wmliang.

maximum scenario for Jtiasa's FFB production 1,772,500 MT/annual ( 70,900 hectare x 25MT )

Extracted from Roundtable on Sustainable Palm Oil (RSPO) manual:

Plantation companies with peatland development however reported
that not all their peat estates are yielding equally. Especially low
yields have been recorded on the more woody peat in Sarawak.

The actual achieved FFB yields of prime age oil palms on deep
peat are very contrasting, ranging from about 30 to less than
15 mt/ha/year. Data from the pioneers of oil palm cultivation on
peatland, United Plantations, showed that their early plantings
on deep peat during the 1960s yielded only an average of 12.9 mt/ha over a 12-year period (5th to 16th year of planting).

The main factors affecting this high yield variation are peat type, land preparation,planting techniques, fertilization, water management as well as effective pest and disease control (Peter Lim, Pers. Comms.). Low yields are also experienced by smallholders (who often have little access to financial and technical resources) and the lack of BMP implementation.

It is important to note that a proper drainage system with effective water management structures are crucial to maximize oil palm yield on peat and also to minimize GHG emissions and peat subsidence, which
is vital for prolonging the economic life span of the developed peat.

I am a bit sceptical the claim " FFB production will increase by about 30% per year compound for the next 5 years. ". We can't deny that FFB production has been growing tremendously for past few years. It does not make sense to presume that Jtiasa would grow at this compound rate in future. It is vey unlikely to achieve 30% compound growth from year 2015 onward.

FFB production
Year 2013 - 665,000 MT ( Actual )
Year 2014 - 843,000 MT ( 27% growth )
Year 2015 - 1,002,000 MT ( 19% growth )
Year 2016 - 1,132,000 MT ( 13% growth )

My calculation is based on the mature area of actual planted area of each year with an annual FFB yield from 6MT to 21MT of the trees age.

With the Wilmar's policy, it would certainly reduce the growth planting on peat land to certain extend which will eventually limit over supply of oil palm in mid.

Not much affected as most of its land bank has been planted with oil palm.

According to the shareholders list as at 29 Mar 2013, top 30 largest shareholders represents 94.95% of the entire share capital. The remaining 5% shareholders or 3,900 hold less than 9 million shares in the market.

Majority of the shareholders know the future value of Inno. They won't dispose more at current prices. You would be very lucky if able to collect more at cheap price.

Recently, some investors were purposely sold down at the price 2.4 plus for a while. I did not manage to get it at such a cheap price. It seemed that someone intended to wipe out weak holders temporary.

Theoretically, this is one of the most undervalue plantation company. Not many notice because it trades at PER 600x. I believe that it would trade above 2.00 in next few months provided CPO price stays above 2600.

PCR ( Price Cpo Ratio). It's a term use by me only.

( [ planted hectare x FEB yield per hectare x OER ] x RM 1 for every increase in CPO price] / number of ordinary shares

This ratio is to make a comparison purpose for planted area. The lower of its value, potential is higher. Of course, the results may not seems reasonable if you compare with those companies owning big portion of old mature area.

INNO PCR
1.69/ [ ( 13,000 hectare x 21MT x 20%OER ) / 188,000 ] = 5.83x

SOP PCR
6.08 / [ ( 63,261 hectare x 21MT x 20%OER ) / 443,000 ] = 10.4x

IJM Plant PCR
3.31 / [ ( 46,761 hectare x 21MT x 20%OER ) / 802,000 ] = 9.37x

Icon8888. Normally, i would do a simple screening of some plantation company with a ratio almost similar with PER. I would call it PCR.

Market share price / [ [ planted hectare x annual FFB per hectare x OER ]/ number of ordinary shares /1000].

Sabah

speakup. After you have done a proper analysis, you would understand why it's worthwhile to buy INNO even at PER 600x. This is the magic in stock market.

If I am not mistaken, theoretically INNO could be the lowest forward PER among the plantation companies if you base on the your valuation method.

Well done.

The EPS would be slightly lower this year since INNO has not completed its palm oil mill. How you get the basis for costs RM 1400/MT? thanks

You can see the growth of plantation division. Turnover growth is almost 100% when comparing between Sep 13 & Mar 13. The turnover and profit would be higher in final quarter. It indicates that INNO has just started enjoying good harvesting time.

