Posted by pradeep > 2012-09-18 12:04 | Report Abuse

Tuniamasingh I read the report in this wed site, do you have the research by Public Invest in detail.

Posted by kl foong > 2012-09-18 12:12 | Report Abuse

Pradeep, are u referring to the one appear on 3 sept.
KFIMA - Anticipated Reduction
Author: PublicInvest | Publish date: Mon, 3 Sep 12:10
________________________________________
Outperform | 12-Month Target Price RM3.21 | Current Price RM2.20 | Expected Return 46%

For 1QFY13, Kumpulan Fima Berhad (KFima) registered a decrease in revenue (-8.8% y-o-y, +7.4% q-o-q) to RM116.6m from RM127.8m in the previous year with PBT falling (-25.1% y-o-y, -6.9% q-o-q) from RM49.5m to RM37.1m. The reduction was mainly attributed to the group‟s plantation division affected by depressed global crude palm oil (CPO) prices and lower revenue from its oil palm production and processing activities.

Despite the reduction in 1QFY13 results, we remain bullish about KFima‟s performance going forward on the back of i.) a well-diversified business structure, ii.) potential expansion plans, iii.) sum-of-parts (SOP) valuation being undervalued coupled with its abundant free cash flow position which we estimate will continue to exceed the RM100m per annum benchmark. We thus maintain our Outperform recommendation at TP of RM3.21 with 46% upside also bearing in mind PBT has achieved 20.6% of our full year FY13F forecast earnings.

Posted by kl foong > 2012-09-18 12:13 | Report Abuse

• Sustainable prospects. We are positive on KFima‟s segments portfolio as the next phase of growth focused on its food division (revenue +34.9% y-o-y, +24.7% q-o-q) has begun to materialize through higher sales volume. The bulking division has also performed better (revenue +15.8%, PBT +29.6% y-o-y) from higher throughput of edible oil and base oil products. Management has expressed challenges in the economic environment ahead, with anticipated variation in the edible oil transshipment business arising from differential export duty structure between Malaysia and Indonesia. Assuming the reduction in throughput would be offset by increased transshipment activities in base oil and import of industrial chemical products, utilisation rates to would be maintained at the current levels.
• Optimistic outlook on plantation contribution. KFima‟s expansion plans also focuses on growing its plantations division through continuous potential acquisition of brownfields. The division‟s current quarter results were poor, affected by its Indonesian subsidiary PT Nunukan Jaya Lestari‟s shortfall from lower sales volume of CPO (7,205mt at RM2,725/mt avg. selling price net of duty vs 12,586mt at RM2,738/m in 1QFY12) and no sales of crude palm kernel oil this quarter. In spite of this, we believe plantations as the third largest contributor to KFima‟s PBT (22% contribution) still has vast opportunities to contribute to KFima‟s performance in the long-run, as their trees are still at its early stages of maturity and some being new plantings.
• Maintain Outperform. We continue to believe KFima is undervalued at FY13F forward PE multiple of 6x, trading at a discount to its peers. For a 5 core business structure company we maintain our view of further upward pricing opportunities towards our TP of RM3.21 with 46% upside.

Source: PublicInvest Research - 3 Sept 2012

Posted by pradeep > 2012-09-18 16:18 | Report Abuse

kl foong yes and with due respect to the author I do not agree the target price is RM3.21. To my opinion it should be around RM2.80

Posted by kcchongnz > 2012-09-18 16:31 | Report Abuse

pradeep,
Can you share with us why you do not agree with PublicInvest and how did you come to a target price of 2.80?

Posted by pradeep > 2012-09-18 17:12 | Report Abuse

Look at the cash and look at the profit from all the sectors of Kfima

Posted by chongkonghui > 2012-09-18 17:19 | Report Abuse

it is about valuation?

pradeep give lower PE factor than PublicInvest?

RM2.80 is a fair value too good to be realised at current moment, subject to the following:-
- ESOS
- Dividend Yield
- Next quarter Performance

Posted by tuniamasingh > 2012-09-18 17:39 | Report Abuse

Very good write up from Cold Eye in Nanyang
http://www.nanyang.com.my/node/463316?tid=808

当一家上市公司的股价有变动时，你最好重读其年报和季报，也许你可以从中找到其股价变动的根源。

例如菲马集团(KFIMA)的股价，昨天（7月18日）跃升至2令吉23仙，是十年来的最高价。作为小股东的散户，都是局外人，根本不知道公司发生了什么事，或是什么因素导致该股的股价上升。

