Dividend yield is 3.3%... not much difference form Nestle Malaysia's dividend.

Apa stock code itu?

No did not buy leh...

Chart I no expert to comment.. that one i leave it to you.

Fundamentals ...

Last few quarters JTiasa is not doing very well, revenue is about the same, profit is almost none in Q3. Margins has fallen to 2.2%. Overall the CURRENT profit picture is not good. But overall profit for FY13 is pretty bad at 2-2.5 cents per share.

But for the future trend in which KKY is arguing on lets see...

Jtiasa's Bussiness is 35% plywood, 37% logs and 12% CPO

Average CPO selling price in FY12 is 3,151, FY 13 is 2,177. This is a big profit drop causing the CPO margins to deteriorate from 43% to 7%.

Average plywood & Log selling price in FY12 is 1,950&480, FY13 1,775&571. Margins for wood products dropped form 9% to 4%.

Plywood & logging business is sunset. KKY is talking about the palm oil business so let us analyze.

It has a palm oil plant able reserve land of 70.9k ha. Total planted is 62k, matured is 48k. Reserve land for planting is very limited, hence limiting future growth.
Age <4 years is 26.3%
Age 4-7 years is 61.8%
Age >8 years is 11.9%

Growth rate of FFB production is estimated to be raised from 700k in FY 13 to 900k in FY14.

Current yields are very poor at 15 ton/ha and OER of 14.13% is downright pathetic. No wonder Jtiasa cannot make much money with it's palm oil plantation, due to it's poor CPO productivity rate. Good plantation companies should be achieve yield of at least 21-23 tpha and oer of 22-23%.

Jtiasa is expecting it's palm oil to hit yield of 27 tpha when fully matured, but I know the soil in Sarawak is Peat Soil and NO company can achieve more than 18-20 tpha.

Lets say next year their palm oil did go up from 700k FFB to 900k FFB (yield increase from 15tph to 17tph). Assuming thier OER increased slightly to 15% & selling price higher at 2,200.

Estimated total gross sale will be 900,000t x 0.15 x 2200 = 297 million
lets say margin improve now to 10% total PAT will be 29.7 million
Wood business remains challenging so margin same PAT = 32 million which is not significant.

FY14EPS will be about 3-3.5 sen unless palm oil prices improve back to >3k I don't see how the business can justify such high price for stock even with future growth built in.

Psst, there are palm oil plantation with super growth, OER of 22.5%, yield of 24tpha in good volcanic soil selling at PE 12x. Isn't that a better deal?

This post has been edited by gark: Jul 27 2013, 11:45 AM

Maybe I should post the reply to KKY directly at Dali, but scared afterwards get shoot upside down....

Download the 3q report and from the 3q investor presentation also from the 2012 annual report. Info all there, just have to put it together and analyze.

Oer is oil extraction rate, which the percentage of cpo weight that can be obtained from ffb. You get 150kg of cpo from 1 ton ffb, then your oer is 15%.

Yup... that's why I say plywood is a sunset business. At best case, profits will just remain stable. Anyway whatever to be repaired after tsunami, has already been repaired.

Also he say Jtiasa total book value of it's land is RM 44k per ha, he expect it can fetch 100k per ha. Deep jungle land in Sarawak? Don't think so. Even land in East coast Palm oil estate also selling at 35-50k/ha. Perak estates are about 80k-100k.

But I found a hidden gem in Jtiasa's that KKY never did mention after further digging into it's records. Jtiasa has the largest forest plantation in Malaysia something like 235k ha. Only about 30k ha is planted due to poor sales of plywood business in which not so much wood required hence 70% of the land is left idle after logging. Now if Jtiasa CAN convert those from forest plantation to palm oil estate, then we really have a hidden gem here as they will be one of the largest palm oil estates in Sarawak. Can they do that? According to law they cannot, as they have to 'manage' the forest for rehab after logging, but being Malaysia anything can happen. By the way these forest plantation/rehab land is concession and land cost is FOC

Why KKY never mention this point? Is it not do-able?

This post has been edited by gark: Jul 29 2013, 10:28 AM

No wor.. only drop RM 9 from 2183 to 2174...

Probally someone panic now psychologically below 2200.

Time to pick some juicy plantations... especially those CPO cost below RM 1500 ones... still got good margin, shake out all the weak players:hehe:

Probally this news kua...



This post has been edited by gark: Jul 29 2013, 02:47 PM

They don't discriminate only they don't use it... whats the difference? These from the same people which raised the nutella tax.

CPO need this plunge, too many people planting expecting green gold. Good to shake out the weaker players, and the the price bottom up and set it up nicely for a bull run later. Hope the price drop below RM 1,500 / ton.. a lot of people gonna give away their palm fruit for free.

This post has been edited by gark: Jul 29 2013, 02:54 PM

Here we go again roller coaster... dead cat bouncing, now going down.

All my current holdings is blood RED today...

This post has been edited by gark: Jul 29 2013, 03:01 PM

Sure go down ler.. all CPO go down, in short term all profit will get hit. But I see a longer picture on the maturing palm oil, which will translate to higher earning, but a couple years down the road.

Not for the faint hearted...

This post has been edited by gark: Jul 29 2013, 03:13 PM

Probably.. it did so previously. Max down i think will be RM 1,600-1,800/ton, lower than that a lot of plantation will not want to harvest, and let the fruit rot on tree. When this happens like in 2008/2009 the bounce back is extremely fast.

Plantation companies are not all efficient, when the price is high all tom d*** and harry also can make money. Looking at yield/ha and OER, low cost producers total costs are about RM 1,200-1,500 /ton CPO. Medium Cost producers are RM 1,500-1,800/ton CPO. Higher cost producers are about RM 1,800-2,200/ton.

Trick is look for :-

1. Low average tree age of 5-8 years
2. Significant plantable reserves
3. Lowest EV per ha plantation
4. High yield per Ha (min 18 t/ha)
5. High OER (Min 20%)

TDM bought and sold already recently.. 60% profit. Not recommend to buy back at these prices.

Wah you so geng. Others all bleeding red ink hahaha.

Rubber.......gloves. 100% export to USA...

Blame it on N*jib spending money like water nowdays.


This post has been edited by gark: Jul 30 2013, 07:52 PM

Palm oil trades in RM leh....MPOB price.

4% bond yield... as previously predicted. REIT have to yield 5.5% to compensate now...

Lucky I am in 85% cash now, thanks you pong sway chart.

Hope tomorrow really bloodbath..

This post has been edited by gark: Jul 30 2013, 08:07 PM

Quite bloody also lar.. nearly down 20 points liao.

Boon3 any target?

This post has been edited by gark: Jul 31 2013, 10:23 AM