Aberdeen nibbling at Oriental shares
Written by Kamarul Azhar
Tuesday, 06 December 2011 11:14

PETALING JAYA: Aberdeen Asset Management plc has been slowly nibbling at shares of conglomerate Oriental Holdings Bhd and controls about 44.62 million shares or 7.19% equity interest in the company.

At end-March this year, the fund had about 38.1 million or 6.14% of Oriental shares. Aberdeen first surfaced as a substantial shareholder in September last year, with 31.08 million shares or 5.01% equity interest. At yesterday’s closing price of RM4.46, the block of shares it owns in Oriental is worth some RM198.99 million.

At the same time, the Employees Provident Fund (EPF) has been paring down its stake in the company.

In July 2010, EPF’s holdings in the company stood at 58.68 million shares or 9.46%, making the fund the company’s second-largest shareholder after Boon Siew Sdn Bhd, which has a 52.76% stake directly and indirectly.

As at Nov 30, EPF’s stake in Oriental stood at 44.25 million shares or a 7.13% stake.

“Oriental has about RM2.7 billion in cash and it only has loans and other short-term debts of around RM500 million. The group is basically sitting on a RM2.2 billion pile of cash, which makes it an attractive stock to buy,” an industry observer told The Edge Financial Daily.

The observer said the group’s net cash position could be the reason for investment funds to acquire its shares.

As at Sept 30, the group held cash and cash equivalents of RM2.8 billion while its total current liabilities amounted to RM896.48 million, of which RM540.45 million constituted loans and borrowings.

The group’s current assets stood at RM3.5 billion, out of RM6 billion of total assets. As at end-September, the company’s net tangible asset per share stood at RM6.98.

On top of its cash pile, the group has been consistently making profits. Profits for the past five financial years were well in excess of RM200 million, with the highest recorded at RM323.92 million in financial year 2007. The group registered RM249.59 million in net earnings for the financial year ended Dec 31, 2010.

For the nine-month period ended Sept 30, the group recorded RM179.73 million in net profit, up almost 44% from RM124.85 million in the same period last year.

According to Bharat Joshi, assistant investment manager at Aberdeen, as the group’s biggest value lies in its huge cash pile, Oriental’s assets are also undervalued.

He said some of these assets have not been revalued since the 1970s.

The group has diversified its earnings base from the traditional automotive distribution business under Boon Siew Honda company to oil palm plantation and property development.

“The group’s oil palm plantation business has been doing very well. It has close to 60,000ha in Indonesia and this segment has become the group’s anchor earnings contributor, overtaking the automotive distribution and autoparts manufacturing businesses,” said Joshi.

The plantation business contributed RM397.95 million or 16.5% of the group’s total revenue, lagging behind its automotive business with RM1.16 billion or 47.9% of the total.

However, in terms of profitability, the plantation division posted RM151.07 million or 47.8% of the group’s total profit before tax, outpacing the RM16.7 million recorded by its automotive business.

Oriental’s share price increased by 17 sen or 3.94% yesterday to end at RM4.48. Year-to-date, the stock has lost some 19.86% of its value.

“I think investors have started to appreciate that the stock has been undervalued,” said Joshi. “In uncertain times like this, cash is king. Investors might be banking on Oriental pulling off some interesting manoeuvres in the near future.”


This article appeared in The Edge Financial Daily, December 6, 2011.

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Added on December 8, 2011, 2:33 pmOriental’s share price rises 6.9%
Written by Kamarul Azhar
Wednesday, 07 December 2011 10:30

PETALING JAYA: The share price of Oriental Holdings Bhd shot up by 31 sen or 6.9%, making it the top gainer on Bursa Malaysia yesterday, and extended Monday’s rebound to RM4.79 from near year-to-date low of RM4.31 last Friday.

The stock has rallied by more than 8% since the beginning of this week.

Investors may have realised the underlying value of the stock, as the company is sitting on a huge pile of cash with most of its assets being undervalued, and some not revalued since the 1970s, according to Bharat Joshi, assistant investment manager at Aberdeen Asset Management Asia Ltd.

Aberdeen holds 44.63 million or 7.19% of the group’s shares as at Dec 6, up from 31.08 million shares or 5.01% it held in September last year.

“I think investors have started to appreciate that the stock has been undervalued. In uncertain times like this, cash is king. Investors might be banking on Oriental pulling off some interesting manoeuvres in the near future,” Joshi told The Edge Financial Daily on Monday.

As at end-September this year, Oriental’s net asset per share stood at RM6.98.

Investors might have taken the cue from Aberdeen which has been slowly increasing its stake in Oriental via the open market since emerging as a substantial shareholder in September last year.

While Aberdeen is raising its stake, another substantial shareholder — the Employees Provident Fund (EPF) — is paring down its holdings in Oriental.

The EPF currently holds 44.05 million or 7.1% of Oriental’s issued and paid-up share capital. This is down from the 58.68 million shares or 9.46% it held in July last year.

Joshi added that Oriental’s cash pile at end-September which stood at RM2.8 billion could be an essential buffer during uncertain times.

As at end-September, Oriental had short-term debt commitments of RM896.48 million while its long-term borrowings amounted to RM34.93 million.

Joshi commended the company’s expansion of its oil palm business especially in Indonesia, where it has 60,000ha, as this segment has become the group’s anchor earnings contributor, overtaking the automotive distribution and auto parts manufacturing operations.


This article appeared in The Edge Financial Daily, December 7, 2011.

