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 Plantation Counters, Which is your first pick?

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TSpanasonic88
post Jan 18 2008, 10:16 AM

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crude oil price dropped to US$89.70 per barrel

can pay attention on BSTEAD if price is coming down to 6.00 and below

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ntick
post Jan 18 2008, 05:02 PM

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skiddtrader
post Jan 31 2008, 11:38 PM

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I've taken a recent interest in plantation stocks like IOIcorp, Asiatic etc. The CPO prices have proven it can hold it's own after a while and price of crude oil aren't going to drop anytime soon. This will mean, at least for me that the plantations stocks that has high yield will make a killing in 1st 2 quarters of 2008. What do you guys think
Jordy
post Jan 31 2008, 11:49 PM

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QUOTE(skiddtrader @ Jan 31 2008, 11:38 PM)
I've taken a recent interest in plantation stocks like IOIcorp, Asiatic etc. The CPO prices have proven it can hold it's own after a while and price of crude oil aren't going to drop anytime soon. This will mean, at least for me that the plantations stocks that has high yield will make a killing in 1st 2 quarters of 2008. What do you guys think
*
Plantation stocks are a bit risky now, as many were expecting the CPO price for this year to stabilise around RM2,500, which is quite far down from where it is now.
If this does happen, we should see some selldown on plantation counters. I would opt to wait and see on this, since I believe the CPO price was mainly speculated by hedge funds at the moment.
cherroy
post Feb 1 2008, 09:54 AM

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QUOTE(skiddtrader @ Jan 31 2008, 11:38 PM)
I've taken a recent interest in plantation stocks like IOIcorp, Asiatic etc. The CPO prices have proven it can hold it's own after a while and price of crude oil aren't going to drop anytime soon. This will mean, at least for me that the plantations stocks that has high yield will make a killing in 1st 2 quarters of 2008. What do you guys think
*
CPO might able to hold at Rm3k above for near term, but over long term, jury still out there. Most big players in the market like IOI & KLK are forecasting at 2.8k level only. They also see current CPO price is high.

Economy cycle is like that when a product is having high profit margin then lot of people will start to look on it and invest on it. Although near term, it won't have an effect as supply need time to built up but after several years (Plam oil tree needs time to grow same as crude oil, you need time to build up oil rig), the more supply will neturalise the high price. An industry won't have too high profit margin for too long time (2-5 years period may be but not more than 5 years), as more and more players will come to 'join' into it if it is very profitable which eventually push down the profit margin.

Just like crude oil, one of the reason (besides increase demand from China) it shoot so high is because of too curde price back 2000-2001 whereby oil price traded at teen number only as low as USD 15 (can't remember correct the exact figure and years, around that). At that time, crude is so cheap that prompt to oil producing countries ro reduce supply and nobody want to build oil rig or start oil exploration project. But after several years, when economy recover and growing, demand pick up pace is so fast that there is no extra supply to meet up those demand. As due to low price of crude years ago, less people start new oil field so supply scrumbble to meet up demand.

Plantation stocks do trade at high valuation right now. May be buy on dip, otherwise currently it seems their valuation is a bit rich.

I might be wrong, just my view.

This post has been edited by cherroy: Feb 1 2008, 09:54 AM
SKY 1809
post Feb 1 2008, 06:48 PM

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2nd OPINION

The way I see it.

I am surprised to read People are talking and seeing Plantations as Oil Palm and Oil Palm as Plantations. Price of palm oil is main topic discussed here.


I do agree the prices of plantation shares are quite high.

There are many potentials or hidden values of plantations not discussed here such as :-

> People see land only as what is on the surface, that is all. What are the potentials of land are also important ( such as converting to commercial lands. ). Where are their locations ?

i.e IOI PROP/UEP / Bandar Utama/PJ build houses originated from plantation lands.

> Companies such as Asiatic/Sime etc are also property developers closed to JB and Iskandar Project. Commercial properties have more values than land itself. For example. Mid Valley and Pavilion. If let say, they want to build a mini Disneyland on the land, then the impact will be greater and price of shares shoot up.

