Blog: Gloves - Times of Adversity

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7 comment(s). Last comment by i3gambler 2022-07-09 14:45

calvintaneng

56,569 posts

Posted by calvintaneng > 2022-07-09 07:17 |

Post removed.Why?

calvintaneng

56,569 posts

Posted by calvintaneng > 2022-07-09 07:23 |

Post removed.Why?

calvintaneng

56,569 posts

Posted by calvintaneng > 2022-07-09 07:33 |

Post removed.Why?

calvintaneng

56,569 posts

Posted by calvintaneng > 2022-07-09 07:37 |

Post removed.Why?

i3gambler

725 posts

Posted by i3gambler > 2022-07-09 09:15 | Report Abuse

For any business:
1) High profit margin would not be maintained for long period.
2) Narrow (and loss) profit margin, would also not last for long time, unless such business is no longer needed.

Calvin is correct, no doubt plantation high profit margin could last a bit longer compare to glove.

As the price is coming down, we need to look at 'biological assets' in the quarterly reports.
Especially to those companies which have high ratio of = FFB production / Market Cap.
In general, plantation companies with high debt, and those small companies have very high FFB / M.Cap ratio.

When the palm oil price went up, biological assets also went up, contributed significantly to the net profit.
Now the price is coming down, the biological assets come down too, will cause the quarterly result look very bad.

Considering this point, I have sold all my SWKPLNT, and buy more BKAWAN.

calvintaneng

56,569 posts

Posted by calvintaneng > 2022-07-09 11:53 | Report Abuse

Batu Kawan ok but I think Simedarby Plant much better as it has 3 positive factors

1. With 3.3 Million acres Simeplant is world biggest and is fully integrated with economy of scale now

2. With a 200 history many estates of Simeplant are freehold and located near townships. book value as low as Rm12k an acre

now current value is Rm200k to Rm250k per acre. Lots of value to be unlocked like Bplant

3. Kwap just bought 1 million Simeplant knowing it's potential

i3gambler

725 posts

Posted by i3gambler > 2022-07-09 14:45 | Report Abuse

True, SIMEPLT value is in its estate land,
However, I think may be 200K / acre is only for those small piece of land very near to town.
I might buy SIMEPLT if it goes down below RM3.50.

For larger piece of estate land, eg. United Malacca sold 1021 ha Freehold (Melaka / N.Sembilan) at 171,000 / ha only.

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