不过，假如你翻阅该公司2011年的年报的话，你会发现该公司的盈利，在过去5年中年年上升。

过去5年之每股净利为：

2008：11.51仙。

2009：17.54仙。

2010：22.32仙。

2011：26.99仙。

2012年(至3月)：30.70仙。

该公司的股价其实只是跟着盈利而上升而已，一点也不奇怪。

注意公司业绩表现

还会继续上升吗？那就要看该公司盈利的上升趋势，能否持续而定了。如果该公司将来的盈利一如过去5年那样，持续上升的话，股价继续上升是意料中事。作为投资者，你应该注意的是该公司的业绩表现，只要盈利继续上升，你可以继续投资下去。

业绩改善股价合理应续投资

如果你细读菲马集团(KFIMA)到今年3月31日时的第四季季报的话，你会发现该公司以2亿6500万令吉的资本，却拥有2亿5500万令吉的净现金，每股净现金高达95仙。

以昨天(7月18日)2令吉23仙的股价计算，扣除了95仙的现金之后，你实际上是以每股1令吉28仙(2令吉23仙-95仙=1令吉28仙)的价格购买该公司的股份。以2012年每股30.20仙的净利计算，实质本益比仅为4.2倍，还是便宜。

作为局外人的散户，我们根本无从知道该公司的动向，更不要说股价的起落了。在这种“被动”的情势中，最好的策略是以不变应万变，只要公司的业绩继续改善，而股价又还是合理，就继续投资下去。

那么，是不是永远不卖？也不是。如果出现以下情况的话，还是要退股：

⑴盈利下跌，而短期内不可能恢复上升，就应退股，改投资于别的公司。

⑵股价被极度高估(例如本益15倍以上)，再投资下去，变得本大利小，也应退股。

【股票投资最高境界】

结论：

⑴多读年报有助于发掘宝藏。

⑵只要盈利持续上升，可以长期持守。

⑶业绩扭转及估值过高，均应退股。

⑷股票投资，需要监管。

如果低价买到好股，只要盈利持续上升，就应继续持有，不要理会短期股价波动。

“为无为则无不治”（老子），是股票投资的最高境界。

Posted by kcchongnz > 2012-09-18 17:45 | Report Abuse

pradeep, i have looked at all those stuff you mentioned. So what about them? How do you relate them to your fair value of 2.80? chongkonghui, how does ESOS, dividend yield and next quarter performance affect your fair value? tuniamasingh, thanks for posting coldeye's article, very good. But it doesn't mention about "target price".

Posted by tuniamasingh > 2012-09-18 18:18 | Report Abuse

yes KC Chong. He never mentioned about the target price. But he gives very indication when to sell..

(1) when profit has dropped (2) P/e above 15

如果你细读菲马集团(KFIMA)到今年3月31日时的第四季季报的话，你会发现该公司以2亿6500万令吉的资本，却拥有2亿5500万令吉的净现金，每股净现金高达95仙。

以昨天(7月18日)2令吉23仙的股价计算，扣除了95仙的现金之后，你实际上是以每股1令吉28仙(2令吉23仙-95仙=1令吉28仙)的价格购买该公司的股份。以2012年每股30.20仙的净利计算，实质本益比仅为4.2倍，还是便宜。

作为局外人的散户，我们根本无从知道该公司的动向，更不要说股价的起落了。在这种“被动”的情势中，最好的策略是以不变应万变，只要公司的业绩继续改善，而股价又还是合理，就继续投资下去。

那么，是不是永远不卖？也不是。如果出现以下情况的话，还是要退股：

⑴盈利下跌，而短期内不可能恢复上升，就应退股，改投资于别的公司。

⑵股价被极度高估(例如本益15倍以上)，再投资下去，变得本大利小，也应退股。

Posted by kl foong > 2012-09-18 19:10 | Report Abuse

When I buy a share, I set my own TP - certain percentage depending on the company performance and market sentiment. TP from the research houses act as a guide only.
For Kfima, i am considering entry at below RM 2.

Posted by kcchongnz > 2012-09-18 19:40 | Report Abuse

tuniamasingh, thanks for pointing out coldeye's thought. At least there is a guideline on what Kfima is worth. I kind of agree with him though I think everyone has a different view. However, Kfima's earnings have been growing at 22% each year for the last 5 years. Nobody should just look at the short-term earnings of just one quarter and decide the long-term prospect of a company. Coldeye mentioned about sell if PE more than 15. This means Kfima should only be sold if it goes over RM4.50 (15*0.30)? Or RM5.50, ie RM4.50 plus the excess cash per share of about RM1.00, which can theoretically be distributed to shareholders without affecting the earnings potential of its ordinary business? There is no right or wrong answer, but at least there must be a reasoning how one's "target price" comes about.

