Posted by Icon8888 > 2014-02-04 06:39 | Report Abuse

Kyy I wouldn't worry too much about all these petty accounting issues. RM46m is nothing compared to the value of 68000 ha of planted oil palm estates. I think your theory for jtiasa undervaluation is sound

Posted by Icon8888 > 2014-02-04 06:45 | Report Abuse

Kyy why would anyone want to buy Ta Ann instead of jtiasa ? Ta Ann is 40% planted. Jtiasa is almost fully planted. If you look ahead at Ta Ann future, you will see debts growing ( fund the planting). But if you look ahead jtiasa, you see debt dropping ( as an overall trend). Don't listen to all these accountants. They made terrible investors, as they focus too much on minute details. Engineers on the other hand, are very good in investing ( I met many of them). So stick to your engineer instinct. Jtiasa better than Ta ann

Posted by Icon8888 > 2014-02-04 06:57 | Report Abuse

Kyy I was skeptical when you first recommended jtiasa, as debt is high. However, later on I found out that it has completed planting. That caused me to make a u turn and I become a supporter.

Not sure how far this stock can go within three years, but think its downside limited if we take a three year view (with the trees producing fruits like crazy)

Posted by optimus7 > 2014-02-04 07:27 | Report Abuse

all these accounting issues and forward looking expectation is NOT relevant going forward. what is relevant is 1)the ringgit vs usd. 2)palm oil prices. and most important. 3)interest rate
the rest are micro issue.

Posted by Icon8888 > 2014-02-04 08:24 | Report Abuse

Management also important. I heard rsawit estates very badly managed until FFB yield is only less than 50% industry average (I have not verified)

Posted by Chinlin Sia > 2014-02-04 09:08 | Report Abuse

100% for future prediction is impossible...that still lot of random event may happen ahead.. Some stock perform bad but the price can perform the reverse.. Stock market is the great humiliator try to humiliate lot of expert.. If not follow biz sense to invest, much probably jZ a short term investor.. Ken fisher from fisher investment had show a data proven record in his book interest rate increase or decrease is not relavent to market raise or fall.. Because over the long term market is on the raise.. Palm oil price as previous record until today is only raising trend in long term.. This is Malaysia achievement on R&D work from less than 5mt/hec to current average 25mt/hec...macro prospect of palm oil is should not be doubt.. Because history data had proven palm oil dominate world oil consume from less than 5% to 33%.. If looking for something that is totally free from risk, stock market is not the place for people looking for safety to survive...

Posted by Chinlin Sia > 2014-02-04 09:44 | Report Abuse

Jaya tiasa might not be the best perform stock in 2014... How abt 2015,2016?But as Mr koon had share in article, this is his tot to show all of us the most undervalue stock he found from his personal view.. Not urge anyone to buy, like genting eill not put gun on someone head to get into casino.. So many 10 years record show in plantation company annual report...even 1500 CPO price also happen before.. That's nothing wrong to pick plantation biz for invest long term, How many people had accounting base to figure like up_down... I personally don't had tertiary education, but I still finding some method to survive in stock market,.. Is very common sense to think to pick the one is no increase in biological asset or pick that one increase most in biological asset? Because imply increase most in new plant. Mr Koon strategy on investment is unique for me, he dare to buy all money his got into one company n into stock market.. Majority of people only dare to invest portion of money or maybe up to 10 counter.. But Mr koon dare to all in without worry.. Some one ridicule him but nvr try to examine whether they dare to buy all their money in one share they most confident..

Posted by wt222 > 2014-02-04 09:53 | Report Abuse

At least Jtiasa is much much much better than Xinquan....though I dun see it as the most undervalued stock in Bursa at the moment....until and unless CPO's price moves beyond RM3,000pmt...

Posted by wt222 > 2014-02-04 09:54 | Report Abuse

Personally, I dare not use margin to buy and hold a stock for too long...definitely not for 2-3 years...especially during this moment....maybe that's the reason I am not supertrader.....

