Not yet high..soon over 70s

Meico also up.. same boss

Low supply of raw materials may push prices up by over 10%

PETALING JAYA: Mieco Chipboard Bhd, one of the largest particle board manufacturers in Malaysia, stands to benefit from the increasing demand and higher prices of particle boards in the coming months.
According to industry observers and analysts, particle board prices will likely increase by over 10%, following floods in Thailand which are curbing the supply of raw materials.
Demand for particle boards is also seen increasing with many local furniture players enjoying better sales on the back of the stronger US dollar since last year.
Since more than 80% of Mieco’s production is sold to the local market, the company is not one of the beneficiaries of better export margins like the other furniture and board manufacturers.
Particle board or chipboard is made by using wood particles and rubber wood together. It is cheaper than conventional timber and is said to be denser and cheaper than plywood.
“Board prices are likely to increase in the coming months, especially with prolonged rainfall that has increased the prices of raw materials, as well as increasing demand for wood-based furniture products,” said a market observer.
Other particle board manufacturers include Heveaboard Bhd and SYF Resources Bhd.
Last year, Mieco was a takeover target of SYF Resources’ major shareholder and chairman Datuk Seri Ng Ah Chai.
Since the takeover attempt, shares in Mieco have risen by as much as 93% to their all-time high of RM1.73 compared to 90 sen a year ago.
At first, Ng entered into a conditional share sale agreement with BRDB Developments Sdn Bhd in June 2016, for the acquisition of 119.19 million shares representing approximately 56.76% of Mieco for a total purchase consideration of RM107.27mil or equivalent to 90 sen per Mieco share.
He later extended the offer to the other shareholders after triggering an unconditional mandatory takeover offer to acquire all the remaining Mieco shares. However, the other shareholders of Mieco did not accept the offer at 90 sen a share.
The offer closed in November with Ng owning a 56.7% stake in Mieco. Following the purchase, Ng, 54, was appointed as the managing director of Mieco in November.
Ng has a substantial stake in furniture and particle board manufacturer SYF Resources with a 51.4% stake, and has been the chief executive officer of the company since 2005.
“Investors could be excited about new blood coming into Mieco that may synergise both SYF Resources and Mieco’s operations in the future,” a market observer said.
On the flip side, an analyst said that the consolidation of SYF Resources and Mieco would take years to develop.
“Right now, the sales of particle board are picking up. Consolidation can only be in the picture in the later part of the year,” the analyst said.
When contacted, SYF Resources director Datuk Seri Chee Hong Leong said the company would make the necessary annoucements should there be any new direction between Mieco and SYF Resources.
“It is too early to comment on the matter,” he told StarBiz. He noted that SYF Recources was currently in the midst of expanding its particle boards manufacturing capacity to ride on the growing export market.
UOB Kay Hian senior analyst Lester Chin was previously quoted as saying that the acquisition of a controlling 56.7% stake in Mieco by Ng may result in the largest particle board-manufacturing entity in Malaysia, if the consolidation takes off.
Right now, Mieco’s annual production capacity of particle board is 900,000 cu m, making it the largest manufacturer of the product in Malaysia.
In terms of sales, Mieco’s revenue has been growing steadily at a compounded annual growth rate of 2.14%.
Its profit margins were hovering at about 5.2% in 2014 and 2015. In 2013, the company reported a net loss of RM30.30mil due to impairments, the shutdown of plants and lower selling prices of its products due to a supply glut.
Going into 2017, analysts reckon that local particle board manufacturers can experience a stable price on stronger demand from China.
“The export market for particle board is growing, especially with the closing down of factories in China due to a shortage of raw material from the strict logging imposed by the country since 2015,” said an analyst.
Since 2015, he said the particle board selling price has risen by more than 25%.
For the first nine months ended Sept 30, 2016, Mieco posted a higher net profit of RM36.23mil due to a one-off gain from the disposal of assets. Revenue for the period was at RM231.7mil.
Direct competition for Mieco’s products come from Heveaboard, which has a lower particle board capacity than Mieco.
However, Heveaboard has another production line for ready-to-assemble products that contributes half of its sales.
The company has higher revenue and profits compared to Mieco, due to its export market exposure and ready-to-assemble product line.
At the current share price of RM1.47, Heveaboard is trading at a historical price-earnings

up trend ....