> See how the accountants keeping their accounts for these companies, you will very be surprised. They do not see the needs to revalue the lands., let say book values at RM 30,000 per acre, ok kah next to JB ? Accounting practice says they have to value at low agriculture land price even zoned for commercial use, unless conversion and revaluation is done

> Do they have cash piles ? Any borrowings ( esp old plantations ). D/E ratio of 0.1 ? Some of them are cash kings.

> Will they collapse if share market slumps. IOI is the one to recover first when market recovers ( yardstick)

> China/India markets. Do they stop using palm oil tomorrow. More consumer spending power expected.

> any oil mills in China or India

> Bio fuel potential ? Vitamins etc.

> in time like this, one of the best place for fund managers to park their money is here.

> If you discuss what is in the financial reports, you will tend to think like an accountant .

> I see plantations as 5 in one shampoo for the hidden values. How to unEarth their hidden values are more important beside the price of palm oil. It is truly worth the effort.

> See them as Golden Gooses rather only the price of eggs they produce.

Sorry to flame you, mate.

This post has been edited by SKY 1809: Feb 2 2008, 10:53 AM
TopGunn
post Feb 2 2008, 01:10 AM

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QUOTE(SKY 1809 @ Feb 1 2008, 06:48 PM)
2nd OPINION

The way I see it.

I am surprised to read  People are talking and seeing Plantations as Oil Palm and Oil Palm as Plantations.  Price of palm oil is man topic discussed here.
I do agree the prices of plantation shares are quite high.

There are many potential or hidden values of plantations not discussed here such as :-

> People see only land as what is  on the surface, that is all. What are the potentials of land are  also important ( such as converting to commercial lands. ). Where are their locations ?

i.e IOI PROP/UEP / Bandar Utama/PJ  build houses originated from plantation lands.

> Cos such as Asiatic is also a property developer closed to JB and Iskandar.

> See how the accountants keeping  their accounts for these companies, you will very be surprised. They do not see the needs to revalue the lands., let say book values at RM 30,000 per acre, ok kah  next to JB ?

>  Do they have cash piles ? Any borrowings ( old plantations ). D/E ratio of 0.1 ?

> Will they collapse if share market slumps.

> China/India markets. Do they stop using palm oil  tomorrow.

> any oil mills in China or India

> Bio fuel potential ?

> in time like this, one of the best place for fund managers to park their money is here.

> If you discuss what is in the financial reports, you will tend to think like an accountant .

I see plantations as 5 in one shampoo for the hidden values.
*
So i suggust those people/investers interest in plantation share, better study & research the company profile such as plantation properties, where their land/fields palm oil & rubber. Don't be surprise, their share price will shoot up after some announcement by government on development.
I'm eyeing plantation counters that has estates tht will be develop by gov later...Success example..putrajaya, cyberjaya-land own by IOI early i think and early last year in kuantan own by AASIA.
cherroy
post Feb 2 2008, 09:34 AM

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QUOTE(TopGunn @ Feb 2 2008, 01:10 AM)
So i suggust those people/investers interest in plantation share, better study & research the company profile such as plantation properties, where their land/fields palm oil & rubber. Don't be surprise, their share price will shoot up after some announcement by government on development.
I'm eyeing plantation counters that has estates tht will be develop by gov later...Success example..putrajaya, cyberjaya-land own by IOI early i think and early last year in kuantan own by AASIA.
*
No doubt about those hidden value, and under-valuation land banks they have especially for the like KLK (some their land banks valuation are still based on old valuation which has increased tremendously over the years).

But still personally think that the potential hidden value should treat it as bonuses. What matter most is their daily operation businesses that generate steady profit and cashflow to the company and its shareholders. Anyway, just my view on the priority side of the various factors to consider when look into the company stocks. Yes, I fully agree there are some hidden value on it (on those land banks).