Posted by wt222 > 2014-02-04 10:10 | Report Abuse

Besides, maybe Mr.Koon would happily sold off all his Jtiasa at 10-20% higher than the current price (Rm2.25)...seeing his record in Rsawit (recommended at RM0.83 in Nov 2011 and sold off at RM1.00 two or three months after that)..despite the bullish analysis he made earlier on...

Posted by lohman > 2014-02-04 10:18 | Report Abuse

It's not foolhardy to stake it all in JT or some other 'killer' stock if you're absolutely convinced of its coming potential. Unfortunately, I have neither the requisite palm oil industry knowledge, nor the intimate company knowledge, to take such a calculated stand. Still learning about the industry and studying the few Sarawak listed companies diversifying from timber to oil palm.

Posted by Icon8888 > 2014-02-04 10:22 | Report Abuse

chinlin sia why are you so defensive of KYY ? There is no need to carry somebody's balls just because he is rich and powerful. Let us be objective when come to stock analysis.

Posted by wt222 > 2014-02-04 10:26 | Report Abuse

http://klse.i3investor.com/blogs/kianweiaritcles/45708.jsp

Posted by Icon8888 > 2014-02-04 10:31 | Report Abuse

you seemed to have a soft spot for rich people. Whatever they do you said is correct. I personally don't think it is a good practice to put all money in one stock. The way you flatter KYY made me want to puke

Posted by wt222 > 2014-02-04 10:31 | Report Abuse

Personally, if Mr.Koon is going to trade Jtiasa as how he traded Rsawit...then after a while it will be like Ah Jib's son N Raymond...U cant just use the same trick again n again...

Posted by wt222 > 2014-02-04 10:33 | Report Abuse

I think your sincere followers will get upset over u if you do this again....

Posted by Chinlin Sia > 2014-02-04 11:38 | Report Abuse

Whatever u can comment on me... No matter anyone who dedicated to share their view I'm very appreciate because I learn from this way...I personally loss huge on cold eye recommendation share in the past.. I nvr blame instead I thanks him to let me understand no guru 100% is right... Klse 8k can be fail in the past too but I still read their article n even print out to study repeat.. Some new respectable blogger like chengyk, 丐帮.. I also will stand their point n learn with them together.. Article that wt222 share I did not agree, because lot of ppl include u might recommend stock to other ppl.. Give fish is let u learn to fish too... Cold eye gave me bad fish last time n make me learn it to choose which fish is good...

Posted by wt222 > 2014-02-04 11:51 | Report Abuse

It's good to learn from many guru... One thing I couldn't agree with Mr.Koon is seeing his trading pattern on Rsawit...Besides, his hardsell type of promoting Jtiasa (which is nothing to shout about at this moment, in terms of valuation) also raise some doubts to me..Sincerely, I just hope that he wouldn't dump Jtiasa as he did to Rsawit while giving a wrong picture to his followers on Jtiasa...

Posted by Ricky Kiat > 2014-02-04 11:54 | Report Abuse

People , time will prove it, between 3 year , we all will know who are super investor & who are stupid investor. Don't make any argument here anymore bcos a lot people want to learn from Mr Koon . Don't waste your time if u dont agree Mr Koon investment way & Please do your own way . We wish u all the best & earn the big money in stock market in future.

Posted by wt222 > 2014-02-04 12:16 | Report Abuse

Dun worry,Ricky if you follow him to buy Jtiasa and then lose money, he may pay u back

Posted by Up_down > 2014-02-04 14:53 | Report Abuse

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

Posted by newyorkng > 2014-02-04 15:05 | Report Abuse

Jtiasa's FFB is resonable but the oil extraction rate is ridiculously low - ie 60606 MT of FFB to produce 4938 of CPO in Dec 2013 at an extraction rate of 8% compared to industry's rate of 20%. It is quite puzzling. R they sending FFB to other mills??

Posted by Up_down > 2014-02-04 15:25 | Report Abuse

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)

Posted by Up_down > 2014-02-04 15:42 | Report Abuse

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.

Posted by newyorkng > 2014-02-04 15:53 | Report Abuse

Palm oil plantation operating margins are fairly predictable. For Jtiasa, at their current level of FFB production they should be able to make substantial profit if they can achieve a reasonable oil ext rate in future.