Yes. Next target 70s

Next syf..

This article first appeared in The Edge Financial Daily, on January 23, 2017.


KUALA LUMPUR: SYF Resources Bhd, which saw the property development segment contribute more than half of the group’s revenue in the first financial quarter ended Oct 31, 2016 (1QFY17), expects the manufacturing of medium-density fibreboard (MDF) and rubberwood furniture to remain as its core business.

“SYF [Resources] was never a property counter to start with. We are always in manufacturing and sales of consumer products. But back in 2011 when we were undertaking a restructuring exercise, we thought the company needed to add another income stream to cater for future growth,” its executive director Datuk Seri Chee Hong Leong told The Edge Financial Daily in an interview.

SYF Resources’ net profit grew 8.1% to RM11.7 million in 1QFY17, from RM10.83 million a year ago, while revenue rose 56.7% to RM148.71 million from RM94.92 million in 1QFY16.

Out of the group’s revenue, the property development segment accounted for 51.4% (RM76.46 million) while the manufacturing of rubberwood furniture and MDF contributed the remaining 48.6% (RM72.23 million).

Chee said as earnings and revenue from the manufacturing business take time to come in, the property development segment will help support the group.

“When we first started [in the property development business], everybody thought we didn’t know what we were doing. But along the way, [our] property [division] has become a big revenue contributor,” he explained.

Chee believes that the property development business will provide a secure income for the group over the next five to seven years.

“While the property market has slowed down, our properties are located in niche areas in Selangor. We are unlike some property developers that have projects everywhere [which expose them to greater risks],” he said, adding that the group’s ongoing projects, Kiara Plaza in Semenyih and Lavender Residence Block A in Sungai Long, have achieved satisfactory sales.

“These two locations, where there are universities and big [property] players coming in, will further enhance the value there.

“Additionally, we are selling affordable homes, not to mention potential access to the mass rapid transit system,” he added.

This year, SYF Resources is targeting two new launches in Sungai Long with a combined gross development value of RM500 million.

Chee also said the tight lending guidelines by Bank Negara Malaysia have affected the group’s property sales.

“The sales will be there, but it [will] take a longer time to convert due to the end-financing issue. However, we are not the only property developer affected by this,” he said.

Meanwhile, Chee expects revenue from the MDF manufacturing segment to grow by 20% to 30% in the current financial year ending July 31, 2017 (FY17), as its new manufacturing plant in Simpang Pertang, Negeri Sembilan, will be fully commissioned by the end of FY17.

“Our existing plant in Gemas (Negeri Sembilan) is already running at full capacity. Apart from Simpang Pertang, we are also setting up another plant in Rompin, which will be fully commissioned in FY18. In fact, we are finalising [machinery] installation in the next few months,” he said.

“The demand [for MDF] is there. It is just how to ramp up our capacity,” he added.

Earlier this month, SYF Resources announced that it is buying an 8.68ha piece of land in Gerik, Perak, for RM15.5 million from Leweko Resources Bhd. The group told Bursa Malaysia that the land will provide additional space for future expansion of its timber processing and MDF board manufacturing business.

Chee is unfazed by the shortage of foreign workers in the manufacturing industry. On its part, SYF Resources has reduced its dependency on foreign labour by focusing more on the manufacturing of MDF, which is less labour-intensive.

The group has also started hiring more locals to ease its dependency on foreign labour. Currently, more than 70% of its workers are foreigners.

SYF Resources executive chairman and chief executive officer Datuk Seri Ng Ah Chai said labour cost constitutes 5% to 6% of its MDF manufacturing segment’s total operating costs, while that of the manufacturing rubberwood furniture segment is about 12% to 13%.