Posted by tonylim > 2012-09-18 20:49 | Report Abuse

Klfoong, consensus is three and above. Another ringgit to go. How? I am waiting for the day. Also kcchong Rm 4.50.
Endless stream of staff selling at esos price.

Posted by kcchongnz > 2012-09-19 05:26 | Report Abuse

tonylim, I just like to clarify that RM4.50 is not my target price for Kfima. I only mentioned according to Coldeye's criterion as posted by tuniamasingh, Kfima (or other shares of good companies) should be sold when it reaches RM4.50 with a PE of 15. I did post my valuation of Kfima using DCF analysis of owners earnings on 12 September 2012 on this thread with my assumptions and stated that "the intrinsic value of Kumpulan Fima is RM3.87 per share, or a big margin of safety of 47% based on today’s price of RM2.05". I would not have bought any shares if its share price is fully valued at its intrinsic value and would have sold all my Kfima shares before it reaches the intrinsic value.

Posted by pradeep > 2012-09-19 09:27 | Report Abuse

Let us wait and see whether there is any good news at the AGM on 25.9.2012

Posted by tuniamasingh > 2012-09-19 10:21 | Report Abuse

Pradeep,8 sen dividend per share before tax only two weeks away. Let's wait and see.

Posted by chongkonghui > 2012-09-20 09:42 | Report Abuse

With huge cash pile, if KFIMA declares more dividend per share, the share price will increased, for sure.

ESOS - Generally, staff will dispose if the gap is big, to take immediate 'bonus'. Too much ESOS will affects but I believe is short term.

Next quarter results - if growth on track, TP RM3.21 should be coming soon...

Posted by kcchongnz > 2012-09-20 10:52 | Report Abuse

Should dividend yield affect shareholder value? Companies can use the free cash flows to do a few things such as to distribute to shareholders as dividends, to purchase its own shares, to reinvest in new projects, and to pay down debts. Kfima has not much debts to pay down. Kfima can distribute more dividends to shareholders and that would boost up the share price. However this may not be the best interest of shareholders because any dividend declared has to pay company tax at 25% and all shareholders effectively lose this 25% with the new single tier tax regime. It would be better for Kfima to purchase its own shares with the excess money if it thinks the share is undervalued. This effectively reduce the number of shares outstanding and hence increase its earnings per share. Kfima's share price would rise accordingly and shareholders can sell of part of his shares to get cash needed and there is no capital gain tax in Malaysia. Kfima can also use its FCF to reinvest more such as increase its palm oil land bank, etc and this may be more beneficially to the shareholders as its Return of invested capital has been high at more than 25%.
Kfima's ESOS is not much and it doesn't really affect its intrinsic value much (this can be evaluated using option pricing method and the whole thing won't be more than 20m). It may affect its share price temporary only as employee sell off their converted shares.
One should not be influenced too much by quarterly results. Investment should be long-term. Quarterly results always fluctuate.

Posted by tuniamasingh > 2012-09-20 11:11 | Report Abuse

Actually if you were to look at latest announcement by Kfima on 12/09 the new batch of ESOS price has increased to 1.76. The era of RM1.48 is alredi over.

Latest issued and paid up share capital after the above corporate proposal in the following
Units 267,242,400
Currency MYR 267,242,400.000
Listing Date 13/09/2012


Remarks :
Issue price per share ($$)*: 169,000 shares at RM1.48 and 55,700 shares at RM1.76

Posted by pradeep > 2012-09-20 23:14 | Report Abuse

Now we already have Kfima and we have to work together to find some other good stocks. Can we look into Harisson,Puncak, TGUAN and if any of you have any other stock we an share our knowledge with each other.BY the way I may not be coming at the AGM on 25.9.2012 because my mum is not feeling well.Any one of you who go for the AGM please brief me up.Thank you.

Posted by pradeep > 2012-09-20 23:30 | Report Abuse

Look at Tasco this stock also have fundamental value

Posted by chongkonghui > 2012-09-21 00:27 | Report Abuse

I view quarterly results on long term basis.... whether the growth is sustainable, growing or hiccup etc...

E.g.... will monitor OLDTOWN as the story about CHINA etc... I bet the next quarter results prove the story not bankable.

Posted by heehaa > 2012-09-21 04:28 | Report Abuse

KUALA LUMPUR: Crude palm oil futures contracts on Bursa Malaysia Derivatives closed sharply lower yesterday with the December contract falling to its 2012 low, dealers said.

September 2012 shed RM30 to RM2,675 a tonne, October 2012 fell RM38 to RM2,775 while November 2012 and December 2012 shed RM39 each to RM2,820 and RM2,883.

