https://klse.i3investor.com/blogs/gambler/2021-06-19-story-h1566936185-TENAGA_and_TENAGA_C85.jsp

Next Monday, will TENAGA-C85 catch up?

Hohoho.........

Today I bought 300000 units of TENAGA-C85 at RM0.05,

Now its intrinsic value = (10.44 - 9.6337) / 6.7436 = RM0.1196.

Q to buy at 4.98.

With the current SERBADK and SERBADK-WA of 0.625 and 0.09,

The IRR is only 3.16%.

Raider,

I just show how to calculate SERBADK performance up to Last Friday closing price.

I have no idea on SERBADK accounts.

08.02.2017, KLCI=1688.50
04.06.2021, KLCI=1578.45
Loss of 1578.45 / 1688.50 - 1 = 6.52%

Assume KLCI's Dividend Yield = 4.00%

SERBADK so far out perform KLCI by 7.26% + 6.52 % - 4.00% = 9.78%.

https://klse.i3investor.com/blogs/gambler/2021-06-06-story-h1566076216-SERBADK_Internal_Rate_of_Return_IRR_since_Day_One_of_Listing.jsp

So far the return since day one is 7.26% per year.
What about next week?
I do not know.

I tot uncle is an engineer.

How could he get sen from sen divided by sen?

How could he graduate from university?

EPS divided by Share price is actually Earning Yield.

pjseow, we actually look at the same document.

You look at the chart that separate the nitrile and latex, which you get 23.1 / 18.0 for year 2019, and 27.2 / 18.5 for year 2025.

I look at the combination ASP, which is 19.2 and 21.5 for year 2019 and 2025.

The way I estimate TOPGLOV profit is simple,
1) Revenue = Sell volume * ASP,
2) Net Profit Rate = 9.73% * Revenue, 9.73% is from pre-pandemic year 2015-2019.

I believe if the raw material / labour cost increase, the ASP will go up as well because all manufacturers face the same problem, the net profit rate for TOPGLOV will be more or less the same.

The profit growth for TOPGLOV is mainly due to capacity growth.

The exceptional high ASP during Covid pandemic is just a big bonus from the sky.

pjseow, I think MARGMA prediction on the post pandemic ASP 40-60% higher than the pre-pandemic is rubbish. They have own interest in it, of course try to say something positive, hopefully can help to push up the ASP.

A safer prediction is from Frost & Sullivan Report, they say the ASP will be 65.4 / 39.5 / 25.9 / 23.0 / 21.5 for years 2021/2/3/4/5.

Look at this ratio = Net Profit / Revenue for the past 5 years before pandemic.
1) FY2015 = 11.2%
2) FY2016 = 12.5%
3) FY2017 = 9.8%
4) FY2018 = 10.3%
5) FY2019 = 7.7%

To play safe, discard the highest i.e. 12.5%
Take average of the rest = (11.2% + 9.8% + 10.3% + 7.7%) / 4 = 9.73%

TOPGLOV said their capacity will be 205b pcs by Year 2025,
Assume their production running at 85%,
Annual production = 205b * 85% = 174.25b pcs

Frost & Sullivan Report said that the ASP will be USD21.50 by Year 2025,

Revenue = 174.25b * 21.50 * 4.1 = RM15.36b,

Net Profit = 9.73% * 15.36 = RM1.49b,

EPS = 1.49b / 8.02b = RM0.186

The fair PE was around 30 times before pandemic,
Therefore the fair price for TOPGLOV in Year 2025 = 30 * 0.186 = RM5.58,

We buy TOPGLOV at or below RM5.58, enjoy the high dividend yield for the next few years and very likely we can sell it at the same price RM5.58 in Year 2025.

How nice?

KMLOONG is more like a Palm Oil Mill than a Oil Palm plantation company, expensive FFB come in and expensive Palm Oil out, the profit margin will not increase too much.

You should also look at BKAWAN, a better choice than KLK.

Look at the numbers tell you the story, i.e. the YoY of FFB production:

JTIASA:
2018: +2.0%
2019: +4.6%
2020: -18.2%

SOP:
2018: -2.5%
2019: +0.1%
2020: +1.2%

TAANN:
2018: -1.5%
2019: +2.7%
2020: -5.1%

SWKPLNT:
2018: +3.4%
2019: +14.4%
2020: +21.3%

The above 4 companies have estates only in Sarawak, so good for comparison, because they face the same weather, workers and etc.

Now, look at big company KLK which have estates in Peninsular, Sabah and Indonesia but none in Sarawak.

