Iafx. No worry about the borrowing of Jtiasa. Jtiasa bet big on extreme El Niño within 3 years.

Icon8888. I will study your valuation method for plantation companies.

By looking at INNO, I guess you have spent much time to do the research for all plantation related counters. INNO used to in my watchlist but I missed the opportunity to pick up at price 1.2 .

Icon888. Your guessing on the interest paid is about that amount. Jtiasa capitalized interest 20 million as Biological Assets every year.

Thanks Icon8888. It sounds reasonable.

I may assume that such high operating costs are unavoidable every year. If this is the case, Jtiasa is heavily relied on the CPO prices that higher than the current level whereas TAAN continues enjoying good profits. Given the existing supply exceeds demand of CPO, It seems that El Niño is probably the only way to help Jtiasa to make more profit in short term.

I am puzzled with the performance of Jtiasa ( past 12 months ) after making a comparison with TAAN. Jtiasa's Oil Palm segment was actually suffering loss of RM 12,247,000 for the past rolling 4 quarters whereas TAAN had generated substantial profit before tax of RM 61,497,000. Furthermore, Jtiasa FFB production was higher than TAAN by 33%.

When I look into the last quarter results of Oil Palm segment, Jtiasa's profit margin is 12.3% whereas TAAN 33.4%. In this case, Jtiasa FFB production is higher than TAAN by 38%. How come Jtiasa was enjoying such a low margin?

No doubt Jtiasa would generate high FFB production in near future but I have reservation on its ability to yield substantial profit given its current inefficient operation results. I am not convinced with the reason of sluggish CPO prices as claimed by the management. Why TAAN did performed better even at low CPO prices. In addition, immature area of TAAN represents 26% of planted area. It will have a high potential growth FFB production in coming years.

Great reverse trend. I have been collecting at cheap prices in the past few days.

Jtiasa's borrowing is trending downward? I just know it had raised 358 million through private placement last year to reduce the gearing level. Going forward, it needs another at least 270 million to complete its mill and fully plant the remaining 7,300 hectares of land. With the current net borrowing of 714 million ( after offset investment in securities 103 million ), this loan would touch 1 billon unless windfall profit is generated from the effect of El Niño .

It is most likely Jtiasa sold major portion of their FFB to 3rd parties mill as they don't have sufficient capacity for further processing. Why profit so low? Mindboggling.

I am still puzzling with the Biological Assets of Jtiasa. Why it costs so high when comparing with TAAN even after excluding interest capitalized? The amount is more than double of TAAN.

Biological assets excluding interest: RM 1,159,816,000 ( RM 18,243/ hectare)
Borrowing interest capitalized as Biological Assets:175,471,000 (total past 8 years)

I don't have to defend myself so let the figures do the talking.

More information for comparison:

JTiasa
Quarter ended 30 Sep 2013 ( Palm oil segment )
FFB production - 234,052 tonnage
Turnover : RM 77,761,000
Profit : RM 9,577,000

Palm oil segment ( past 12 months )
FFB production: 708,859 tonnage
Turnover - 251,806,000
Profit before tax - ( 12,247,000 )


TAAN
Quarter ended 30 Sep 13
FFB production - 169,326 tonnage
Turnover - 88,495,000
Profit before tax - 29,582,000

Palm oil segment ( past 12 months )
FFB production - 531,744 tonnage
Turnover - 274,257,000
Profit before tax - 61,497,000

Jtiasa changed its accounting policies for Biological Assets since FY 2009.

Here is the explanation as stated in the annual report:

"With effect from 1 May 2008, planting expenditure incurred on newly developed land capitalised under plantation development expenditure is not amortised. Replanting expenditure of similar crops on former developed areas is chargeable to the income statement in the financial year it is incurred. In the opinion of the directors, the change in accounting policy provides reliable and more relevant information. This change in accounting policy has been accounted for retrospectively.

Upon maturity, all subsequent maintenance expenditure is charged to revenue and the capitalised pre-cropping cost is amortised on a straight line basis over 25 years, the expected useful life of oil palms. "

How the new policies affect (manipulate) financial performance ? Jtiasa makes profit 2.88 cents/ share in the rolling past 4 quarters. The amortization Biological Assets of Jtiasa is estimated base on the matured area amortized on a straight line basis over 25 years. The amount should have been amortized is RM 46,650,000. This will translate into 3.6 cents/share which is higher than the total profits in the past 4 quarters.