This post has been edited by GregPG01: Dec 8 2011, 02:33 PM

EPF raises stake in Oriental Holdings
Written by Kamarul Azhar
Tuesday, 15 May 2012 13:50

PETALING JAYA: The Employees Provident Fund (EPF) increased its shareholding in Oriental Holdings Bhd (OHB) to 9.26% as at May 11 from its lowest holding level of 6.29% on March 14, according to filings with Bursa Malaysia.

The EPF had held an 8.86% stake in OHB as at May last year, but pared it down to 6.29% as at March 14. However, the EPF began buying OHB shares over the last two months amid the latter’s surging share price.

The retirement fund is currently the second largest shareholder in OHB after the Loh family, which owns over 55.28% equity interest.

An official from the EPF declined to comment, except to say that the confidence the EPF had in OHB must be the reason why the fund had been buying the company’s shares of late.

“We are not going to buy any stock in companies that have not been performing well, right?” he said.

EPF is currently the second largest shareholder in OHB after the Loh family.

The market value of the EPF’s shareholding in OHB was RM387.6 million as at May 5, when the share price hit a 52-week high of RM6.80.

Other substantial shareholders in OHB include Aberdeen Asset Management Sdn Bhd (AAM), a unit of Aberdeen Asset Management plc, which holds a 7.8% stake.

AAM is interested in OHB’s cash reserve, said Bharat Joshi, an assistant investment manager at the asset management company.

“In uncertain times like this, cash is king. I think investors might be banking on OHB pulling off some interesting manoeuvres in the near future,” said Joshi.

As at Dec 31, 2011, OHB’s cash and near cash items stood at RM2.89 billion, up from RM2.6 billion in 2010. Its shareholders’ fund stood at RM4.4 billion in the same period, up from RM4.13 billion in the previous financial year.

OHB’s strong balance sheet has enabled it to embark on major acquisitions, such as its purchase of hotel assets in London worth over RM200 million.

The group has also posted stronger earnings in recent years due to its aggressive foray into oil palm plantations in Indonesia.

OHB’s net profit stood at RM270.16 million in FY11 ended Dec 31, which was an 8.24% increase over the RM249.59 million recorded in the previous financial year.


This article appeared in The Edge Financial Daily, May 15, 2012

research paper from cimb. bookmark here for future reference. .

Pearl of the Orient
Having re-invented itself over the past two decades, Oriental Holdings
is making a strong comeback as a diversified conglomerate grounded
in plantations, autos and real estate and supported by a balance sheet
that is rich in cash and assets

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Added on August 4, 2012, 10:56 pmValuing the overseas assets
Oriental was way ahead of the curve in investing overseas before it
became a major investment theme for Malaysian corporates. We have
revalued its overseas real estate assets, which were mostly acquired
during the early 1990s, to increase our RNAV by 10%.

This post has been edited by GregPG01: Aug 4 2012, 10:56 PM


Attached File(s)
 Orient_by_CIMB.pdf ( 820.17k ) Number of downloads: 41

Cool

This post has been edited by GregPG01: Aug 14 2012, 07:53 AM


Attached File(s)
 oriental__cimb_.pdf ( 570.22k ) Number of downloads: 14

<title>Hot Stock - Oriental rises on privatisation talk, share purchase by owner</title>

KUALA LUMPUR (Dec 4): The share of ORIENTAL HOLDINGS BHD [], controlled by the family of the late tycoon Tan Sri Loh Boon Siew, has been rising sharply since last Friday (Nov 30) on talk that it could be privatised by the Loh family.

The near year-round purchases made by the Loh family's Boon Siew Sdn Bhd and last six months of share acquisitions by two foreign substantial shareholders — Aberdeen International Fund Managers Ltd and Mitsubishi UFJ Financial Group (MUFG) have also driven share prices up.

"Oriental's share price surge on Friday could be a precursor to a major development - a privatisation. The Loh family & Aberdeen have been buying. The action by the former is significant," said a banker.

At 3.59pm, Oriental share rose 11 sen or 1.3% to RM8.28 on volume of 97,000 shares. Earlier in the day, it hit a new-year high of RM8.34.

Yesterday, it fell to RM8.18 on profit taking after surging 30 sen to 52-week high of RM8.30 on Friday with 2.54 million shares on that day.

According to Bursa Malaysia records, the Loh family represented by director Loh Kian Chong and Boon Siew Sdn Bhd has been purchasing the stock since February this year.
The latest purchase was seen on Nov 22, when Boon Siew's direct stake was raised to 43% and Loh Kian Chong's deemed (direct and indirect) interest was raised to 55.93% after one million shares were acquired at RM7.983 per unit.

Meanwhile, Aberdeen and MUFG as well as local pension fund Employee Privident Fund (EPF) have also been actively acquiring the share in the open market in recent months, according to Oriental's filings with Bursa Malaysia.

On Nov 29, Aberdeen acquired 299,000 shares from the open market after buying one million on Nov 23. These recent purchases raised its stake in Oriental to 6.69% on Nov 29.

On Nov 28, MUFG acquired 30,900 shares from the market after buying one million on Nov 23, thus raising its stake to 8.6% on Nov 28.

While EPF was not consistent in its market operation as it was also seen selling at times, its last purchase of Oriental shares was on Nov 26 and Nov 28, after selling one million shares on Nov 23.

From early February's RM5.30, Oriental has risen to over RM8.30 today. This means that over the past 10 months, the stock price has gone up by 57%.