Ah Gark Gark giving tipsy!

I like!

Holland tipsy also you like? 

Beggers cannot be too choosy.



My new hobby now is collecting tipsy!

So you think 2nd liner palm oil got future or should sell already.. TDM has made me >20% to date...

There is a 13-15 cent dividend coming next month....

Err... I wouldn't have taken this bet. 

This is just me hor.
A personal choice and not to say this is a bad choice.

Like I said the other day, TDM did came across my radar.
I had 2 choices that day.
I chose to play Tebrau for a second time (sold already).

Ok point considered...

Tebrau 3rd round? 

Not yet....

I think there's just too many negative sentiments towards CPO.
Hence taking a bet on any CPO related stocks, is generally an uphill bet.
(Ah... sometimes despite the negative sentiments, there are some which would swim against the tide)

I am positive about TDM hospital thing but it's still way too early.

The last/previous time I looked at TDM was when it was 3.20.
I wanted much lower if I was going to take a long term trade on it.

We buy when the sentiments are the weakest....

Buy when everyone else throw...if CPO drop to < 2k/ton, i will sapu all the plantations. 

This idea is not bad but the plantation stocks generally did not fall as much as the CPO prices.
Despite the weak sentiments, I felt the prices weren't that 'cheap'.

It depends which plantation, major plantation prices has not budged much. So I will give these a miss as I cannot capture the low CPO price factor. All the big plantation are priced as if the CPO will rebound to 3k/ton shortly, also their trees are more or less matured.. 

Smaller plantations and those listed on SGX fall in tandem with CPO... those are my target. Especially those with young plantations which has not fruited yet, hence will give higher revenue (from increased fruit production) in the coming years.

But that is juts me, not suitable for those without holding power. Might take years ...

Imho there are two ways to play plantation. One is via the cpo price increase, another in increasing cpo production. Even if cpo stays flat, the increase cpo production will increase eps as long there is still margin. I am going for the latter. Young trees and plenty if reserve land is what i see.

Wilmar is doing very well on thier lauric division, but they are suffering from over capacity in soy bean crushing in china. Also fertilizer margin is extremely low at less than 1%. This does not only affects wikmar but other similar company like golden agri. Also wilmar is building so much new refining capacity in 2013, where they are going to get enough cpo? Already now wilmar consume 30% of cpo produced in indon. Expect the figure to raise to 40% soon. Insider info says thier refinery not running to capacity due to cpo shortage...

Not yet....

I think there's just too many negative sentiments towards CPO.
Hence taking a bet on any CPO related stocks, is generally an uphill bet.
(Ah... sometimes despite the negative sentiments, there are some which would swim against the tide)

I am positive about TDM hospital thing but it's still way too early.

The last/previous time I looked at TDM was when it was 3.20.
I wanted much lower if I was going to take a long term trade on it.

Not so agree on the production part. Especially with those minimium wages coming in. Average production cost per metric ton of palm oil easily hit RM 1300 per metric tonne. When cpo price fall below 2000. Margin are going to be quite thin.

As for wilmar, drop in commodities price are good for them as it bring better crushing margins to them.

Minimum wage in Indonesia the highest is 2.2 mil (RM 698) in Jakarta. In kalimantan/Sumatra the average is 1.4-1.6 mil (RM 476) per month. Most of the palm oil laborers already make >2.5 mil per month, so the minimum wage does not impact them. Also most of them are not employee. but contractual system ie. per kg harvested.

Concentrate on plantation in South Kalimantan or south Sumatra area, the volcanic soil is very fertile, yields per ha is about 23-25 tpha compared to Malaysian average of 19 tpha. OER is also higher at 23-25%, Malaysians will be lucky if we hit 21% oer. Estimated impact of labor rate is minimum <5% of cost. Some indonesian plnatation's cost is below 1k/ton.

The biggest worry is rise of diesel price which currently Rp 4,500 per liter expected to go up to 6,000 per liter, this will impact transportation costs. Yes if CPO falls below 2k, margin will be quite thin, but I am confident it will be temporary, why you ask?

There are currently 8-10 biodiesel refineries going to open up in Indonesia with capacity of 3 mil tons per annum. Since you are large shareholder of wilmar, check that they are building at least a few biodiesel plant.  This is due to the local government is committed to raise the % bio diesel in local diesel from 5% to 10%. Also since now CPO price is below crude oil price per ton, production of biodiesel is cheaper than importing diesel. Indonesia is net importer of diesel (mostly from singapore), and they have very limited self refining. In fact methanol (a component for biodiesel) suppliers in Indonesia has recently run out of capacity to supply.

Also Indonesia is one of the largest consumer of edible oil per person in SEA and this is growing at a healthy CAGR of 10% per annum. Refining capacity is going up like mushroom throughout Indonesia. Wilmar itself produce 10-15 million tons per annum, and is committed to raise this 25 mil tons per annum by FY14. Other group such as Smart, Musim Mas, Astro Agri, Lious Dreyfuss is also building new refineries. Sime Darby have a new 2,500 ton/day refinery up and running in south Kalimantan by mid 2013. There are many small players all expanding... in short we will soon face a CPO shortage in Indonesia but not necessary in Malaysia.

Anyway my insider view of this industry might be slightly   biased.. so don't take everything as it is... Everyday see CPO until blur already...

It depends which plantation, major plantation prices has not budged much. So I will give these a miss as I cannot capture the low CPO price factor. All the big plantation are priced as if the CPO will rebound to 3k/ton shortly, also their trees are more or less matured.. 

Smaller plantations and those listed on SGX fall in tandem with CPO... those are my target. Especially those with young plantations which has not fruited yet, hence will give higher revenue (from increased fruit production) in the coming years.

But that is justs me, not suitable for those without holding power. Might take years ...

Don't follow my holland tipsy..

Uncle gark, will Wilmar be one of your favourite long term holding for plantation? if not why? Hopefully can give some insight to us as you're insider in the industry   

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I tot u already sold all ur wilmar shares

Uncle gark, will Wilmar be one of your favourite long term holding for plantation? if not why? Hopefully can give some insight to us as you're insider in the industry