Cannot simply follow.. later go to holland..

Must understand why the stock got potential..

And also what are the risks...

This post has been edited by gark: Oct 1 2015, 07:47 PM

dont follow gark, he always masuk hutan 1

Yayaya dont follow... free trip to hollland to see windmill...

Haha was briefly looking at it ystrday. Noticed a decline last q but have not really figured out why. Need to figure out what is the composition of their mills and plantation segments also

The company you work at. Kan construction.

Busy like hell...

Come here to talk c0ck release stress

Lower profits is due to lower cpo selling price and less SPV orders. Also thier tax incentive have recently expired, they are planning to renew it via a newly patented zero discharge mill. For their mill business, they are stilll doing good with order book to last them through 2016.

Malam malam busy apa? If wan to release go find your viet amois la..

Busy at office hours lar...now gym-ing

Observation
1. Plantation business contribution to bottom line is almost negligible
2. Currently trading at PE12, which i think is above fair PE based on history
3. Current orderbook amount is close to FY14 total revenue

Pros
1. USD effect - 40% of orderbook is in USD. 2014AR mentioned that 5% increase in USD will increase profit by 2mil

Cons
1. SPV orders decreasing. In fact SPV decrease is offsetting increase in revenue for mills.
2. No more tax incentive. Predicted to be renewed by end FY15.

Questions
1. How does CPO prices affect their revenue for mills?

Overall I think there isn't a strong catalyst for CBIP haha. First res might be better hehe, but flying already. no time to study and buy

This post has been edited by cooldownguy86: Oct 1 2015, 10:48 PM

On mobile so give you a quick answer.

Plantation not making money now due to poor cpo price, with higher price will start to contribute to bottom line. Plantation asset in indon is still very young, like average 5 yo if not mistaken, so still producing low yield fruits.

History of SPV is lumpy, depending on contracts from government. Also due to recent low price of steel, margin expansion for mill works will be seen down the line. So far in 2015 obtained 200 mil order book for mill, expect to increase to 400 mil by end year.

Higher cpo price will allow plantation to move to higher margin cpo production rather than selling ffb.

Anyway good analysis there, agree that there are limited upside. Yes first res is recommended, their average tree age is 9 yo, just entering peak yield, a good sweetspot.

This post has been edited by gark: Oct 1 2015, 11:51 PM

Thanks abg gark. seems like abg boon de wood still hotter haha.

Not sure how does yield affects profit, but let me try First Res:

Neutral
El Nino - apparently strongest since 97-98 - drives CPO prices but reduces production

Pros
10% yearly production growth
Mostly young plantations which will likely recover from El Nino faster
Stronger CPO prices both due to El Nino and weak ringgit
Weaker IDR. Based on AR, every 10% increase in USD/IDR increase PBT by 7mil

Fair Value
1. Since net profit mainly contributed by CPO so ignore FFB and refinery
2. 1Q & 2Q sales 100m, cost 70m, profit 30m per Q
3. Historically 2H production is about 1.4 of 1H - 140m, cost 98m, profit 42m per Q
4. CPO price increased from RM2k to RM2.4k per ton - 20% increase which will directly increase 4Q sales by 20%
5. Assume CPO prices remains at RM2.4k throughout end of the year. Offsetting further increase in CPO prices with lower 4Q production due to El NiNo

So FY15 profit estimate = 1H Profit + Q3 Profit * 1.4 + (Q4 sales * CPO increase - Q4 Cost) * 1.4
= 30 + 30 + 30 * 1.4 + (100*1.2 - 70)*1.4 = 172m
i.e. EPS USD 11.3cents or SGD 15.8cents. Assuming PE11, fair value is SGD $1.70

FY16 profit estimate = (FY15 estimated sales * CPO increase - FY15 Estimated Cost) * Growth
= (480 * 1.2 - 336) * 1.1 = 264m i.e. EPS SGD 24cents. Assuming PE11, fair value is SGD $2.60 (CPO at 2.4k)
= (480 * 1.1 - 336) * 1.1 = 211m i.e. EPS SGD 19.5cents. Assuming PE11, fair value is SGD $2.15 (CPO at 2.2k)

Current price already $1.70. So questions is whether CPO price can average at RM2.4k entire FY16?

This post has been edited by cooldownguy86: Oct 3 2015, 09:54 PM

If the price of cpo increase by 20%, the profit increase much much more than that at exponential rate.

Example company A cost of production cpo is rm 1800, sell at rm 2000, profit is rm 200

Later the same product at the same cost now sells at rm 2,400 (20% increase) profit will be rm 600, which is 300% increase.

Also during el nino, total fruits will be less instead of increase.

That is why price of plantation jumps during high cpo price.

$2.30 sounds like a good fair value.

This post has been edited by gark: Oct 2 2015, 12:27 AM

Haha thanks abg gark. I go correct my calculations tmr. Btw Kenanga say 2.2-2.4k for 2016 shld be possible. Hehe now I'm more convinced at this moi is really indeed a moi haha

Wow bro, i know next to nothing on fa, or what your detailed analysis is called.
But your observation and analysis and the time you spend on this homework, i respect and admire. Aspire to be like you

Placing your buy at 1.90?

Bought long long time ago... still keeping.

You no take profit

You know me lah... long term..

Ooooo CPO counters in IDX just beginning to zoom today.. got lagtime.