The companies would have shown higher profits not amortizing its Biological Assets:
Rsawit - RM 25,940,650 ( 0.95 cents/share )
SOP - RM 20,368,000 ( 3.4 cents/share )
TAAN - RM 10,975,000 ( 2.2 cents/share )

Summary of comparison between Jtiasa and TAAN. We can guess which company would offer lower risks and faster rate of growth in future.

Jaya Tiasa
Weight average number of shares: 967,997,000

Palm oil segment:
Plantable area: 70,900 hectares
Planted area : 63,574 hectares
Mature area: 55,438 hectares
Immature area: 8,136 hectares ( 13% of Planted area )
Borrowing interest capitalized as Biological Assets: 22,567,000 (2013) 22,820,000 (2012)

Timber concessions with a total area of 713,211 hectares
Reforestation:
Total Land Area: 235,859 hectares
Estimated Plantable Area: 141,308 hectares
Planted Area: 30,978 hectares

PER: 79.7
Gearing ratio: 36.7%
Dividend Yield: 0.43%
Dividend declared in past 12 months : 1%
Average costs / hectare of biological assets : RM 21,000
Non amortization of Biological assets of 1.335 billion

TAAN
Weight average number of shares: 370,537,000 ( 38.3% of Jaya Tiasa )

Palm oil segment:
Land bank: 97,855 hectares
Planted area : 35,345 hectares
Mature area: 26,161 hectares
Immature area: 9,184 hectares ( 26% of Planted area )

Timber concessions with a total area of 362,439 hectares
Reforestation:
Total Land Area: 313,078 hectares
Planted Area : 33,000 hectares

PER: 23.7
Gearing ratio: 27.7%
Dividend Yield: 2.42%
Dividend declared in past 12 months : 10%
Average costs / hectare : RM 9,020
Amortization of Biological assets of 319 million over 25 years

In fact JTiasa is worth to buy from my personal point of view but I have some reservation if someone say that JTiasa is worth better than TAAN after making a comparison.

Lol. We are here having a discussion base on the facts and data. You know how much amortization biological assets charged to P/L amount when JTIASA follows different accounting policies. It is estimated the profit to be reduced by RM 45,580,000 each year ( 1,335,419,000 x 55,438ha / 63,574ha / 25 years )

Please correct me if you guys feel that my data is not stated according to the facts disclosed in annual report & quarterly results. I am welcome for the constructive criticism.

Like this also can . I just posted the data by making a comparison and talk nothing. This is the facts for both companies in the same industry.

Why I get flagged by comparing the data between JTiasa & TAAN???

By looking at the land bank , planted area, biological assets, gearing and Number of Shares for Jtiasa & TAAN, who will offer better future earning growth. Lol.

JTiasa has large amount of Biological Assets while comparing with TAAN in term of RM/hectare. TAAN shows RM 9,020/hectare whereas JTiasa RM 21,000/hectare. It's probably due to non amortization and capitalized interest expense. I don't know long the biological assets can be kept without amortization.

On the surface, we can't make a simple comparison between JTiasa and TAAN by looking at final P/L due to different accounting policies in Biological assets. JTiasa may show higher profit for not amortizing it's biological assets and capitalizing the large interest expenses in Biological assets each year.

JTiasa
PER: 79.7
Gearing ratio: 36.7%

3rd Quarter 2013 ( Palm oil segment )
Turnover : RM 77,761,000 ( 31.7% of turnover)
Profit : RM 9,577,000 ( 36.8% of profit )


TAAN
PER: 23.7
Gearing ratio: 27.7%

3rd Quarter 2013 ( Palm oil segment )
Turnover : RM 88,495,000 ( 40.8% of total turnover)
Profit : RM 29,582,000 ( 64.1% of total profit)

Jaya Tiasa
Weight average number of shares: 967,997,000

Information as at 30 June 2013
Plantable area: 70,900 hectare
Planted area : 63,574 hectare
Mature area: 55,438 hectare

