Posted by DatukYauKokSeng > 2013-11-15 00:49 | Report Abuse

Cheapest plantation stock in town. RM20k per hectare

Posted by ckliew88 > 2014-01-18 18:31 | Report Abuse

Dear Dato , my question how large is the plantation ? What is the market value per hectare? How did u come to RM20k per hectare ?

Posted by Icon8888 > 2014-01-20 14:44 | Report Abuse

Enerprise value = debt + equity value - cash = RM25m + (188m shares x RM1.50) - RM2m = RM25m + RM282m - RM2m = RM305m

RM305m / 13,000 hectares = RM24,000 per hectare

Posted by Icon8888 > 2014-01-20 16:43 | Report Abuse

Innorpise is 20% owned by TSH. As such, you can be assured that there is no hanky panky as the Tan family is very professional

Posted by ckliew88 > 2014-02-05 19:47 | Report Abuse

the problem is very difficult to buy the shares

Posted by ckliew88 > 2014-02-05 19:47 | Report Abuse

what is the value or target price per share ?

Posted by Icon8888 > 2014-02-05 21:17 | Report Abuse

from market value point of view : Innoprise existing valuation per ha is RM24,000. Big cap plantation stock probably trades at RM60,000 per ha (standard transaction price for yielding estates). Since Innoprise is small cap, maybe the market will value it based on RM40,000 per hectare ? that would translate into share price of RM2.50, 66% upside from RM1.50 now.

from dividend yield point of view : based on 13,000 ha and assumed FFB yield of 25 MT per ha (when trees fully matured), FFB production of 325,000 MT per annum. Based on OER of 21%, CPO of 68,250 MT per annum. Based on CPO price of RM2,500 per MT, revenue of RM171m. Based on operating cost of RM1,500 per MT CPO, operating cost is RM102m. As there is no interest expense, PBT = operating profit = RM171m less RM102m = RM68m. Based on 25% tax, net profit = RM51m. As innoprise has no debts, it is in a position to distribute all net profit. Based on dividend yield of 6% required by equity investors, Innoprise could potentially trade at RM4.53 per share.

based on the abovementioned two methods, Innorpise could potentially trade at range between RM2.50 to RM4.50. For me, I am happy if it can reach RM3.00. That would give me 100% return based on current market price. I would be happy when that happen.

Posted by ckliew88 > 2014-02-06 09:41 | Report Abuse

well from your explaination above, you must be a genius or an analyst.
What is OER ? how come still trading at 1.50 ?

Posted by Icon8888 > 2014-02-06 10:41 | Report Abuse

Ckliew88 I think it is trading at 150 because they have yet to register profit (waiting for trees to mature). Which is going to happen soon as they started planting in 2007 (5000 ha)

OER stands for oil extraction rate, the amount of CPO that can be squeezed out of one metric ton of fresh fruit bunches

I no genius lah. Just happen to have done some reading about oil palms and picked up some knowledge

Posted by ckliew88 > 2014-02-07 18:03 | Report Abuse

Wanted to buy but very illiquid ..., not many sellers.

Posted by Icon8888 > 2014-02-12 14:26 | Report Abuse

ckliew any luck ?

Posted by Up_down > 2014-02-12 15:11 | Report Abuse

Need to beg the seller. You can only get 5 lots at the price 1.67.

Posted by Icon8888 > 2014-02-12 16:22 | Report Abuse

this stock is interesting as it is debt free. Hence can potentially distribute all its profit.

lets say we adopt a very conservative assumption of RM20m net profit. That would be EPS of 10 sen. If they distribute the entire 10 sen as dividend, the dividend yield will be 10 / 150 = 6.7%

if they make RM30m net profit, EPS is 15 sen. If they distribute 15 sen dividend, dividend yield will be 15 / 150 = 10%

if they make RM40m net profit, EPS is 20 sen. If they distribute 20 sen dividend, dividend yeild = 20 / 150 = 13%

do you think my calculation make sense ? or is that an error (or) a catch ? it sounds too good to be true...

Posted by Up_down > 2014-02-12 17:51 | Report Abuse

You are very optimistic.
INNO is currently building a palm oil mill to be completed in year 2014. The mill costs about RM 47 million as stated in latest quarterly report under Capital Commitment. Existing borrowing is 21 million. Don't expect high dividend in next 3 years.

Posted by Up_down > 2014-02-12 18:10 | Report Abuse

Currently, Delloyd's palm oil segment earned profit 4 million in the last quarter. The planted area is almost similar size for INNO & Delloyd.

INNO should not have any problem to achieve 30 million profit after 3 years provided CPO is at least maintained at this level. Net profit of 30 million is equivalent to 15.8 cents / share. It's not possible to distribute 100% profit as dividend at the net profit level of 30 million.

Net profit of 40 million is equivalent to 21.2 cents / share.

Posted by Icon8888 > 2014-02-12 19:07 | Report Abuse

updown, i am delighted to find somebody who knows about inno. This counter is so overlooked sometime i just wonder whether i am the only one looking at it.

well, you are right. i may have been overly optimistic in terms of dividend yield. Happy to hear from you about the facts (capex, loans, etc) which i have conveniently ignored when i browsed through their quarterly.

since you seemed to have a good feel about this company, may i seek your view on the following :
(1) target price ?; and
(2) potential dividend yield ?

Posted by leslieroycarter > 2014-02-12 19:14 | Report Abuse

Usually , the trading is 2/3 or half of NTA which translate the present price which is fully factored in at 1.56-1.62....

Posted by Icon8888 > 2014-02-12 19:59 | Report Abuse

alamak, means now already fully valued ?