Ng, who is the group’s largest shareholder, with a 51.49% stake as at Oct 31 last year, explained that an industry is deemed labour-intensive if its labour cost accounts for more than 13% of its total production costs.

Earlier this month, the government decided to postpone a move to make employers pay the levy for foreign workers instead of deducting it from the wages of their employees until 2018, following strong protests from manufacturers and employer groups.

“We need time to adjust to new policies that the government is going to implement so that we can plan our sales, costing and expansion. We need certainty in labour supply,” said Chee.

Meanwhile, Ng, who also owns a 56.8% stake in Mieco Chipboard Bhd, said it is t

Dear Mr. Tan,

My stock picks for 2017 are:
1. IFCAMSC 20%
2. JCY 20%
3. DUTALND 20%
4. WTK 20%
5 TDM 20%
TQ

target 2.18

why push down

1.16 to 2.18...10%

2.18,,,,

令吉弱势利好　木材业中短期有支撑

由于令吉兑外幣匯率可能会因英国脱欧公投结果而持续走弱，分析员认为，这將在中短期內对大马木材业者產生正面影响，支撑相关公司的业务。

目前，令吉兑美元匯率站稳在4令吉兑1美元水平，分析员指出，两家拥有木材业务的大马上市公司--常成控股（JTIASA，4383，主板工业股）与大安控股（TAANN，5012，主板工业股）相信可从中获利。

与此同时，分析员认为，上述两家公司相比其他种植股来说，它们的估值处在被低估水平。有鉴于此，大马投行分析员保持大马木材领域「跑贏大市」投资评级。

无论如何，原木价格自2016年初至今呈下滑趋势，目前树桐的出口价格保持在每立方米220美元的水平，而夹板的价格则依然疲软，处在每立方米低于480美元的水平。


不分拆伐木权利好

儘管如此，对大本营位于砂拉越的大马木材业者来说，另一项有利因素是砂拉越首长丹斯里阿德南早前表示，无意將6大木材业集团获得的伐木许可拆分给更多小型公司，因该州政府更希望与大型木材业者一起合作，去实践可持续木材业政策。

上述6大木材业集团为三林集团、拥有常成控股的常青集团、昇阳集团、黄传宽控股（WTK，4243，主板工业股）所属的黄传宽集团、手握大安控股的大安集团以及启德行集团。因此，这些大型木材公司在可预见的未来，都拥有足够的伐木林地，以维持它们的木材业务。

值得注意的是，常成控股与大安控股同时也经营油棕种植业，而且两家公司的种植部门是影响公司价值的关键因素。对两家公司来说，原棕油价格是重要催化因素。分析员称，棕油价格能否持稳在每公吨2300令吉或2400令吉以上水平，是决定该两家公司业绩前景的重要因素。

种植业务　常成大安盈利关键

进入2016年以来，常成控股每月的鲜果串（FFB）產量按年皆比2015年数据高，首5个月的平均產量比去年高出约37%，显示该公司的鲜果串產量已经从谷底反弹。

常成鲜果串產量復甦

根据常成控股在大马交易所呈报的每月產量最新数据，该公司的鲜果串產量几乎已经达到分析员的2016年全年预测，即90万公吨，或每公顷成熟种植地14.7公吨。

据该公告，常成控股在5月的鲜果串產量为8万4376公吨，到5月为止的11个月鲜果串总產量则为82万8670吨，相当于分析员全年目標90万公吨的92%。该公司只要在6月產出7万至8万公吨的鲜果串，即可达到分析员的目標。

