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Author: Tan KW   |   Latest post: Tue, 21 May 2019, 8:01 AM

 

COMMENTS ON BOUSTEAD HOLDINGS BERHAD (2771) - louisesinvesting

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Tuesday, January 8, 2019

 
FIGURE 1: BOUSTEAD HOLDINGS BERHAD LAST 5 YEARS SHARE PRICE TREND
 
**analysis based on 2017 annual report.
1.       GENERAL INTRO: This counter core business: (1) oil palm plantation, (2) property development and hotel operation, (3) generic pharmaceuticals manufacturing and distribution, (4) ship building, repair and maintenance, (5) Affin Bank and (6) BHP petrol stations.
 
2.       NOTABLE POINTS:
a.       the 2017 report show good earnings due to sale of (high development potential) plantation land 678 hectres, the received fund is applicable to purchase 11,600 hectres land at another location, considerably increase land available for oil palm plantation. The proposed purchase of land is in close proximity to existing estates, which increases overall economies of scale.
b.      employing efficiency enhancing technologies in oil palm plantation, including using high oil yield clones of oil palm, use of beneficial microbes for reducing fertilizer usage, utilise GPS and drone technologies in field mapping, palm census and monitoring.
c.       other well-known brands products distributed under this group include Kao (Biore, Laurier) and Cadbury Chocolate. Education institution include University of Nottingham Malaysia.
d.      BHP Petrol stations number 380 in Malaysia, contribute significantly to company earnings
 
3.       IS THIS COUNTER A STRONG GROWTH STOCK? 
a.       REVENUE RANGE (million): ~ 10,020 million in 2017 annual report, this is a high revenue company.
b.      SHARE PRICE: share price on decreasing trend in last few years, decreased from ~ RM3.40 in 2013 to current share price of ~RM1.40.
c.       EARNING PER SHARE (EPS): earning per share in last 5 years are fluctuating, from 0.8 to 29.2 sen per share
d.      FUTURE POTENTIAL/PROSPECTS: for plantation segment, palm oil pricing depend on socio-economic factors, e.g. EU phasing out palm oil usage, India applying increased import tariffs on edible oils
e.      CAPITAL EXPENDITURE (CAPEX): spending on purchase of new fixed assets is 253.7 million, around 1.4% of total assets.
 
4.       IS THIS A STRONG DIVIDEND STOCK?     
a.       DIVIDEND YIELD: in 2017 report, dividend of 11sen per share payout declared, amount to dividend yield of 8.03% based on current share price.
b.      CONSISTENCY: in last five years have consistent dividend payout to shareholders, however the amount of dividend paid on decreasing trend, 2013-2017 dividend payout were 30, 26, 20, 17.5 and 11 sen per share, respectively.
 
5.       OTHER INDICATORS:
a.       CASH FLOW: cash flow is positive, around 592 million
b.      SUPPORT BY INSTITUTIONAL INVESTORS: there is presence of 8 institutional investors at top 30 major shareholders list, including Kumpulan Wang Persaraan, Lembaga Tabung Angkatan Tentera, EPF and few investment funds and insurance funds.
 
Disclaimer: The content of the blog posts are for sharing purpose only. Readers are encouraged to carry out further research and analysis as well as follow up latest update information before making any investment decisions.

 

 

https://louisesinvesting.blogspot.com/2019/01/comments-on-boustead-holdings-berhad.html

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