what trouble land? all farm lands initially are trouble land ,need to be clear ,get trees planted , and put in sufficient fertiliser,and then land becomes good and productive.ShinYang is operating with insufficient capital, incured debt, need to merge with well funded entity.
the real worry in general,I think is this, people worry about high production in Indonesia,with high supply that may cause CPO price to fall to unprofitable level.This i think is not going to happen.Current Cpo price in world market is around 2500-2600 ringgit per tonnes, and cost of production for CPO ranged from 1500-1700 per tonnes in malaysia.
global markets are forecasting soybean output (a common substitute of palm oil) in USA, Brazil and Argentina to increase significantly despite unfavourable weather forecast in 2017 (I don't know why such paradox appear). ----------- the answer to this is quite simple ,the planted acreage this season is report as 7% enlarged as compare to last year, so unfavourable weather may reduce production some what , but still the end result still could be bigger then last year figure. ON the demand side , you should see China import of soyabean is also increasing with sizeable %. (please refer to USDA world supply and demand report)
thank you @enning22 for the extra information. I totally agree about the Indonesian production fear plus Indonesia has been seizing bigger market share over the years. In my own opinion, SOP is highly undervalued and found a bottom already
u obviously do not know how things work in sarawak.
the big issue facing plantation companies in sarawak is native land rites issues, which can dragged on for yrs and may not be resolved easily.
even if a company works with the state govt via pelita, the company will still get into legal issues. and furthermore, there is the rspo and csr with major mnc to deal with.
thats why u dont see klk or up venturing into sarawak or even ioi expanding its footprint in sarawak since 2006.
i did see many MATERIAL LITIGATIONs between THPLANT vs respective parties, and not so with SOP, further your accessment of production cost is bias and not correct (refer your post in calvin column).
a) I took a focused approach whereby I only want to look at their palm oil plantation business since their property business as of 2016 was really small although it is expected to be bigger due to completion of their various Property Development projects. Simply speaking, I personally have no grasp of their future direction with their property segment which is why I try not to put a hard figure for it. b) Acquisition of additional shares in an associate is 0 in 2016 c) I must have left out this figure by accident as it was a very small figure d) Same mistake with (c) I apologize for these mistakes
Acquisition net of cash should generally be included in capital expenditure requirement because some companies grow through acquisition instead of investing into new property, plant and equipment. The reason it should be net of cash is because you are acquiring the enterprise (i.e. you acquire the counter-company's debt and cash too so the total price paid is actually market cap + total debt - total cash).
The decrease in trade payables (516091) is just the result of SOP's management of their working capital. It can be because the late payment interest charges are about to be commence that motivate them to pay off the account payable or it can be of other reasons too. I can't confidently say I will know "WHY" they decided to pay off those payables.
If you read page 20 of 2016 annual report, you can see that the company acquired ShinYang with a combination of different financing strategies. I may not be 100% right but these are my takes on this company.
Noted with thanks - the purchase price is not only 284,432 but also inheritance debt of 588,573.
Best regards
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Hafid
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Posted by Hafid > 2017-07-02 07:38 | Report Abuse
Shin Yang is selling to sop because the land is a trouble land. So let sop bear the consequence of it. Own co and way.