常成控股是在每年的6月30日结账。

此外，考虑到常成控股旗下油棕园仍未进入產量高峰期，可以预见该公司的鲜果串產量在接下来数个月將会有更出色的表现。

根据往年记录，该公司的產量高峰期落在每年8月至9月，或是该公司2017財政年的第1季。

基于常成控鲜果串產量復甦的速度，分析员认为，长期来说，该公司鲜果串年產量可持稳在150万公吨的水平。

该公司的油棕树平均树龄约8年，2017与2018財政年每公顷成熟油棕树鲜果串產量预测，分別为16.6公吨与17.8公吨。

无论如何，常成控股棕油业务部门较高的贷款，以进行油棕树种植活动，导致利息支出高于预期，拖累了该公司2016財政年首9个月的盈利表现。

根据该公司2016財政年第3季业绩报告，棕油业务部门虽然营业额上涨，但税前亏损却从去年同期的1075万令吉，扩大至3456万令吉，暴增2381万令吉或221.54%。

对此，分析员称，该公司的木材业务表现比预期佳，但是种植业务却因为较高的利息开销，导致表现落后预期。同时，在这段期间，常成控股的棕油榨取率（OER）为17%，比分析员预测的18%低。

无论如何，大马投行分析员称，由于该公司的鲜果串產量预计会逐步增高，在榨取率维持不变的情况下，该公司的整体营运成本將会下降。

木材业需求放缓

儘管常成控股在2016財政年第3季由盈转亏，蒙受773万令吉亏损，但原木业务却在营业额下跌的情况下，出乎意料取得盈利，即税前盈利达9250万令吉，去年同期税前盈利则为7385万令吉，按年上升1865万令吉或25.25%。

该公司称，第3季的营业额下降是因为原木產量降低，进而使原木销售额减少所致，而该因素也同时令木料处理部门缺乏生產夹板的原料，夹板销售额隨之滑落。该公司木料处理部门在第3季蒙受800万令吉的税前亏损，不过该部门却在2016年首9个月获得1900万令吉的税前盈利。

对常成控股来说，木材价格，无论是原木或夹板价格的下滑都是不可忽视的潜在风险。

虽然该公司称，对木材產品的需求量將会因全球经济不確定而放缓，不过鉴于原木產量有限，加上令吉疲弱趋势，木料价格应该会保持稳定。

综上所述，分析员维持常成控股「买入」投资评级，目標价为2.18令吉。该股上週五（8日）下跌1仙或0.85%，至1.16令吉，成交量为65万零500股。

The research house explained its Buy for Jaya Tiasa was an unchanged fair value of RM2.18 a share based on an FY16F PE of 25 times. At 25 times, this was three notches below its10-year forward price-to-earnings (P/E) of 28 times.

klci index still 1600 up but jtiasa 1.80 drop to 1.08 80% drop..

1.35

1.23,,, go go

director keep buying

cheap but no bullet buy

RM WEAK

GO RM5

SOP the best in Sarawak. Always Profit

Big oil Palm plantation but poor management

forest concessions
Extraction Quota: 78,000m3 monthly
Main Species: Meranti, Kapor, Keruing, Selangan Batu, Jelutong, Melapi, Mersawa,
Nyatoh, Arau, Penyau, Bindang and MLH (mixed light hardwood).

oil Palm Plantation
Total Land Area: 83,480 hectares
Planted Area*: 69,054 hectares
Matured Area*: 59,202 hectares

Reforestation
Total Land Area: 235,859 hectares
Estimated Plantable Area: 140,377 hectares
Planted Area*: 32,108 hectares

boss sarawak still holiday.. GAWAI

usd 4.15

usd 4.16....ta ann soon back to RM5

Usd RM 4.16 soon export share active again

collect

1.17 too cheap...

timber still in profit, loss in palm oil section

1.30 jeng jeng....

when back to 1.80

Fong Siling got 4.4million share

buy call.. haha

Business
Ta Ann to see better numbers ahead
May 21, 2016, SaturdayShare this:TweetEmail
.KUCHING: Ta Ann Holdings Bhd (Ta Ann) reported a slow start to the financial year 2016 but analysts see promising prospects in the group, backed by its palm oil segment and possible recovery in its timber division.

Of note, Ta Ann recorded a net profit of circa RM14 million, which generally came below market an analysts’ expectations.

Nevertheless, analysts favour the company’s plantation earnings prospects as well as potentials in the timber division.

