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Oriental Holdings Berhad – What if You had Bought and Held?

I happened to be reading the Annual Report of Oriental Holdings Berhad (ORIENT) the other day and came across a statement by Chairman Dato Loh Cheng Yean:

“A holding of 1,000 stocks in Oriental when it was listed in 1964 would translate into 40,255 Oriental stocks worth RM263,670, based on the share price of RM6.55 at the end of 2007. In addition the stocks would have earned a total gross dividend of RM137,660. The gross dividends received and the appreciation in value is equivalent to a remarkable average rate of return of 14.60% for each of the 44 years.”

This sounds pretty good… see once again we’re talking 40 years. I find Oriental Holdings to be quite “remarkable” because it is such a diverse collection of different businesses which include auto assembly, auto parts manufacturing, oil palm, hotels, property etc. But 85% of its RM498 million Operating Profit is from auto and oil palm.

Source

Oriental privatisation target?
By DANIEL KHOO
danielkhoo@thestar.com.my

KUALA LUMPUR: Oriental Holdings Bhd, which had seen its share price jump by as much as 16.5% in the past week, could be the next privatisation target.

Sources said this followed several announcements of corporate moves which would probably be a prelude for greater things to come.

“This will always catch the market by surprise. The buying of the Kingsley Hotel for about RM202mil is definitely a pointer to bigger things to come for Oriental,” a source said.

It is learnt that Oriental's single majority shareholder, Boon Siew Sdn Bhd, may decide to privatise the company to strengthen its position as part of efforts to regionalise the company.

Boon Siew Sdn Bhd, founded by the late Tan Sri Loh Boon Siew, has a 43% stake in the company. Today, it is controlled by Loh's family, which is said to be also undergoing a leadership transition very soon.


The word is out that their grandsons will take over the helm of the company within this year or next.

It is also understood that the company is in talks to purchase more land for its plantation ventures in Indonesia while the major shareholder also has big plans to purchase some parcels of land in Britain and the United States.

“They want to shore up their presence in the Western economies. But before this, they want to ensure the company is firmly in the Loh's family control.'' said another source.

Oriental, which had surged by 90 sen or 16.5% in the past trading week, could garner more interest once these leadership handover plans are firmly in place.

Market observers also point out that the share price decline by 27 sen on Friday could be a knee-jerk reaction to the lower year-on-year quarterly net profit, which was announced on Thursday.

Oriental recently announced that its year-on-year net profit for the fourth quarter ended Dec 31, 2011 declined by 12.8% to RM108.77mil on the back of a 15% drop in revenue to RM718.55mil.

However, for the full financial year 2011, Oriental saw its year-on-year net profit rising by 15.6% to RM288.5mil on a slight decline in revenue from RM3.23bil in FY2010 to RM3.1.3bil.

In notes accompanying its financial statements, Oriental said the lower revenue was due to inventory shortages in its automotive business segment, which was one of the main contributors to earnings.

However, profits rose because it was able to sell some of the existing models slightly higher than its carrying value.

Oriental recent high at 6.80

Lately pullback is a great opportunity to collect, currently trading at 6.40

The hidden gem is being noticed

東方實業加速拓展

熱股評析 2012-08-06 19:01
（吉隆坡6日訊）東方實業（ORIENT，4006，主板消費品組）手持25億令吉現金，未來數年料加速拓展海外種植和酒店業務，加上旗下海外資產價值或遭低估，前景可期。

該公司自1991年開始投資海外種植和酒店資產，許多資產皆是在97年亞洲金融風暴前買下，導致實際價值遭低估。根據分析員重新評估結果，該公司海外資產價值約15億令吉，但淨有形資產卻只有7億2千600萬令吉，顯示價值有龐大上揚空間。

為反映海外資產重估，分析員上調每股重估淨資產值（RNAV）1令吉10仙，至每股12令吉52仙。

儘管該公司領導層變動導致海外併購活動一度沉寂，但根據管理層最新指引，公司將動用其充裕現金，尋求海外種植和酒店資產併購機會，包括把種植地擴大至160公頃，該公司今年2月在倫敦收購酒店也顯示歐債危機帶來投資機會。

另外，相信該公司接下來可能進一步擴大保健資產規模，建立強穩長期資產組合，而且就該公司目前股價來說，種植和汽車業務價值完全未反映在股價上，股票價值明顯被低估。

主評：聯昌研究
評級：超越大市
目標價：10令吉↑（星洲日報／財經