Plantation division

Turnover:
30 Sep 13 - 8,465,000
30 Jun 13 - 6,290,000
31 Mar 13 - 4,441,000

Profit / (Loss):
30 Sep 13 - 3,038,000
30 Jun 13 - ( 132,000 )
31 Mar 13 - ( 1,562,000 )

EPS:
31 Mar 13 - 1.38 cents
30 Sep 13 - ( 0.13 cents )
30 Jun 13 - ( 0.87 cents )

Plantation land bank: 22,763 hac
Plantable area: 13,000 hac

Mature area ( accumulate):
2011 - 2,000 hac
2012 - 1,451 hac ( 3,451 hac )
2013 - 1,594 hac ( 5,045 hac )
2014 - 3,967 hac ( 9,012 hac )
2015 - 1,815 hac ( 10,827 hac )
2016 - 2,173 hac ( 13,000 hac )

Prime Mature area accumulate:
2015 - 2,000 hac
2016 - 3,451 hac
2017 - 5,045 hac
2018 - 9,012 hac
2019 - 10,817 hac
2020 - 13,000 hac

Planted of trees in year:
2011 - 2,173 hac ( Fully planted 13,000 hac )
2010 - 1,815 hac
2009 - 3,967 hac
2008 - 1,173 hac
2007 & before - 3,872 hac

I base on the trees age to estimate the FFB. Need to get back to my office to retrieve the data tomorrow.

Steelheart. The announcement in coming days would be a catalyst to breakthrough 23 cents. Next week, it is going to be a high time for Asiapac.

Hard to say. You may not enjoy good price to collect back later.

Not many interested in this counter. I am collecting tickets.

Be patient. One more week to go.

It could be attracting much interest after we have revealed information of the plantation data. The FEB production is booming from this year onward. Enjoy the party while CPO price moving up.

How to buy cheaper after this guy suddenly placed 50 lots order.

This fellow scare off the seller at 1.6+. Nobody want to sell even at 170. It can be fried easily to 180.

You should have bought many lots. I just managed to grabbed some at 1.6 +. Want to collect more at this level of prices are not easy.

Not many people notice and hard to collect more at cheaper price. Those shareholders would only sell some for fun. Waiting it to announce good results for the next few quarters. It's the harvesting period.

I have collected past few years plantation data of INNO. The FFB growth should be at least 50% in year 2014 and compound growth about 30% for year 2015 & 2016.

ckliew88. If you feel this counter would worth above RM 2.0 then why are you worry to buy at 1.6 plus?

I have not analysed Ivory.

This is a illiquid counter but upside potential is high if you look few years ahead from now. I don't expect fast money.

Let see how the investors and newspaper response tomorrow.

You can read in Explanatory Note under B2. Variation of results against preceding quarter

What a joke! profit RM 325 million?

After
- excluding net gain in fair adjustment and re-measurement of associate of RM 207million
- excluding gain in one off land sale RM 135 million

Equivalent operating LOSS RM 17 million

They would probably announce on 28 Feb 14. I am not in hurry to let go given its future potential and huge unbilled sales.

You can check it out in the financial results for 3rd quarter 2013. That's why I am willing to wait it coming announcements even though my paper profit 30% was gained less than a month.

573 million unbilled sales. Just imagine how well it would perform in coming quarter.

Currently, I focus property (Asiapac & KSL) & plantation companies. It's high time for plantation counters since CPO prices have been rising recently and potential of El Nino impact on palm oil business latter.

Bought at 3.40. It' still worthwhile for me to buy 3.50 cause i would not expect to sell at this price.

I bought Kulim & TAAN too.

I don't feel different much between 1.55 & 1.65 since the potential is there . I will collect slowly.

After making a comparison with other plantation companies, it seems worthwhile to buy now but take time to collect ticket.

It is hard to buy many shares at low price. INNO has fully planted its 13,000 hectare of land. It enjoys double digit growth of FFB production at least in next 5 years.

There are about 70% of its mature area at prime stage. Hope it would list its plantation units.

Optimus7. Thanks. With your few words response, I can feel that you have achieved high returns from your investment. I achieved my breakthrough by focusing my resource. There were few times I had invested one counter alone representing more than 50% of my portfolio. It is risky but worth for the returns.

Yeah. turbo charge. It's the 'feel' making a difference after going through long period of time. The feel of using bankers money to place a bet in the market is great.

Optimus7. Agreed with with you for the learning curve. It actually takes 12 Years for me to learn in the market. Just managed to get some peanut in that period. I can only see my capital started doubling from 2 years ago. I could be a slow learner. Part time job ma.

An Alternative: Palm Oil on Degraded Land

An attractive alternative is to expand palm oil production on degraded land instead of forested or peat land.

In this context, degraded land refers to areas that were cleared of forests long ago and that now contain low carbon stocks and low levels of biodiversity, such as alang alang grasslands. According to economic analyses by WWF1 and Indonesia’s National Development Planning Agency2, as well as fieldwork carried out by WRI and local partner Sekala, many of these areas have suitable soil for oil palm cultivation, can produce comparable yields relative to recently deforested land, and are viewed as underproductive by local communities.

A number of studies indicate that there is enough degraded land to accommodate Indonesia’s expected oil palm expansion past 2020. The Indonesian government estimates that a strategy that diverts future oil palm expansion away from peat to degraded land could reduce projected greenhouse gas emissions by 37 percent without a significant reduction in total economic benefits.

Local fund managers & retailers to support. Foreign fun are hopeless.

You are so good in turning and direct. hahaha