There are plenty of plantation company has venture into large landbanks in Indonesia currently as Peninsular landbanks become more and more expensive.
SKY 1809
post Feb 2 2008, 11:05 AM

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A Value Investing Investor would consider the hidden values ( Value Investing Approach used by Buffet ), using this approach, he rates Asiatic at RM 1.50 as good buy and could have bought it years ago . He may see Potentials for palm oil price to go up too because big markets like China and India.

If you wait for hidden values to surface , then you may buy RM 6.00 for Asiatic, is also a good buy. I am sure people buy Pbank not because the interest rates are good throughout the years. In fact, Public Bank interest rates are the most competitive ones. The hidden values also play apart. One thing I respect Public Bank most is their ability to lend to "China man" without proper or complete documents, and yet their NPL is the lowest. They make efforts to know their customers' backgrounds, whereas other banks do not. I call this a hidden value. Some say this is an extra bonus.

In order for Singapore to successfully build their casinos, they need one important thing called "SAND" , which is hidden beneath Malaysian Plantations, waiting to be explored.

Just Different schools of thoughts. It is not wrong and not right method. I am also learning good things from you all. cool.gif

The reason why i brought it out cos earlier discussions centered on Oil Price issue. Investors would see more values if they want to consider other factors as well. You may see these as extra bonus but I see them as " under valued" investments.

And let say by mistake, you bought these " undervalued " stocks, you still have a good chance to recover your losses in future, they would not disappear like some of the second board companies.

Once again, investors here want to invest in long term but taking a short term view.

This post has been edited by SKY 1809: Feb 4 2008, 05:49 PM
chinkw1
post Feb 4 2008, 04:42 PM

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Anyone buying plantation counters recently??
TSpanasonic88
post Feb 4 2008, 04:44 PM

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QUOTE(chinkw1 @ Feb 4 2008, 04:42 PM)
Anyone buying plantation counters recently??
*
wave.gif me! waiting for a right timing
smartly
post Feb 4 2008, 05:07 PM

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try ioicorp, maybe can hit n run...if can't then keep for longterm also won't hurt much...CPO is so high now..somemore this year is plantation stock play...
SUSDavid83
post Feb 5 2008, 08:08 AM

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Strong performance by smaller palm oil firms

PETALING JAYA: Shares in smaller sized palm oil firms soared yesterday led by Glenealy Plantations (M) Bhd and Chin Teck Plantations Bhd, as both companies reported strong profit growth on the back of rising crude palm oil (CPO) prices.

While these companies are deemed less attractive to large investors when compared with bigger planters like IOI Corp Bhd or Kuala Lumpur Kepong Bhd due to the lack of trading liquidity, their low price-to-earnings (PE) multiples and above average dividend yields make them good defensive buys, especially at times of stock market volatility.

"These companies are equally well managed and their earnings outlook are equally promising,'' a local fund manager said.

Glenealy reported a net profit of RM49.2mil, or 37.6 sen per share, on revenue of RM62.9mil. This includes a one-time gain of RM21.6mil.

Miri-based planter Glenealy told Bursa Malaysia that the company achieved an average selling price of RM2,845 per tonne during the three months ended Dec 31, against RM2,574 per tonne achieved in the preceding quarter.

The average price secured during the period mirrored the benchmark CPO futures contract performance on Bursa Derivatives.

With the CPO futures traded consistently above RM3,000 per tonne levels since the start of the year, it is likely that plantation companies would continue to enjoy strong earnings growth going forward.

The benchmark third month futures contract was up RM113 to RM3,345 per tonne yesterday.

Shares in Glenealy rose 44 sen, or 9.8%, to close at RM4.94, which values the company at 7.2 times its historical earnings based on the trailing 12-month earnings per share (EPS) of 68.1 sen.

Assuming that Glenealy would be able to meet market forecast of 90.1 sen per share for year ending June 30, 2008 (FY08), its market valuation is even more attractive at these levels.

It is worth to note that yesterday's most actively traded stock IOI Corp was valued at 25 times its projected earnings.