Balance to be planted : 7,326 hectare
Estimate costs for balance to be planted: RM 153,846,000 ( 21k x 7,326 hectare)
Balance Construction costs of palm oil mill: RM 113,000,000 ( Estimate Costs RM 235,000,000 )

Biological assets Total : RM 1,335,419,000
Average costs / hectare : RM 21,000

TAAN
Weight average number of shares: 370,537,000 ( 38.3% of Jaya Tiasa )

Information as at 31 Dec 2012
Land bank: 97,855 hectare
Planted area : 35,345 hectare ( 55.6% of Jaya Tiasa )
Mature area: 26,161 hectare ( 47.2% of Jaya Tiasa )

Biological assets Total : RM 318,831,000
Average costs / hectare : RM 9,020

JTiasa may do well in the long run but the accounting policies of Jtiasa is a bit tricky. Biological assets 1.335 billion are not amortized and interest expenses of 22 million is capitalized as biological assets last year.
Biological accounting policies of TAAN reflects the true picture by amortizing over 25 years of its 318 million being capitalized and 10 million is charged to Profit and Loss last financial year.

Good progress in KL-S'pore high speed link plan - joint ministerial committee

Work progress on the High Speed Rail (HSR) link between Kuala Lumpur and Singapore is well on track, according to a statement issued after the 10th Malaysia-Singapore Joint Ministerial Committee for Iskandar Malaysia (JMCIM). The HSR Work Group has positive progress since its formation in December last year, it said. Discussions have begun with a working session this month, where the group had identified matters for joint deliberations between the two countries.

In February 2013, Prime Minister Datuk Seri Najib Razak and Singapore Prime Minister Lee Hsien Loong announced the 330km project at an estimated cost of US$12bn. The project, which is slated to be completed in 2020, would shorten travelling time to just 90 minutes between the two cities. (BT)

How to feed those fat directors with last quarter turnover of 12 million. Property division contributed 3 million in turnover whereas Plantation 8.8 million. Dutaland posses lands in prime location but nothing happen.

Having a good assets are not really good to certain companies. Some directors are contented and enjoying life too much. Top relax so no need to say for the bottom.

Executive directors of Dutaland are having a good life. No need to work more also drawing 3 million salary each year. Latest Turnover 12 million and suffering loss 5 million after excluding one off gain 44 million from disposal of subsidiary.

No major correction since the highest volume 73 million traded on 9 Jan 14. It moved even higher today. Proven big players has been collecting tickets for the past few days rather than playing hit and run game. I am expecting it will climb further. cheers.

Leon7. I am not good running. That's why i have to walk slowly until reach my target.

Heart not steady so some would run away with a small profit.

Congratulation guys.

Leon7.

Star performer Ecowld up from 0.33 ( Lowest on 2 Jan 13 ) to 4.15 ( 20 Jan 14 ) It was mainly due to investors believing its potential prospects after being taken over by Liew.

Investors are mostly favored with companies with a foreseeable future prospects. Asiapac is another potential counter that investors believe its bright future. Is it Asiapac being overvalued now? I don't think so.

Asiapac ia back to all time high since 3 years ago. It is due to the good future prospects of high unbilled sales 573m & Imago Mall.

Take a close look on the share price performance of other property counters for the past 3 years:

1. SP Setia - 4.16 ( Highest on 22 Apr 11 ) 2.88 ( 20 Jan 14 ) - loss 31%

2. TROP - 2.14 ( Highest on 29 May 13 ) 1.24 ( 20 Jan 14 ) - loss 42%

3. UEMS - 3.66 ( Highest on 29 May 13 ) 2.12 ( 20 Jan 14 ) - loss 42%

4. UOADEV - 2.75 ( Highest on 21 May 13 ) 1.85 ( 20 Jan 14 ) - loss 33%

5. YTLLAND - 2.04 ( Highest on 7 Feb 11 ) 0.9 ( 20 Jan 14 ) - loss 56%

Tommylim, I'm sitting tight to enjoy a roller coaster ride if any. Asiapac forms 30% of my entire portfolio. TP 25 cents was speculated by some forumers for Mah to sell it off.