Posted by Up_down > 2014-02-04 16:36 | Report Abuse

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 .

Posted by aunloke > 2014-02-04 17:41 | Report Abuse

My take on Jtiasa : since it's going to be long term investment and the market is with a huge dark cloud ahead why not wait after the storm before we jump in.

Posted by Ricky Kiat > 2014-02-04 17:51 | Report Abuse

wt222, if i earn big money , i will treat u 'yam cha' .

Posted by cytew > 2014-02-04 21:16 | Report Abuse

Be grateful to Mr. Koon, he just share his experiences with us free of charge,not like others, they will conduct courses or seminars, if you want to learn from them,pay a fee and attend their courses or seminars.If you do not like Mr Koon's sharing , just stay away, ok ?

Posted by kk123 > 2014-02-04 21:48 | Report Abuse

U either be grateful of KYY or be careful of this guy
I think he has his own agenda ...
So if he bought at 2.08 , and u buy at 2.30 .. Be prepared to be chop off when he start selling
I mean u can't trust a person who one day say the share is most under value in the planet and next day it's not so undervalue anymore and start selling like its a worthless company

Posted by JT Yeo > 2014-02-04 22:26 | Report Abuse

The verdict is so simple here: There is no right and wrong answer here
KYY is entitle to express his opinion here and list out his reasons, but it is YOU, that should do your homework if it is undervalued instead of buying blindly. Regards to R Sawit, some ppl here felt betrayed after KYY promote the stocks and dispose it after it risen for 50%. First, it makes perfect sense if after rising 50% and KYY felt that Rsawit is fairly or overvalued, he has every right to sell it. Second, If you did your homework & bought R Sawit based on INTELLIGENT HYPOTHESES, CORRECT FACTS & SOUND REASONING, you don't even have to worry if KYY dispose all of his shares the very next day, because if you bought it at undervalued price, eventually reversion to mean, the price will ultimately traded back close to it's intrinsic value. Therefore the whole argument is irrelevant.

Posted by lohman > 2014-02-05 09:27 | Report Abuse

For those who lost money buying a recommended stock, you may do as many have done : dr net worth, cr experience. After a few episodes, if you don't learn money management techniques, you may end up with little money and lots of painful experiences. No one owes anyone anything in stock investment, caveat emptor always; buy and sell at your own risk, at your self imposed constraints.

Posted by Icon8888 > 2014-02-05 09:45 | Report Abuse

While the skeptics are debating, jtiasa is quietly creeping up. Lance chance to board the ship before it is too late....

Posted by iafx > 2014-02-05 09:52 | Report Abuse

wait for shark to push it up ;)

Posted by lohman > 2014-02-05 10:06 | Report Abuse

Thanks, Icon, for the alert but I'm waiting for impending 2Q2014 financial results. With trading volumes less than 1 mil daily, JT cannot make a breakout. Perhaps KYY is mopping up loose shares again.

Posted by wt222 > 2014-02-05 10:06 | Report Abuse

U mean,the old shark??

Posted by wt222 > 2014-02-05 10:08 | Report Abuse

Whoever bought jtiasa,u.r sitting.in the.same boat with mr.koon,fighting with.the tiong family...good luck

Posted by iafx > 2014-02-05 10:11 | Report Abuse

talk so much already for "awareness", when is the action time? sharky sharky... come come

Posted by wt222 > 2014-02-05 10:11 | Report Abuse

Since the fate of jtiasa lies with.the cpo.price movement very much....alternately,mayb mr.koon could place some of his bet on cpo futures...more direct n clear cut...at least not at the mercy of the tiong families

Posted by Up_down > 2014-02-05 20:20 | Report Abuse

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.

Posted by Icon8888 > 2014-02-05 20:24 | Report Abuse

Up Down, could it be because JT has bigger planted area (and as a result, more immatured palms) than TA, hence need to incur higher operating cost (fertiliser , etc) ?

Posted by Up_down > 2014-02-05 20:40 | Report Abuse

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.