Posted by Up_down > 2014-02-12 20:25 | Report Abuse

The potential CPO to be generated from the future fully mature area is about 54,600 ton ( 13,000 hectares x 21MT/hectare x 20% OER ). With every RM 100 of CPO price, INNO would generate additional 5.46 million or EPS 2.9 cents. To earn profit after tax 30 million, it needs to enjoy a margin of CPO about RM 720/ton.

The share price is much depend on the CPO prices movement unless INNO has fully planted 22,700 hectares of land. The dividend yield is normally 1 to 3%.

Posted by Icon8888 > 2014-02-12 21:41 | Report Abuse

What is the rationale for paing so little dividend ? RM70m debt is not such a heavy debt burden. There should be plenty of cash to pay dividend after servicing debt obligation ?

Posted by Up_down > 2014-02-12 22:05 | Report Abuse

Normally, the management would reserve funds to acquire assets for future business growth. It is unlikely for them to distribute 50% profit as dividend. 30% is good enough. Many companies prefer to pay more dividend gradually to show the solid future prospects.

Posted by Icon8888 > 2014-02-12 22:09 | Report Abuse

3% too little.. Should pay more..

Posted by ckliew88 > 2014-02-12 23:05 | Report Abuse

tried to buy but very few sellers only 5k @ 1.67 , im not sure to wait ?
dear upndown , what is value of inno plant ?

Posted by Up_down > 2014-02-12 23:14 | Report Abuse

Ckliew.

I would not buy at 1.67. The upside potential is not justified given its current level of planted area. Of course, if CPO price climb higher, almost all share price of plantation companies would follow suit.

Posted by ckliew88 > 2014-02-12 23:18 | Report Abuse

inno has 13k hc , if palm oil per hectare value 50k - 13000 x 50000 = 650m - 25m debt / 188m shares = 3.32 per share

Posted by Up_down > 2014-02-12 23:39 | Report Abuse

If majority of investors follow your way of valuation, the share price would definitely shot up higher. I am more conservative on making a valuation.

Posted by Icon8888 > 2014-02-13 02:48 | Report Abuse

A good investor is one that can see things before others. By the time others see inno potential, it would be too late already

Posted by Icon8888 > 2014-02-13 02:50 | Report Abuse

Ckliew mayne you can get if u queue to buy at 160. I got some by doing that.

But don't worry, I won't dump at you. My target price is RM2.50 to 3

Posted by Up_down > 2014-02-13 12:33 | Report Abuse

yeah. It would go higher. Just discovered something new. It's neither TAAN or Jtiasa. You would be surprised after making an evaluation of Sarawak Plantation.

Posted by Icon8888 > 2014-02-13 12:35 | Report Abuse

Inno is Sabah, right ?

Posted by Up_down > 2014-02-13 12:39 | Report Abuse

INNO plantation unit is located in Sabah. This counter is really illiquid.

Posted by ckliew88 > 2014-02-13 17:45 | Report Abuse

try to buy but very difficult , very few sellers

Posted by Up_down > 2014-02-13 17:48 | Report Abuse

You can goreng it with a small capital since not many sellers.

Posted by ckliew88 > 2014-02-19 00:24 | Report Abuse

hi updown , how to goreng , im only a small investor

Posted by Icon8888 > 2014-02-20 14:21 | Report Abuse

cpo up. even this stupid company also going up....

Posted by masteragu > 2014-02-20 14:24 | Report Abuse

selamba call people company stupid...:)

Posted by Icon8888 > 2014-02-20 14:30 | Report Abuse

he he my mouth called it stupid, but my heart sayang sayang. I am the major promoter of this company in i3. So the higher it goes up, the more happy i am

Posted by Up_down > 2014-02-20 15:03 | Report Abuse

It is hard to buy many shares at low price. INNO has fully planted its 13,000 hectare of land. It enjoys double digit growth of FFB production at least in next 5 years.

Posted by Icon8888 > 2014-02-20 15:14 | Report Abuse

you got ah ?

Posted by Up_down > 2014-02-20 15:25 | Report Abuse

After making a comparison with other plantation companies, it seems worthwhile to buy now but take time to collect ticket.

Posted by Icon8888 > 2014-02-20 15:26 | Report Abuse

i got a bit. My cost 155

Posted by Up_down > 2014-02-20 15:32 | Report Abuse

I don't feel different much between 1.55 & 1.65 since the potential is there . I will collect slowly.

Posted by Icon8888 > 2014-02-20 15:33 | Report Abuse

what else is good ?

Posted by Icon8888 > 2014-02-20 15:34 | Report Abuse

what else can buy ?

Posted by Up_down > 2014-02-20 15:47 | Report Abuse

I bought Kulim & TAAN too.

Posted by Icon8888 > 2014-02-20 15:51 | Report Abuse

kulim what price you bought ? now can still buy ?

Posted by Up_down > 2014-02-20 15:55 | Report Abuse

Bought at 3.40. It' still worthwhile for me to buy 3.50 cause i would not expect to sell at this price.

Posted by Icon8888 > 2014-02-20 16:09 | Report Abuse

you are a palm oil worm. Your only diet is palm oil, ka ka ka

Posted by Up_down > 2014-02-20 16:19 | Report Abuse

Currently, I focus property (Asiapac & KSL) & plantation companies. It's high time for plantation counters since CPO prices have been rising recently and potential of El Nino impact on palm oil business latter.

Posted by ckliew88 > 2014-02-20 23:08 | Report Abuse

INNO moved today. Anyone can give opinion - Can buy innoprise ?