Volume dropped to 41,875 lots from 44,696 lots on Wednesday, while open interest rose to 165,517 contracts from 164,949 contracts before.

Read more: CPO futures end sharply lower http://www.btimes.com.my/Current_News/BTIMES/articles/cposept21/Article/#ixzz272mNyeiZ

Posted by heehaa > 2012-09-21 04:30 | Report Abuse

Yoy quartetly earnings most probably will below last year

Posted by tuniamasingh > 2012-09-21 09:24 | Report Abuse

If EPS drops to 7 sen from 7.8 sen due to the plantation sector which contributes about 30% profit only, annualise it 28 sen for whole year, current price 2.10 translates to P/E 7.5 and net cash per cash share 1.00,and if you still say the stock is expensive then let it be.

You can buy Johor Tin very good company p/E 8.8, net debt 15 million and compare it with Kfima.

Posted by tuniamasingh > 2012-09-21 09:30 | Report Abuse

Proceeds from IGB Reits to put in Kfima q at 2.10. Average up from original cost 2.03.

Posted by edmundgooi > 2012-09-21 09:35 | Report Abuse

Yes alot people say Kfima at P/e 7.00 and net cash per share 1.00 very expensive and all think that Kfima is plantation stocks.

Use perception to buy stock, good luck.

Posted by aunloke > 2012-09-21 10:16 | Report Abuse

We shouldn't focus too much on its earning, it won't be far off. The bet here is on the take over of Fimacorp, it has enough cash to offer even @ 8.00 per share for the remaining 32M shares and in doing so it cash coffer can still remain intact cos Fimacorp has large cash coffer as well.

Posted by kcchongnz > 2012-09-21 12:33 | Report Abuse

Quarterly results always bounce about because of seasonality, cyclical events etc. The better picture should be the annual results. Even that annual results may bounce a bit and one should not based on any single year results. One should look at its business whether there is any sustainable moat. In terms of financial performance, one should look at its long term trend, 5 years, 10 years, and its growth. Other things are if earnings are translated to cash flows and healthier balance sheet etc. If you look at all these in details, Kfima fits in every aspects. How can Kfima be traded so cheap as stated by edmundgooi and tuniamasingh? Yeah, market is not be efficient in my opinion.
uunloke, the cash in fimacorp is part of the same cash in Kfima's balance sheet. As Fimacorp is a subsidiary, its financial statements is consolidated into Kfima. I think it is too much to pay 8.00 for Fimacorp as its market price is only 6.20. If I am a Fimacorp shareholder, I am happy if you pay me 20% premium.

Posted by aunloke > 2012-09-21 12:54 | Report Abuse

KC thanks for the info and I still hope that it takes over Fimacorp cos its earning will jump to the next level so will its share price.

Posted by pradeep > 2012-09-21 17:38 | Report Abuse

I agree with KC opinion. Kumpulan Fima had hard times and now the company had been restructure.I am sure they do not want to go into deep water.

Posted by tonylim > 2012-09-21 23:46 | Report Abuse

damn,i went through the hard times with them

Posted by heehaa > 2012-09-22 09:56 | Report Abuse

CPO FUTURES

KUALA LUMPUR: Prices of crude palm oil futures on Bursa Malaysia Derivatives closed sharply lower yesterday amid reports of higher stocks of the commodity, a dealer said.

She said the inventory levels had reached the highest level at above 2.2 million tonnes in September and also this year, due to the brisk pace of the US soya bean harvest, as well as the continued global economic concerns.

September 2012 and October 2012 shed RM82 each to RM2,593 and RM2,693 a tonne respectively while November 2012 and December 2012 shed RM57 each to RM2,763 and RM2,826 respectively.


Read more: CPO futures dive on higher stock reports http://www.btimes.com.my/Current_News/BTIMES/articles/gdhskhd/Article/#ixzz279xHRKDu

Posted by heehaa > 2012-09-22 09:58 | Report Abuse

U can talk watever u wan.. The fact is tat in the imediate term, there is no reason to buy this stock... Downside risk prevail

Posted by kcchongnz > 2012-09-22 11:47 | Report Abuse

We, or at least myself, very much welcome alternate view from people like heehaa because sometimes we being human being could have cognitive bias of overconfidence on a stock we like for example Kfima. We need opposite view to curb our emotion to prevent us from losing money big time in something which we could be wrong. However, it would be more useful and constructive if heeha can provide us substantiation with figures on how much the drop in palm oil price, if it is temporary or permanently, affects the long-term prospect of Kfima's business and that at present price, it is too expensive or too risky and one must sell and run, bearing in mind that the cyclical plantation constitute only 30% of its business and its other businesses have been growing.