It seems that Asiapac is run by a professional team without much interference from the substantial shareholders. Mah seems an investor in this company. He was sued by Ambank 70m as a result of investing in Asiapac. As an investor for more than 10 years in a company without enjoying fat salary, are he willing to dispose it off at 25 cents speculated by some forumers ?

Just discovered something. Mah pledged the shares to Ambank. He could be not in the full position to control it.

'Disposed of 2,145,700 ordinary shares in open market by Ambank (M) Berhad for the period from January 2013 till May 2013

He was sued for not executing an option. Its unbilled sales is enough for 2 years operation.

Mah is a registered substantial shareholder of Asiapac for more than 10 years and yet he has never sit on the board to earn fat salary. He was sued by a bank for 70m few years ago. His uncle, over 70s, is sitting on the board of SMI( substantial shareholder of Asiapac too) drawing few million salary each year. More important is SMI suffered loss. Weird.

Amazing figures, 573 million unbilled sales.

Tommylim, do you know any info of Asiapac substantial shareholder, Mah Sau Cheong?

It needs some catalysts to boost the price. Investors want track records of Asiapac. Coming quarterly announcement is crucial to prove its future business potential. Another is to hope Mah to let go his shareholdings soon.

Large volume. It seems no effect by T+3. Big players are accumulating more.

Retailers rush to expand in Kota Kinabalu

By Madiha Fuad of theedgemalaysia.com
Monday, 13 January 2014 12:09
KUALA LUMPUR: Retailers are rushing to expand their presence in Kota Kinabalu as the retail sector in Sabah’s capital is set to grow 5% to 10% in the next few years.

“Parkson has been in Kota Kinabalu since the 1980s. The market there is good. Currently, we have two stores — one in Karamunsing and another in One Borneo Mall,” Parkson Holdings Bhd general manager Loh Chai Hoon told The Edge Financial Daily.

Parkson is slated to open its third store in the soon-to-be launched Imago Mall, which is owned by Asian Pac Holdings Bhd.

The Imago Mall, to be completed in the fourth quarter of this year, has attracted international and local retailers, some of which are making their debut in Kota Kinabalu.

“This will be our largest store in Kota Kinabalu. The opening of our third store in Sabah demonstrates our commitment to grow our presence there,” said Loh.

The country’s largest department store operator does not rule out the possibility of opening another store in the city.

“We will look at various factors before we plan on expanding and bringing in one more outlet into Kota Kinabalu, but we are open to it if the opportunity arises,” said Loh.

Making its first entry into Kota Kinabalu is Aeon Fantasy (M) Sdn Bhd, which will be opening its store in the Imago Mall.

“This will be our first project in Sabah. Our concept is very new and it will bring a different experience to the local community,” managing director Chong Swee Ying told The Edge Financial Daily.

She said opening an outlet in Sabah is in line with the company’s strategy of expanding in Malaysia.

“We plan to open at least three outlets there,” she said.

Bonia Group and Mcat Box Office Sdn Bhd are also making their first foray into Sabah through their brands Sembonia and MBO Cinemas.

Valiram Group’s Charles and Keith, Victoria’s Secret and DNP Clothing Sdn Bhd’s Dorothy Perkins, Miss Selfridges and Topshop are among the retailers that are bringing local and international brands into Kota Kinabalu.

Other retailers include Swarovski (M) Trading and Padini Group.

On Kota Kinabalu’s development as a port and commercial hub, Asian Pac chairman Tan Sri Megat Najmuddin said Sabah should further develop itself as a commercial hub.

“Dubai and Singapore have opened their waters and attracted the best talents to develop their countries. They managed to reel in many investments worldwide,” he said.

Comparing Kota Kinabalu to Iskandar Malaysia, Najmuddin said the latter is a greenfield venture which will take years to prove itself, while Kota Kinabalu is already a city with its own attractions.

Najmuddin is bullish that the annual retail spending in Kota Kinabalu will exceed RM1.4 billion.

“The Kota Kinabalu International Airport is the second busiest airport in Malaysia with about three million tourists a year,” he said.

Najmuddin said tourists from South Korea, Japan, Taiwan, Brunei and Hong Kong visit the city that provides investment opportunities and growth for the whole state.

There must be big player bought more shares from the open market few days ago.

