1st half 2017 profits already 75% of previous full year 2016 2nd half 2017 profits with higher production & prices expected to be 20- 25% more than 2016 Overall, 2017 may exceed 2016 net profits by 40-50% ...whatever, it's exceedingly good for this plantation stock
If this year Q3 & Q4 results can net 13M & 14M profits, then total for year net profit 44M. This will match the Cepat's best year in 2011 when CPO price was RM3200 pmt. Mill & Power plants can continue to increase its profits of 3M each per qtr with efficiency and capacity utilisation... Good prospects for Cepat! December dividends coming...
Last year in 2016, Cepat was disastrous.... had impairments from Indon venture, oil mill and biogas plant just struggling.... I wonder whether Cepat has replaced those responsible for the Indon fiasco and those who are unable to fix the mill.... The plantation and oil mill business is is a very simple business and the the Malaysians are already World's Best.After more than 17 years, the plantation should be a cash generating machine... so what gives?
For this year, it should be much better as FFB production and CPO prices almost similar for Q3 & Q2... PK prices are better in Q3, so gross profit from estates maybe about 10M. Mill should make more profit with only 10% processing margin this year. Power plants now only in working order. By Q3 results, net profits for 9 mths should exceed the 12 mths of year 2016. If not, Mah's horse cannot run...lah!
rumours said min. salary may increase further to myr1500/month. this wage cost increase will affect many industries which rely on foreign workers. no wonder market turn cautious before the budget this Fri. Anyway, this is great news for consumer market which is down since GST last 2 years.
Immigrant labour working in plantations are generally piece-rated and based on CPO price.| As CPO price rises, harvesters earnings will increase accordingly..
Cepat 3q profit is lower due to decline in FFB volume. This is consistent with overall Sabah CPO production which has declined due to El Nino impact. 4q Ffb volume has recovered for Sabah so all will come back in 4q. Buy on dip. Target price at least RM1.30
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....
kk123
1,964 posts
Posted by kk123 > 2017-09-08 14:46 | Report Abuse
siapa mau cepat kaya ?