Posted by Icon8888 > 2014-02-05 21:25 | Report Abuse

let me do a back of envelope calculation (I have just done one for Innoprise, so just cut and paste here)

Scenario 1 : CPO price of RM2,500 per MT. Based on 62,000 ha planted and assumed FFB yield of 25 MT per ha (when trees fully matured), FFB production of 1,550,000 MT per annum. Based on OER of 21%, CPO of 325,500 MT per annum. Based on CPO price of RM2,500 per MT, revenue of RM814m. Based on operating cost of RM1,500 per MT CPO, operating cost is RM488m. Based on RM800m debts and 5% interest rate, interest expenses of RM40m per annum. PBT = RM814m less RM488m less RM40m = RM286m. Based on 25% tax, net profit for palm oil = RM214m. Assumed timber makes RM20m, total net profit = RM234m. Based on 13 times PER, market cap = RM3043m, or RM3.13 per share based on 973m shares.


Scenario 2 : CPO price of RM2,700 per MT. Based on 62,000 ha planted and assumed FFB yield of 25 MT per ha (when trees fully matured), FFB production of 1,550,000 MT per annum. Based on OER of 21%, CPO of 325,500 MT per annum. Based on CPO price of RM2,700 per MT, revenue of RM879m. Based on operating cost of RM1,500 per MT CPO, operating cost is RM488m. Based on RM800m debts and 5% interest rate, interest expenses of RM40m per annum. PBT = RM879m less RM488m less RM40m = RM351m. Based on 25% tax, net profit for palm oil = RM263m. Assumed timber makes RM20m, total net profit = RM283m. Based on 13 times PER, market cap = RM3678m, or RM3.78 per share based on 973m shares.

based on the above analysis, JTIasa could trade between RM3.13 to RM3.78 if CPO price stays at RM2,500 to RM2,700 and the trees are fully matured.

Posted by kcchongnz > 2014-02-05 21:41 | Report Abuse

Icon8888,

Good analysis. At least someone has shown some figures to show the value of this company so that we can compare with the price to see if the stock is truly undervalued.

Just a question here. Why do you use a PE ratio of 13 to value JayaTiasa, and not 5, 10, 15 or 20, or even 50? What is the basis?

Posted by Icon8888 > 2014-02-05 21:48 | Report Abuse

Pursuant to the above analysis, it seemed that jtiasa has upside potential. But NOT super undervalued. Jtiasa won't benefit much if CPO make a strong run during this three years, as trees yet to fully matured. It will take "the stars to be aligned" for it to achieve price of RM3.78 (the upper range of my analysis) : trees fully matured (in three years time ?) and CPO at RM2,700 per MT during that period.

In other words, there is a possibility that the existing market price has already factored in a substantial portion of its growth potential. Hence you need a bit of patience with this stock.

Just to cross check : From enterprise value point of view, jtiasa equity value is RM2240m. With debt of RM800m and assumed zero cash (the existing cash will be used up for further capex for planting of remaining land and mills), enterprise value equals RM3 billion. Based on 62,000 ha, EV per ha is RM48,000 per ha. Not really undervalued as i always use RM60,000 per ha as benchmark.

Conclusion : Got upside, not exactly VERY undervalued. Market has more or less factored in the growth potential. Need patience. Probably take three to four years to deliver 70% to 80% return.

Posted by Icon8888 > 2014-02-05 21:51 | Report Abuse

Kkchongz, for a big cap like jtiasa, I think 5 times PER is too low. 50 times unlikely (unless CPO hits RM4,000 ).

I think very likely it will trade within band of 10 to 15 times. I take the middle of 13 times. Just an assumption, based on past experience

Posted by iafx > 2014-02-05 22:00 | Report Abuse

do u know how much this co. is repaying debt interest alone every month?

Posted by Icon8888 > 2014-02-05 22:03 | Report Abuse

Let me guess : RM40m to RM50m per annum ?

Posted by Icon8888 > 2014-02-05 22:07 | Report Abuse

Oh, according to latest quarterly result, about RM25m per annum. Hmmmm this group is getting pretty good rates from the bank...

Posted by iafx > 2014-02-05 22:09 | Report Abuse

and u believe that? good to u