KLK:
2018: +4.0%
2019: -0.8%
2020: -1.3%

Good Info.

https://klse.i3investor.com/blogs/gambler/2021-02-06-story-h1540987203-SWKPLNT_Growth_and_Dividend_Play.jsp

Growth and Dividend Play.

Aiya.

Except for leap year, all February have 4 S/M/T/W/T/F/S days.

What a joke!

The profit margin will sure eventually drop back to a reasonable level.

Therefore,
We should not use the current EPS and say the PE ratio is cheap,
we should not also use the future EPS and say the PE ratio is too high because we should consider the extra profit earned during the very good timenow.

So in my opinion, we should use discounted model which capture both.

I think all the 4 glove kings are overpriced. Take HARTA for example, market cap per annual production is around RM1.00 per piece of glove produced. Recently KLK said they are venturing into medical glove (currently produce non-medical gloves). By investing 200 million, they can produce 4.5 billion PCs annually, meaning RM0.05 per piece of glove produced. RM1.00 compare to RM0.05, that is 20 times difference. We may say HARTA is better in term of efficiency and profit margin, but a 20 times difference is too much. Some more KLK has rubber estate, and its mother BKAWAN now already acquired CCM, and have all the chemicals for glove manufacturing.

No doubt the demand for gloves will keep growing.
However, there will be more new companies venturing into glove manufacturing.

For example, KLK has been producing gloves, and now expanding to medical gloves.
By just investing 200 million, they will produce 4.5 billion pcs a year.

Look at SUPERMX latest quarter result, PBT/Revenue=1049/1353=77.5%.
No business can maintain that kind of profit margin for many quarters.
Very soon the margin will drop to a more reasonable level.

Thanks.

https://klse.i3investor.com/blogs/gambler/2021-01-16-story-h1539379417-HARTA_Valuation_by_Discounted_Model.jsp

KYY, I agree that the EPS will increase further for the next one or two quarters. However, the EPS will soon drop drastically when more supply from existing and new glove manufacturers. How soon I don't know but I believe it is quite soon. It is better to use discounted model to estimate the fair value for SUPERMX.

Just ignore him.

The correct way to estimate the fair value of glove companies:
1) Estimate/list all the future Quarterly EPS before their earning back to normal.
2) All the above EPS to be discounted back to today, i.e. Present Value of them.
3) Guess when will their earning drop back to normal, 2023? 2024? or 2025?
4) Guess what will be their yearly EPS when they are in normal market?
5) Guess what is the reasonable PE ratio when they go back to normal, 30, 40 or 50?

Sum up the above and that is your estimation of their today's fair value.

Haha....People expect the ASP to go down very soon but KYY still use the current EPS to estimate the fair price.

Bought some at 10.48 on 31st afternoon.
Then Q to sell at 10.52 after 4:45pm,
hope it could be done at much higher than 10.52 at 4:50pm,
but it was not happened.

Then I read the good news of 2.44B, or about RM0.43 per share.
Hope for the best to happen on Monday.

The moment Investment banks sell CW, they will buy mother shares for hedging.

When mother share move up and down, they will minor adjust the hedging quantity because the effective gearing change per mother share movement.

The worst thing that the investment banks don't want to see is the mother share plunge below the exercise price, because they might lose money from the mother shares that they hold for hedging.

The moment Investment banks sell CW, they will buy mother shares for hedging.

When mother share move up and down, they will minor adjust the hedging quantity because the effective gearing change per mother share movement.

The worst thing that the investment banks don't want to see is the mother share plunge below the exercise price, because they might lose money from the mother shares that they hold for hedging.

Look for item "Segment cost of sales" = 26,357,000, page 15 of Q3 report.
Then sum up 3 months FFB production = 103,307mT for Q3, from Monthly Announcement,

Make x = 103,307, and y = 26,357,000,
Do the same for all quarters starting from Jan-Mar 2018.

So you will have total 11 points, make a xy chart.

Then apply/draw a trend line y=mx+c,

You will get m=RM158.7, and c=RM9,970,400.

You can use this y=mx+c to estimate the future profit from the estate operation.

Of course this will not be accurate, but at least better than nothing.

At today closing:
HARNLEN=0.715
HARNLEN-WB=0.210
Implied Volatility=28.7%

https://klse.i3investor.com/blogs/gambler/2020-11-25-story-h1536610999-HARNLEN_WB_s_IMPLIED_VOLATILITY_IV.jsp

I bet on HARNLEN-WB.

It is very easy to estimate SWKPLNT profit, because the reporting by the company is very detailed.

The management has targeted FFB production growth of 18% to 415k mt for FY21.

With 415000 mT over 35076 Ha, it is only 11.8 mT / Ha, it is still below the norm of 15 mT / Ha in Sarawak. For comparison, it is about 15 mT / Ha for JTIASA, TAANN and SOP now.

