1.  CHGS is to fund the Management Company(MC) in their project of a 10,000 acre oil palm plantation.  For each plot of RM5.5k fee, 29% is set aside to give us the initial returns of 8%x3yrs and 5% kept as Reserve funds with the Trustee.  MC gets to use about RM3.5k after marketing costs.  If all 28000 plots are sold, MC will have about RM 100 million funds to develop this 10,000 acre project.

MC accounts as at Feb-2007 showed they have already put in around RM20 million including land development costs of over RM15 million.  The RM100 million from CHGS will be used to buy more seedlings, planting and fertilizers costs, labours , maintenance, re-planting, etc...  Hence a fully operating plantation with productive trees would fetch good value even after 20 years.  This Gua Musang land lease would likely remain as plantation land for its whole leasehold term.



michael

One question,
If the palm oil tree fails to grow enough then there would be no profit, then how the company going to pay the return to the scheme holders?
Yes, it depends on the CPO price but it also depends on the plantation yielding aka fruits grows. In term of any natural disaster like flooding etc, then no profit then how company going to pay the return? Insurance enough to cover?  Don't think insurance company want to make losing business as well.

Participant in trust is like owning it and whether to get the return or not, it depends on the profitability of it, just like Reit.

Owning the trust is not exactly like owning a land, just similarity, as same as reit also. Owning a land, you got the land title, you can opt to sell or do whatever you want whenever you wish. But in this trsut scheme, investors basically are tight for 23 years period, unless another person willing to take up the trust or buying from you. Actual landbank or owning a land is much easier to sell than owning a trust espeically the trust is not listed. If listed, then it would be a good plantation trust, as it resolve the main issue, liquidation part.

It is just a leasehold for 23 years?

Don't get me wrong. Not mean to discredit this scheme, instead personally view it is an ok investment target. Just want to highlight some disadvantage besides its pros so that discussion in it will only make a claerer picture and only benefit to all.

Also, 'guess' term is not good enough, it involves hard earned money in stake, every fact in it must be known properly, can't second guessing of it. This scheme already running one, we should able to find out the actual fact of it.

cheers.

Oh, i just saw that the price will increase to RM6000. Is it only effective after 11th March?

Dreamer,

The 8% is based on 6K.