It shows that SWKPLNT is still the lowest in term of market capitalization per hectare among three companies.

1.SWKPLNT
- Market Capitalization per hectare: RM 24,240

- Number of shares: 279,564,000 units
- Market capitalization: RM 0.749 billion
- Planted areas year 2013: 30,904 hectare ( excluding non controlling interests portion in subsidiary Pelita Suai)

2. KULIM
- Market Capitalization per hectare: RM 53,500

- Number of shares: 1,278,731,000 units
- Market capitalization: RM 4.45 billion
- Planted areas year 2013: 83,176 hectare ( Malaysia 47,107 hectare + NBPO 36,069 hectare) note: 49% stakes in NBPO of 73,610 hectare

3.THPLANT
- Market Capitalization per hectare: RM 34,450

- Number of shares: 882,910,000 units
- Market capitalization: RM 1.854 billion
- Planted areas year 2013: 53,810 hectare ( excluding non controlling interests portion in subsidiaries and associates like Hydroflow, Bakti & Sabaco, Pelita Gedong & etc)

Kulim is actually not really undervalued after taking into account 49% stake in New Britain Palm Oil. Market Capital per hectare would be RM 52,000. This value is more than double of Swkplnt.

Not many people is willing to buy this counter now. I like to buy while the prices stay at low level. Latest quarterly results was over my expectation. I will collect more.


EPS: 6.23 cents (Qtr 31-3-2014)
P/E: 14.70 times
EPS: 17.7 cents

Dividend yield: 3%
Dividend: 8 cents / share

Mature area (2013): 26,728 hectares
Immature area (2013): 4,918 hectares or 18.4% of mature area

Facts will show up next week.

It depends how you interpret the results base of the facts of ' 1Q14 net profit of MYR5.6m (+75% YoY, -85% QoQ)'. It would rather disappointing while comparing with 4Q13.

With an increase in planted area in year 2013, SWKPLNT is the lowest in term of Market capitalization / hectare RM 23,000

P/E: 19.16 times
EPS: 14.20 cents

Dividend yield: 3%
Dividend: 8 cents / share

Mature area (2013): 26,728 hectares
Immature area (2013): 4,918 hectares or 18.4% of mature area

Think FFB 4,000 Mt per month will only be possible in the end of this year when more trees reaching mature stage.

Bear in mind, Oil palm age from 5-8 years is considered young palm and 9-20 years is reaching prime. Age of 5-8 years yield less crop and fruit size small.

The FFB production will grow gradually. It may take a bit time to wait the trees to reach prime stage. If I am not mistaken, WTK started planting 2,000 hectare in year 2007 and with an average of 1,500 hectares each year until 2012.

Why you said 2009 AR is wrong?

cy, FFB production stays on the right track for the past few years. The growth rate is expected to be at least 100% for the next 3 years. In a maximum scenario the FFB production would reach 200,000mt per annum.

FFB production:
Year
2013 - 15,700 Mt
2012 - 7.300 Mt
2011 - 2,500 Mt

WTK timber segment alone has been offered a good profit to the company over the past few years. Bear in mind, it planted 9,700 hectare of Palm Oil trees as at 31 Dec 2012. I would expect the planted area grow to 10,700 hectare until last year. More important is the plantation segment would contribute positively startng this year as more trees entering maturity stage.

DY: 2.07%
PER: 10.77 times

EPS:
1st Qtr 2014 - ?
4th Qtr 2013 - 4.46 cents
3rd Qtr 2013 - 3.21 cents
2nd Qtr 2013 - 2.69 cents
1st Qtr 2013 - 2.17 cents

The most important is to buy a share with plenty margin of safety. If we take a look of the market capital / hectare for THPLANT, KULIM & SWKPLNT, it offers much more than enough. All these shares are still traded at dirt cheap prices.

It's rather unrealistic for searching a plantation company giving a current dividend yield of 5%. GenP & Kluang would probably meet your criteria which offer more than 5% after taking into account special dividends.

Vietnam serves as a gateway to exporting products to the members of Trans Pacific Partnership (TPP) and ASEAN countries. Those Taiwanese companies don't have much choices in order to enjoy such benefits. Furthermore, they would still able to enjoy low unskilled labor costs in the next few years. Riot is just a temporary setback.

There are some companies distribute a decent dividends. Share price is not primarily due to low dividend payout.

Dividend Yield:
SWKPLNT - 3.27%
THPLANT - 1.72%

Potential of moving upward due to :
- Announcing good quarterly result before end of the month.
- High immature palm oil tree 27,399 hectares or represents 83% of mature areas.
- Low valuation as compare with its peers.
- EPF started acquiring shares last week
- High gear but strongly backed by Lembaga Tabung Haji ( 71% shareholding )

WTK has started the engine. It would move higher before announcing good quarterly results in 2 weeks time.

It is still considered cheap to collect at current price. I am expecting the coming eastwind (quarterly results) to make a break through at this price level.

WTK:

DY: 2.07%
PER: 10.77 times
Gearing: 6%

EPS:
1st Qtr 2014 -
4th Qtr 2013 - 4.46 cents
3rd Qtr 2013 - 3.21 cents
2nd Qtr 2013 - 2.69 cents
1st Qtr 2013 - 2.17 cents

Its hard to buy below 25 cents at in the near term. I should have bought more when it was dropped at 24 cents last week.

I would expect WTK to generate more profit than the previous quarter in the coming announcement since the log production for 1st Qtr 2014 was 13% higher than 4th Qtr 2014. I believe it would head north at least after the announcement.

I was also puzzled with the warrant went up today. This's not the first time the warrant shot up suddenly to 88 cents from 84 cents. It had happened few times last month.

Big players have a lot of tickets on hand now. Slaughtering can be initiated against contra players easily while the whole market is not doing well.