SWKPLNT production was low before year 2018, TAANN bought 30.5% equity and joined in the management, bring along their experience from TAANN, FFB production improving very much since then.

With 415,000 mT in 2021 and CPO at RM2500, SWKPLNT should be able to earn RM0.26 per share.

I guess that was why the management wanted to pay another 5 cents dividend for Q3, I guess from now onwards they would pay 5 cents for every quarter or total 20 cents a year.

The balance sheet of Q3 is so good, Net borrowings (Loan / borrowings minus Cash and cash equivalent) is only 18.4 million, very much lower than previous quarters / years. In fact the Finance Income is higher than Finance costs by 160K for Q3.

There is no need to keep much cash in the company, TAANN would get return of investment by receiving dividend from SWKPLNT.

You can download from this website.

I read the report by Public Bank analyst just now, it said SWKPLNT management target for 18% increment on FFB production for 2021. I guess the company would pay 5 cents dividend for every quarters.

You see,

I expect SWKPLNT to pay more dividend (see above my earlier comment), but I thought they would pay only after the Q4 result.

So big surprise that they want to pay now.

Look at their Balance Sheet, it is very healthy,

May be they want to pay again afetr Q4, who know?

Good result.
And surprisingly another 5 cents dividend, really Good!

Enterprise value per Planted Ha:
1) SUBUR: RM16,143,
2) RSAWIT: RM22,322,
3) SWKPLNT: RM21,206,

SUBUR's EV/Ha is the lowest.
If you are looking for cheap land, go for SUBUR, but it is still a loss making company,

Share Price = 0.855
Share Qty = 967,991,000

A)Market Cap = 827,632,305
B)Total liabilities = 1,048,623,000
C)Non-controlling interests = 1,306,000
D)Other investment = 38,500,000
E)Current assets = 155,033,000


Total Mill, mt/hr = 305 (Estimate form FFB processed)
F)Value of Mill (250K per mT/hr) = 76,284,247

Enterprise Value for Planted Estate = A+B+C-D-E-F = 1,607,744,058
Total Planted Ha = 69,589
Enterprise Value / Planted Ha = RM23,103

TAANN bought 30.5% equity in SWKPLNT at RM2.00 per share in early 2018 and and became the biggest single shareholder.

So I would like to compare before and after 1st Jan 2018.

For SWKPLNT:
For the whole year of 2017, FFB production was 237827 mT.
For the latest 12 months (Nov 2019 - Oct 2020), FFB production was 338502 mT.
An increase of 42.33%.

Now look at JTIASA,
For the whole year of 2017, FFB production was 1082137 mT.
For the latest 12 months (Nov 2019 - Oct 2020), FFB production was 980,292 mT.
A decrease of 9.41%.

Now, Compare the size of these two companies,
1) FFB production: 980292 / 338502 = 2.90
2) Enterprise Value (EV) : 1584m / 735m = 2.16
3) Market Cap: 803 / 603 = 1.33

I do not really trust any small company.
Heard people said that many companies have 3 sets of accounts,
One for the boss himself, one for the partners and another one for the government.

TAANN will not be that daring because the Sarawak government still hold very big shares in SWKPLNT, in fact the equity percentage is higher than TAANN's if include other government related units.

So I like SWKPLNT for:
1) FFB will increase further for 2021, at least double digit as committed by the company.
2) Already making more profit and paying dividend, definitely will earn even more and pay more dividend.

My guess on the 3rd Quarter EPS is 3.9 sen excluding any one off gain/loss.

Aiyo, tell you another example.

TAANN bought 30.5% equity in SWKPLNT at RM2.00 at quite big premium to market price in early Year 2018.

The estate and mill were badly managed then that the average monthly FFB production was way below 20K mT.

After TAANN joined in the management since then, the average monthly FFB production increase consistently until it is now at 28.2K mT.

I look at it this way.
If the deal is bad or just to help PNB,
Then why not KLK buy it?

Pick from the Sarawak Plantation Companies which pay Dividend:
1) SOP pay 5 cents
2) SWKPLNT pay 5 cents
3) TAANN also pay 5 cents

SWKPLNT is the best, highest Dividend Yield!

Read the following facts about SWKPLNT.