In a report, the research arm of AmInvestment Bank Bhd (AmInvestment Bank) said the group earnings were impacted by lower log and plywood volume and prices and traditionally, 1Q produces lower log and plywood volumes.

For Ta Ann’s plantations segment, it noted that 1Q is traditionally is also traditionally the weakest quarter for fresh fruit bunches (FFB) production and it is entering the peak crop season in 3Q16.

Nevertheless, it said, “We maintain our earnings forecasts for now, as it could still make up for the shortfalls to expectations, in view of the higher FFB production and crude palm oil (CPO) prices as well as higher log harvest in the months ahead.”

It added that it maintained its FFB production growth at 14 per cent and CPO price assumption at RM2,300 per tonne for FY16 forecast.

Meanwhile, the research arm of Affin Hwang Investment Bank Bhd (Affin Hwang Capital) pointed out that Ta Ann’s log prices have started to decline since late 2015 to about US$221 to US$236 per m3 from a high of US$289 per m3 in 3Q15.

“The high log prices and depreciation of the Indian rupee against the US dollar had pushed away Indian buyers, the largest log customers, to source for lower-cost logs in Papua New Guinea and the Solomon Islands.

“However, we believe that the decline in log prices would attract Indian buyers to Sarawak again,” it opined.

The research arm of Public Investment Bank Bhd (PublicInvest Research) also noted that plywood prices are likely to recover in 2Q given the low plywood inventory, stronger yen and better-than-expected to gross domestic product (GDP) data from Japan, which would give a boost for plywood orders.

“On the sales volume, log exports are expected to remain in the range of 160,000 to 170,000 cubic metres this year while plywood would also stand around 190,000 cubic metres,” it added.

On Ta Ann’s plantations sector, it noted that Ta Ann has allocated a lower capex of RM50 million for FY16 as majority of its plantation land are fully planted (only less than 1,000 hectares left for new planting).

Meanwhile, Kenanga Research said it anticipated stronger performance in Ta Ann’s plantation segment in 2Q16 as CPO prices have remained stable above RM2,500 metric tonne since mid-March, while FFB production should continue rising in line with cropping patterns.

Overall, it maintained a ‘market perform’ call on the stock and said it believed stabilising timber demand and better plantation outlook is offset by lower than expected timber volume.

PublicInvest Research maintained an ‘outperform’ rating on the stock. It said, “We think that the recent sharp fall in the share price performance has fully priced in the poor results for this year.

“Further downside risk is unlikely and will be capped by the current attractive dividend yield of 5.1 per cent. At current market cap, the timber concession business, which contributes at least 50 per cent earnings to the group, is significantly overlooked.”

Affin Hwang Capital maintained its ‘buy’ call and said it continue to like Ta Ann for the rising plantation earnings given the increasing matured plantation areas, FFB and CPO production, and its 5.1 per cent 2016 estimate dividend yield.

Aside from that, AmInvestment Bank upgraded its call of the stock to ‘buy;, given the oversold position, with a good dividend yield of 4.7 per cent, in addition to the capital gains upside.


Read more: http://www.theborneopost.com/2016/05/21/ta-ann-to-see-better-numbers-ahead/#ixzz49LAMh2qD

Business
Ta Ann records a four pct increase in revenue
May 20, 2016, Friday Conny Banji, reporters@theborneopost.com
Share this:TweetEmail
.SIBU: Ta Ann Holdings Berhad (Ta Ann) recorded a four per cent increase in its revenue for the financial year ended Dec 31, 2015 at RM1.0483 billion from the previous year.

Ta Ann executive chairman Datuk Amar Abdul Hamed Sepawi said the company’s profit before tax was at RM234.2 million, up 39 per cent from the level achieved in 2014.

“Net profit after tax of RM191.5 million was 53 per cent higher year on year, translating to earnings per share of 51 sen.

“Total equity grew from RM1.090 billion at the end of 2014 to RM1.218 billion in 2015 while return on equity for the year under review was 16 per cent,” he said in his message in Ta Ann 2015 Annual Report book that was distributed before the company’s 19th annual and extraordinary general meeting at a hotel here yesterday.

