Posted by ksszetho > 2013-07-20 15:04 | Report Abuse

If offer price of RM1.21bn at RM140/sh on 8.65m shares implies a historical PE of 30.7, then historical EPS was RM4.56/sh. Hence, PU's historical NP was RM39.446m p.a. This compares with potential interest income of RM38.72m p.a. at 3.2% p.a. if the RM1.21bn is placed in fixed deposits. Ceteris paribus, at RM39.446m NP p.a., the payback period for this investment is about 30 years. A damn good deal for the owners of Pontian United, especially when the estate and mill are pretty old (more than 15 years, I hazard a guess). Some 95% of the plantings must be in the prime or past-prime category, and quite similar to most of FGV's plantations, massive replanting is necessary in due course. With part of PU's property prone to flooding during monsoon, and the nagging problem of harvesters shortage, the assumption that PU's FFB yield/ha could be close to 28mt/ha is wishful thinking indeed.