Total Planted Estate = 35,076 Ha
Share Qty = 279,032,200
Share Price = RM2.130 (Last Friday Closing)
Market Cap. = RM594,338,586
Total non-current liabilities = RM174,307,000
Total current liabilities = RM131,141,000
Non-controlling interests = RM10,470,000
Total current assets = RM153,188,000
Total Milling Capacity = 120 mT/hour
Total Milling Assets = RM30,000,000 (Assume 250,000 per mT/hour, it is close to the item "Property, plant and equipment = RM282,225,000" in the Balance Sheet. For comparison, CB INDUSTRIAL PRODUCT HOLDING BERHAD (CBIP) built a new 45 mT/hour Mill in Kalimantan at a cost of around RM1 million per mT/hour)

Enterprise Value (EV) for Planted Estate
= 594,338,586 + 174,307,000 + 131,141,000 + 10,470,000 - 153,188,000 - 30,000,000
= RM727,068,586

EV / Planted Estate = RM20,728 / Ha

For comparison, on 20th October 2020, FGV HOLDINGS BERHAD (FGV) issue an official statement and mention in it that "Replanting expenses for the 15,000 hectares were in the range of RM300 million per annum".
Wow, FGV's replanting cost alone already RM20,000 / Ha,
SWKPLNT's EV / Planted Estate is only RM20,728 / Ha.

Now, look from the point of FFB Production,
Latest 12 months FFB Production = 338.502 mT
EV / Annual FFB = RM2,148 / mT

Another comparison on Estate EV / Ha.
Kim Loong announced on 19th Feb 2020, that they were buying Planted Estate in Sandakan at a price of RM80,000 per Ha.
Wow, a price of almost 4 times of SWKPLNT's EV / Ha of RM20,728.

Total Planted Estate = 35,076 Ha
Share Qty = 279,032,200
Share Price = RM2.130
Market Cap. = RM594,338,586
Total non-current liabilities = RM174,307,000
Total current liabilities = RM131,141,000
Non-controlling interests = RM10,470,000
Total current assets = RM153,188,000
Total Milling Capacity = 120 mT/hour
Total Milling Assets = RM30,000,000 (Assume 250,000 per mT/hour, it is close to the item "Property, plant and equipment = RM282,225,000" in the Balance Sheet. For comparison, CB INDUSTRIAL PRODUCT HOLDING BERHAD (CBIP) built a new 45 mT/hour Mill in Kalimantan at a cost of around RM1 million per mT/hour)

Enterprise Value (EV) for Planted Estate
= 594,338,586 + 174,307,000 + 131,141,000 + 10,470,000 - 153,188,000 - 30,000,000
= RM727,068,586

EV / Planted Estate = RM20,728 / Ha

For comparison, on 20th October 2020, FGV HOLDINGS BERHAD (FGV) issue an official statement and mention in it that "Replanting expenses for the 15,000 hectares were in the range of RM300 million per annum".
Wow, FGV's replanting cost alone already RM20,000 / Ha,
SWKPLNT's EV / Planted Estate is only RM20,728 / Ha.

Now, look from the point of FFB Production,
Latest 12 months FFB Production = 338.502 mT
EV / Annual FFB = RM2,148 / mT

How to compare ICAP’s NAV, Price with KLCI.

On 20th Oct 2005 (from its website)
NAV = 0.99
Price = 1.03
KLCI = 911.69

On 28th October 2020
NAV = 2.79
Price = 1.91
KLCI = 1495.20

ICAP dividend:
Amount = 0.095, subject to 25% tax
Payment Date: 7th Oct 2013
ICAP Price on 11th Oct 2013 = 2.33 (from its website)

Assume reinvesting the dividend for extra units,
Also assume the investor income tax rate is zero, meaning the 25% tax will be returned
Total holding will increase by 0.095/2.33 = 4.08%,

From 20th Oct 2005 to 28th Oct 2020, that is 15.02 years.

Now we calculate the Compound Annual Growth Rate:
For NAV = (2.79*1.0408/0.99)^(1/15.02)-1= 7.43%
For Price = (1.91*1.0408/1.03)^(1/15.02)-1= 4.47%
For KLCI = (1495.20/911.69)^(1/15.02)-1= 3.35%

However, if we invest into KLCI’s 30 index counters, we receive dividend.

I have closed some of my FKLI short positions so that the curve become symmetrical. The correct matching ratio now is one FKLI to 102,000 units C9P.

Forget to mention, my current matching ratio is one FKLI (Short) to 75,000 units C9P.

I forgot to say something about HARTA-C54.
When I first picked it up on 28th Sep,
HARTA was 17.42, Volatility was 76.19% and HARTA-C54 was 0.08,

Now,
HARTA is 19.04, already up 9.3%,
HARTA-C54 is 0.175, already up 119%,
Volatility is 69.23%, drop about 7%,

As:
1) The remaining life is shorter,
2) Volatility also drop significantly,

Therefore fair value also drop significantly,
Then some more HARTA-C54 market price also has shot up a lot,

So please take note that the fair value is now lower than market price.