For the same financial year, Ta Ann’s Board of Directors declared and paid dividends of 20 sen per share, he said.

Meanwhile, Abdul Hamed hoped that the Trans-Pacific Partnership Agreement (TPPA) will create new market opportunities for the timber industry especially in the North American market which could boost the industry’s export volumes.

“For this year, the timber division will see some volatility in prices as adjustments were made in the supply chain to cater to the expected slowdown in demand,” he said.

He had earlier said that the global economic outlook will be challenging this year with slower growth rates in most emerging economies and subdued demand for commodities across the board.

“Prospect for crude palm oil prices should be bright in the coming year and we remain on track to achieve a 15 to 20 per cent growth in fresh fruit bunches production volume this year driven by larger matured area and improved palm age profile,” he said.

On a similar matter, he said that Ta Ann was working towards sustainable forest management certification under the Malaysian Timber Certification Scheme (MTCS).

He said it was the process of carrying out third party assessments for sustainable forest management practices of Forest Management Unit or Forest Plantation Management Unit in accordance with the requirements of a prescribed standard leading to an award of a certificate for Forest Management under MTCS.

He also noted that the company’s Manis CPO Mill and Daro oil palm estate had attained Malaysian Sustainable Palm Oil certification.

“In tandem with our commitment, we expect more oil palm subsidiaries to be certified this year,” he said.


Read more: http://www.theborneopost.com/2016/05/20/ta-ann-records-a-four-pct-increase-in-revenue/#ixzz49BkCKHug

cut....haha

jtiasa i think better

maybank target RM5
Adjusting earnings forecasts. Maintain BUY
As logs export price outlook remains weak on lackluster demand and 1Q16 production cost was high, we reduce our 2016 timber ASP estimate and increase our timber and plantation production cost estimates. Subsequently, we cut our 2016/17/18 EPS estimates by 27%/12%/12% after. Our new TP is MYR5.00 (-28%) based on unchanged 15x 2016 PER, pegged at 4-yr historical mean.

RM 4.07=1 usd..good for export counter like Ta ann, soon profit will back to normal

3.89 drop 10sen=3.79...cut cut

haha

@voon1900 if it din drop at least 10sen i CUT!
now 3.93~3.94

5 sen + bonus issue...

can collect for long term

Bonus Issue

TA ANN HOLDINGS BERHAD

EX-date 07 Jun 2016
Entitlement date 09 Jun 2016
Entitlement time 05:00 PM
Entitlement subject Bonus Issue
Entitlement description Bonus issue of up to 74,147,296 new ordinary shares of RM1.00 each ("Share(s)") ("Bonus Share(s)") to be credited as fully paid-up on the basis of one (1) Bonus Share for every five (5) existing Shares held in Ta Ann Holdings Berhad at 5:00 P.M. on 9 June 2016
Period of interest payment to
Financial Year End 31 Dec 2016
Share transfer book & register of members will be to closed from (both dates inclusive) for the purpose of determining the entitlement
Registrar or Service Provider name, address, telephone no SYMPHONY SHARE REGISTRARS SDN BHD
Level 6, Symphony House
Pusat Dagangan Dana 1
Jalan PJU 1A/46
47301Petaling Jaya
Tel:0378490777
Fax:0378418151
Payment date
a.Securities transferred into the Depositor's Securities Account before 4:00 pm in respect of transfers 09 Jun 2016
b.Securities deposited into the Depositor's Securities Account before 12:30 pm in respect of securities exempted from mandatory deposit
c. Securities bought on the Exchange on a cum entitlement basis according to the Rules of the Exchange.
Number of new shares/securities issued (units) (If applicable)
Entitlement indicator Ratio
Ratio 1 : 5
Rights Issue/Offer Price
Par Value Malaysian Ringgit (MYR) 1.000

ta ann kwsp sell

rebound soon

4.12