Meanwhile, Glenealy's share price jump also provided some support to its parent company Lingui Development Bhd, which owns a 36% stake in the company.

The timber firm's net profit was down 57% to RM32.6mil, or 4.94 sen per share, during the quarter ended Dec 31, 2007 due to the drop in prices for plywood and veneer.

Lingui share price was up 3 sen to RM1.48. It hit a two-year low of RM1.41 on Jan 22.

Chin Teck climbed 40 sen, or 5.4%, to RM7.85 with 84,600 shares traded.

Like Glenealy, Chin Teck posted a sharp increase in net profit, up 152% to RM19.4mil, or 21.27 sen per share, in the first quarter ended Nov 30 against RM7.68mil made a year earlier.

Chin Teck had proposed an interim gross dividend of 25 sen per share for the first quarter, versus 15 sen per share in the previous corresponding period.

URL: http://biz.thestar.com.my/news/story.asp?f...80&sec=business
chinkw1
post Feb 5 2008, 11:35 AM

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The CPO price is record high 3450/tonne.


Added on February 5, 2008, 11:37 am
QUOTE(chinkw1 @ Feb 5 2008, 11:35 AM)
The CPO price is record high 3450/tonne.
*
2008 will be plantation year i believe


Added on February 5, 2008, 1:38 pm
QUOTE(chinkw1 @ Feb 5 2008, 11:35 AM)
The CPO price is record high 3450/tonne.


Added on February 5, 2008, 11:37 am

2008 will be plantation year i believe
*
Wah IOI is in Pre-CNY rally.
This year choi san yeh come early.......smile.gif


Added on February 7, 2008, 9:17 pmCPO will continue to sustain at high price, as demand is more than supply.

All the way IOI, KLK. Rat and Palm Oil are in pairs.

This post has been edited by chinkw1: Feb 7 2008, 09:17 PM
SKY 1809
post Feb 11 2008, 10:58 AM

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Tradewind Plantations 9x 08 estimate earnings ( warning umno counter )

Asiatic 15x 08 estimate earnings

ioi - trading buy only

Judge your own.

This post has been edited by SKY 1809: Feb 11 2008, 11:30 AM
chinkw1
post Feb 11 2008, 11:29 PM

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QUOTE(SKY 1809 @ Feb 11 2008, 10:58 AM)
Tradewind Plantations 9x 08 estimate  earnings ( warning umno counter )

Asiatic    15x 08 estimate  earnings

ioi - trading buy only

Judge your own.
*
Hi, sorry for my lack of knowledge in symbols, can you kindly elaborate "Asiatic 15x 08 estimate earnings", what does 15x 08 means please?
SKY 1809
post Feb 11 2008, 11:51 PM

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QUOTE(chinkw1 @ Feb 12 2008, 12:29 AM)
Hi, sorry for my lack of knowledge in symbols, can you kindly elaborate "Asiatic 15x 08 estimate earnings", what does  15x 08 means please?
*
PE = PRICE/EARNING per share

PE 15x = Price [rm8.30] /Earnings of 2008 [rm0.55 ]

Let say Price of share is RM 8.30 , you are paying 15 times of 2008 estimated earnings. ( RM 0.55 ).

The higher the PE the more expensive is the valuation.

For rough guide, applicable to Malaysia , PE of 15X is considered as the fair benchmark ( not cheap and not expensive ).

Higher PE of let say 30x would prompt profit taking. PE of below 10x is considered a good buy. Other factors also needed to be considered such as good management etc.

Because different companies have different paid up capital and share prices , so PE is quite a useful tool to compare their valuations. Not an absolute measurement. Current trend is to take future earnings such as 08 or 09 ( buying forward or future performance )

Earning = earning per share [ EPS ]

For example, KLK traded at RM 18 at PE of 15x 08 is still considered not expensive.

"Stock A " traded at RM 2.00 at PE of 30x 08 is considered very expensive.