Posted by aunloke > 2012-09-22 12:02 | Report Abuse

Agree with you heehaa, but if the trend continues I'll be ready for my fourth bet when it drops below 2.00.

Posted by tuniamasingh > 2012-09-22 14:37 | Report Abuse

Heeha is a stock god here, his prediction very chun sell by all means I am waiting here

Posted by tonylim > 2012-09-22 15:05 | Report Abuse

Do a cross deal

Posted by aunloke > 2012-09-22 15:26 | Report Abuse

How to ! I don't think he has any.

Posted by heehaa > 2012-09-22 17:04 | Report Abuse

U r absolutely right, kfima is not in my prefered stock list n i hold none of tis stock... I dun hv tat kind of feeling tat must hv or buy tis counter like u guys thought

Posted by kcchongnz > 2012-09-22 17:13 | Report Abuse

Oh, just feeling, nothing more than feeling. Anyway, there is no right or wrong in investment. It doesn't mean that as most of us here believe (and have analyzed) Kfima is a good investment that its stock price will go up. Far from it. I respect your feeling.

Posted by pradeep > 2012-09-24 10:02 | Report Abuse

if you have the holding power you can buy

Posted by Siew Jian Bin > 2012-09-25 21:42 | Report Abuse

Any respond from the management about the future of Kfima in the AGM?

Posted by tuniamasingh > 2012-09-26 10:32 | Report Abuse

Have attended both AGM for both Fima corp and Kumpulan Fima and here are the main take:-
(1) MD Rosalan has confirmed that they have received the proposed merger between Fima corp and Kumpulan Fima due to deeply undervalued for both stock. The final decision will be up to the discretion of management
(2) for the profit guidance for this year, even the CPO price has dropped to RM2,658 now as the cost per tonne for Palm oil production for thr company's plantation is only Rm1,4000 , Roslan is confident that the company can maintain decent profit which is about same as last year.
(3) the company can utilize the tax credit about 10 sen per share to be declared as dividend to shareholders. Bear in mind that the amount will be forfeited is the company does not utilize the amount by next year.
(4) since this is 40 year anniversary of the company one shareholder has asked about the possibility of declaring special dividend and the management will look into it.

Posted by kl foong > 2012-09-26 10:42 | Report Abuse

TQ for the info.

Posted by pradeep > 2012-09-26 12:08 | Report Abuse

tuniamasingh thank you for your info. I owe you a treat if happen to come to malacca get in touch with me.

Posted by chongkonghui > 2012-09-26 12:37 | Report Abuse

Have to be Patience to wait for the counter be fully valued, while collecting NOT TOO BAD dividend.

Posted by kcchongnz > 2012-09-26 12:40 | Report Abuse

tuniamasingh, very kind of you to relay to us what happened in the AGM. I see good signs from what you have listed. Below is my speculation:
1)It really make sense that Kfima can pay off the minority shareholders of Fimacorp (at a premium of course) as I have posted my analysis about a week ago. Now that the MD has mentioned that the management has received this proposal and contemplating on it, this is a very good sign that value of Kfima could be unlocked.
2)I do think what the MD said about the profit of this financial year will not be much different from last year although palm oil price has dropped quite a bit. This is because while earnings from palm oil would likely to decrease, other segments would probably make up the shortfall as they have consistently shown that these segments have been growing in revenue and profitability. Let say if Kfima can still make earnings of 30 sen per share the coming fiscal year, using a simple earnings capitalization method of valuation and with a reasonable required return of 10%, Kfima should be worth RM3.00 (30 sen/10%) per share. Mind you this assumes there is no more future growth for Kfima which is highly unlikely.
3)This is a very good piece of information. I strongly think that another dividend of 10 sen per share will be declared in due course in order to utilize the provision in section 51 (or is it section 110?) (dividend). Tax payers of low tax bracket and retirees can claim back this tax imputation up to 25%.
4)Item (3) above may be done as special dividend as requested.

Posted by tuniamasingh > 2012-09-26 12:43 | Report Abuse

You are welcome Pradeep and Kl foong. My personal opinion is that Kfima' smanagement are very conservative and they really think twice before answering any questions from the floor. They will not simply promise if they cannot deliver.. The floor are actually very satisfied with the management performance especially one Indian old man praised the management for consistent good profit for the past 5 years and supported warmly by the floor. From what i see Kfima and Fima corp has very strong 3 catalyst:

(1) good dividend payment this year with 10 sen per share is already quite sure unless the managemnt

Posted by KC Loh > 2012-09-26 12:50 | Report Abuse

Yeah, thanks tsingh, I am still looking at this counter with anticipation of a buy in