Calvintaneng, lower supply push up price. Did you analyse which company is able to keep its production to reap the benefits or high CPO price? A company can't gain from high CPO price if its production is hurt in the process.
Shaun,
I have many things to post. But I am really tired.
I have most of the Plantation Stocks 10 Year Performance with me as I look into the STOCK PERFORMANCE GUIDE By Dynaquest
OK I will Only Post EPS (Earnings Per Share)
KWANTAS CORP
Year................EPS 2005................12.2 sen 2006................5.8 sen 2007................25.0 sen 2008................48.4 sen 2009................-22.7 sen 2010................1.4 sen 2011................27.3 sen 2012................11.7 sen 2013................13.4 sen 2014................20.3 sen 2015.................-9.4 sen
As you can SEE
El Nino Years are
2007 when EPS is at 25.0 sen
2008 when EPS peaked as a high of 48.4 sen
Again El Nino year in 2011 EPS is a high of 27.3 sen
SO IN EL NINO YEARS WHEN FFB ARE LESS
PROFITS EXPLODED UPWARD
SO BY THESE CORRESPONDING EL NINO YEARS OF 2016, 2017 & 2018
The Edge Malaysia weekly, in its May 8 to May 14 issue, reported that the integrated palm oil producer was eyeing further asset sales after signing a deal last month to sell 3,791 acres of plantation land in eastern Sabah at a loss.
The disposal price was RM100.45 million — a 19.3% discount to the parcel’s book value. It bought the parcel for RM20.52 million in December 1998.
Note what it says:
1) Kwantas eyeing further asset sales after disposing 3,791 acres. So expect more cash coming
2) Disposal price is Rm100.45 millions Original cost was only Rm20.52 millions
So though book value showed lost but ACTUAL GAIN IS A WHOPPING RM79.93 MILLIONS
Based on Annual Report 2016, KWANTAS has a quite effective planting management, achieved average of Fresh Fruits Bunches (FFB) production of 22 Metric Ton per hectare as compared to others plantation counter which only achieve at 15 - 18 Metric Ton per hectare.
Therefore at this current El Nino phenomenon, it is matter of how efficient is the Plantation company to produce more products to earn more. The more efficient, the more KWANTAS earn.
Track record of KWANTAS told us previous El Nino Phenomenon during year 2008 (EPS 48.4 sen) & 2011 (EPS 27.3 sen), KWANTAS can produce more product to earn more.
History will repeat NOW.
So don't miss this golden opportunity now to earn money!!
Thanks calvin, have been following your comments and article for months. 1st time trade and test water with this. Bought 1.69before qr. Numbers seems good there. Should hold longer or take profit? Cpo expected to fall for the rest of year.
Posted by newbtrade > May 28, 2017 01:20 PM | Report Abuse
Thanks calvin, have been following your comments and article for months. 1st time trade and test water with this. Bought 1.69before qr. Numbers seems good there. Should hold longer or take profit? Cpo expected to fall for the rest of year.
Newtrade,
Welcome to i3 Forum
This is your first post.
Congratulations!
You are at the right Forum at the right time!
For Kwantas you can keep this longer term as your entry price of Rm1.69 is far below intrinsic value.
At Rm1.69 Kwantas with NTA over Rm4.00 is selling at 58% book value
And P/E only 10.28
If revalued to P/E 15 Kwantas should trade at above Rm2.20
Calvin knows full well that Analysts have projected that CPO prices might go lower in coming months.
Calvin thinks the worry is unwarranted.
FGV already with JV with China company to import more CPO into China. CPO prices always cheaper than Soy Oil Prices.
Kwantas' palm oil lands will be more valuable as Pan Borneo highway will increase its value.
El Nino coming back to push up CPO prices is a strong possibility.
So from all angles Kwantas is a buy NOW!
Should you take profit after price goes up?
Sell some if price up to average down your cost
So if you buy at Rm1.69
and price up 50%
say Rm2.53
Sell 50% to avearage down your cost
So 2.53 - 1.69 = .84 sen
So minus 84 sen from original cost of Rm1.69 = 85 sen
So you average cost for Kwantas now is only 85 sen
And if you deduct dividend over a period of years then your 85 sen capital will be all given back to you.
The rest of your lives Kwantas will be a free stock whicle you still receive dividends.
This was how I bought UMW 13 years ago. Now my UMW is free for life.
So, 400% return over 19 years on the disposal of land.
Thats 8.72% CAGR, which is sub-optimal, but better than FD.
The thing you must not forget about net asset plays is that, the reason the stock is a net asset play is due to years and years of misallocation of capital to assets with mediocre return. Its cheap now, and it may continue to be cheap for a long time, unless management decides to unlock the value.
Its worth holding a little bit, say 1% of portfolio. But dont expect it to go up next week, next month or next year.
Btw, the 8.72% does not take into account borrowing cost, which should be 4-6%. So really this management invested money at 2-4% CAGR. Which means on average, the management is better off putting the money into FD.
Plus the land is revalued every year. Good practice, but this means they are no hidden assets in the company. RM4 is the absolute highest intrinsic value of this stock. Not exactly optimal. They are many other companies with hidden assets if you want to buy.
This book is the result of the author's many years of experience and observation throughout his 26 years in the stockbroking industry. It was written for general public to learn to invest based on facts and not on fantasies or hearsay....
UndukNgadau
433 posts
Posted by UndukNgadau > 2012-02-04 19:32 | Report Abuse
Mamagampot kopuriman siok Harvest Court Ind. Banyak kawan-kawan beli Harvest dan Kwantas Corporation? Mana satu kodou? Kotoluadan & Muhang