When comparing the annual report 's shareholder list between 2013 & 2012, this guy,Jimmy Thomas @ James Abraham Thomas, has almost acquired 5% of the shareholding from the market. I believe it happened in Jun 13 when the shares exchanged in hand almost 70 million.

Many good counters are traded at cheap price. Not worth insist CSL.

Thanks guys for the Imago site visit and update us the development progress. It is really helpful to us to make a decision.

Target above 30 cents after putting Imago Mall into operation.

KUALA LUMPUR: Malaysia has granted a substantial tax break to a zone in a showpiece investment project near Singapore, a move likely to provide crucial support to a $800 million initial public offering of the area’s developer next year.

The Medini area in the southern state of Johor is the only section of the $30 billion Iskandar Development Region to get an exemption from a 30 percent property gains tax announced in October to cool soaring property prices, government officials said.

The area is being developed by Medini Iskandar Malaysia, a company that is 60 percent owned byIskandar Investment, a corporation controlled by sovereign fundKhazanah Nasional Bhd . Japanese conglomerate Mitsui & Co Ltd and Dubai-based realtor United World Infrastructure each own 20 percent.

“Medini in 2006 and 2007 was a sparsely populated area and not a preferred investment location,” Ismail Ibrahim, chief executive of Iskandar Regional Development Authority (IRDA), told Reuters when asked why the area received an exemption.

“The objective is to provide the catalyst to drive investments into Medini,” he said. Since its inception in 2006, Medini was exempt from property gains taxes.

Medini Iskandar declined to comment about the latest tax exemption.

The tax break, however, means the company should be able to attract more funds into the Medini area, helping the prospects for its IPO as well as the government, which is seeking to lure more investors, especially from cash-rich Singapore, into the Iskandar region without inflating a broader property bubble.

“It (the exemption) certainly gives it an edge over others in Iskandar,” said a banker involved in Medini Iskandar’s IPO, which is excepted to be launched in the first half of 2014.

Bank of America Merrill Lynch, Goldman Sachs and Maybank have been chosen to manage the planned listing, according to Thomson Reuters publication IFR.

Other major listed developers in the Medini zone include Mah Sing Group, Sunway Bhd, Eastern & Oriental and WCT Holdings Bhd.

ISKANDAR’S APPEAL

The whole Iskandar region has seen property prices climb in recent years due to speculators and higher demand from Singaporeans seeking a break from sky-high prices in the city-state. U.S., European and Chinese firms have also realised the potential of the area as a manufacturing hub.


The recent tax hike has left other Iskandar developers like Iskandar Waterfront, partly owned by Johorstate, and UEM Sunrise Bhd, Malaysia’s biggest real estate company, bracing for a chill next year.

Both companies declined to comment when asked about the tax exemption for Medini.

Iskandar Waterfront, which is developing a zone directly across the causeway that links Singapore withJohor Bahru city, has, however, delayed a $300 million IPO to the end of 2014 from the first quarter to gauge the impact of the property cooling measures, people with knowledge of the matter said last month.

The sources declined to be identified because the information was confidential.

The Iskandar Development Region struggled to attract investors at first, but improved infrastructure and soaring property prices in Singapore burnished its appeal.

Total committed investments by local and foreign firms in the area until September this year amounted to 128.21 billion ringgit ($39.87 billion), almost ten times a much as when the zone was first set up in 2006, IRDA officials said.

Local investors account for almost 65 percent of the total.

Medini, the largest township across the narrow strait from Singapore, is only a small part of one of the five sections that make up the Iskandar Development Region.

The area that was once mostly rubber and palm plantations is now home to a popularLegoland theme park resort, a production centre for Britain’s famed Pinewood Studios as well as some of the most developed infrastructure in the whole Iskandar region, government officials say.

Medini Iskandar has so far spent 5.9 billion ringgit ($1.8 billion) on developing the area, with $600 million going on well-lit roads and sewage treatment facilities. The rest was an initial capital injection, according to the company website.

“Medini came in at a time of doldrums, nobody wanted to go to Iskandar,” Shahrir Abdul Samad, a member of parliament for Johor Bahru, the state capital of Johor, told Reuters.

Above 0.30 is also possible. who knows....may be someone would take it over. haha