If you have KLK and Stock A, the decision is to sell Stock A and keep KLK.

Another example :-

klk at rm 18 PE 15x 08
Asiatic at rm 8.30 PE 15x 08

Although price wise, there is a huge different, but from the PE point of view, they are of the same valuation.

So Tradewind Plant at RM 3.80 for PE 9x 08 actually is a good buy ( undervalued stock } , however it is connected to umno ( avoided by some people }.

At PE of 15x 08 it should worth RM 6.30



Just an additional investment tool for you to make better decision, not right and not wrong method.

This post has been edited by SKY 1809: Feb 12 2008, 09:30 AM
skiddtrader
post Feb 12 2008, 08:15 AM

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QUOTE(chinkw1 @ Feb 11 2008, 11:29 PM)
Hi, sorry for my lack of knowledge in symbols, can you kindly elaborate "Asiatic 15x 08 estimate earnings", what does  15x 08 means please?
*
Asiatic PE15x based on estimated earnings of 2008. So "Asiatic 15x 08" is just a short way of saying it.
chinkw1
post Feb 12 2008, 11:14 AM

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QUOTE(SKY 1809 @ Feb 11 2008, 11:51 PM)
PE = PRICE/EARNING per share

PE 15x  = Price [rm8.30] /Earnings of 2008 [rm0.55 ]

Let say Price of share is RM 8.30 , you are paying 15 times of 2008 estimated earnings. ( RM 0.55 ).

The higher the PE  the more expensive is the valuation.

For rough guide, applicable to  Malaysia , PE of 15X is considered as the fair benchmark ( not cheap and not expensive ).

Higher PE of let say 30x  would prompt profit taking. PE of below 10x is considered a good buy. Other factors also needed to be considered such as good management etc.

Because different companies have different paid up capital and share prices , so PE is quite a useful tool to compare their valuations. Not an absolute measurement. Current trend is to take future earnings such as 08 or 09 ( buying forward or future performance )

Earning = earning per share [ EPS ]

For example, KLK traded at RM 18 at PE of 15x 08  is still considered not expensive.

"Stock A " traded at RM 2.00 at PE of 30x 08 is considered very expensive.

If you have KLK and Stock A, the decision is to sell Stock A and keep KLK.

Another example :-

klk at rm 18        PE 15x 08
Asiatic at rm 8.30 PE 15x 08

Although price wise, there is a huge different, but from the PE point of view, they are of the same valuation.

So Tradewind Plant at RM 3.80 for PE 9x 08 actually is a good buy ( undervalued stock } , however it is connected to umno ( avoided by some people }.

At PE of 15x 08 it should  worth RM 6.30
Just an additional investment tool for you to make better decision, not right and not wrong method.
*
Hi Sky, Thanks for your kind explanation, i learn more detail about PE now, TQTQTQ bro.

keith_hjinhoh
post Feb 12 2008, 11:16 AM

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QUOTE
If you wait for hidden values to surface , then you may buy  RM 6.00 for Asiatic, is also a good buy. I am sure people buy Pbank not because the interest rates are good throughout the years. In fact, Public Bank interest rates are the most competitive ones. The hidden values also play apart. One thing I respect Public Bank most is their ability to lend to "China man"  without proper or complete documents, and yet their NPL is the lowest. They make efforts to know their customers' backgrounds, whereas other banks do not. I call this a hidden value. Some say this  is an extra bonus.


>> PBB really do so? They lend without proper or complete documents? Then i think it's more like a risk for investor. Even they study their background, some maybe able to hide from management. Who knows? Human mistake can happen..

QUOTE
In order for Singapore to successfully build their casinos, they need one important thing called "SAND" , which is hidden  beneath Malaysian Plantations, waiting to be explored.


>>Malaysia banned the export of sand in 1997, and since then, all of Singapore's sand supply has been coming from Indonesia.
http://www.aggregateresearch.com/caf/flyas...le.asp?id=10439

Well, you didnt do any homework do you? tongue.gif

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