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Koon Yew Yin's Blog

Author: Koon Yew Yin   |   Latest post: Mon, 6 Dec 2021, 3:46 PM

 

The most undervalued share I know - Koon Yew Yin

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Koon Yew Yin

My main objective to reproduce this article is to teach you how to become a super investor. My intention is noble but it would seem that I am boasting again.

As I said many a time before, there are many share selection criteria such as P/E , dividend yield, price to book value, NTA etc, but I consider the most important criterion is profit growth prospect.

Before you buy any share you must make sure that the company can make more money this year than last year and it can make more money next year than this year and continue to make increasing money in the foreseeable next few years.

Jaya Tiasa has this ability of producing more and more profit in the next 10 years. Now you, especially kk123 & wt222 who has ridiculed me before must go back to study my article “Why I sold R Sawit and SOP to buy Jaya Tiasa”.  It is important for those who have not been successful in stock picking must change their old style or mind-set. Kk123 & wt222 must examine your track record to realise how well you have performed before you dare to ridicule me.   

I published the following article on Tradewinds Plantation on

Koon Yew Yin- 22nd Feb 2013

There are many famous cash rich plantation companies but they are usually fully valued. Of course, it is very safe to buy them but I prefer to buy undervalued shares and take some calculated risk to earn exceptional profit.

On 19th March 2012, UOB Kay Hian published a report on Tradewinds Plantation (TWSP). The salient points are:

a)            TWSP is the sixth-largest plantation company in Malaysia by planted area. Only six listed plantation companies in Malaysia have a planted area of over 90,000ha each.

b)            Its FFB production to grow at 3-year CAGR of 13.4%. Fresh fruit bunch (FFB) production is expected to grow 12-15% in 2012-14, higher than industry growth of 5-8%. The strong production growth will be supported by: a) 11% pa increase in mature area for the next four years, b) 20% of young areas to provide strong double-digit growth, and c) yield improvement in its prime areas (49% of planted areas).

c)            It is a hidden gem. All TWSP’s land is within Malaysia. Given the scarcity of land in Malaysia, its land would be more valuable than similar land in Indonesia. At the current plantation land market  price, Tradewinds’ RNAV would be RM19.58, significantly higher than its current share price.

With its FFB production increases by 13% (compound annual growth rate) and its recent acquisition, TWSP has more planted land and FFB production than Genting Plantation.

FFB production (Tons): Dec 2012 - Nov    -    Oct     -      Sept             total

TWSP                              149,000 - 167,000 -178,000 – 154,000 =   648,000

Genting Plant               155,000 – 156,000 – 149,000 -147,000 =  607,000

Basing on the closing share price on 21th Feb 2013 the market capitalisation of TWSP is Rm 4.42 X 529 million issued shares = Rm 2,338 million and Genting Plant is Rm 8.42X 759 million issued shares = Rm 6,390 million.

That is why the controlling shareholders want to buy up all TWSP shares that they do not own. Under the takeover code, they cannot do it because I have accumulated sufficient shares to block them. 

If you decide to buy TWSP, I am not responsible for your profit or loss.

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  7 people like this.
 
Icon8888 I have taken a small position. No harm.
05/02/2014 10:54 PM
iafx sure? borrowings denominated in USD already USD21m, not to mention the current interest bearing liabilities. fortunately, private placement repay 110m, *hopefully no dilution.
05/02/2014 10:55 PM
Icon8888 Iafx, just curious, what stocks are you holding ? (Asking in friendly manner)
05/02/2014 10:57 PM
speakup supermax also has borrowings in US$. our ringgit has weaken meaning companies like supermax have to pay more to service their US$ loans.
05/02/2014 10:58 PM
eric8168 wait......world cup is coming.....every time when there is big event the share market will correct ....n mr koon please see each of football match during that time ,pls pls dont support the jt price ...let its price drop because jt havent so enough profit to show better pe and give good dividend. please let me (small fish) buy at lower price. tq kong xi fa cai !!!!!!!!
05/02/2014 11:00 PM
Up_down Icon8888. I will study your valuation method for plantation companies.

By looking at INNO, I guess you have spent much time to do the research for all plantation related counters. INNO used to in my watchlist but I missed the opportunity to pick up at price 1.2 .
05/02/2014 11:02 PM
iafx at very least supermax rolling 4q eps is 21c. there is nothing to shout about borrowings as it is integral part of every business, HOWEVER, when the level way surpass the earning continuously, that's when the bell start to ring.

some heard it some don't, nevermind, yr $ yr choice, it's juz a view here. who knows, sharky collected enough, this ctr still fried like nobody business.
05/02/2014 11:04 PM
Icon8888 I also missed inno at 120 (actually it was 1.00 when I was hesitating). But I still think it is cheap now. So I bought at 156.
05/02/2014 11:07 PM
Up_down Iafx. No worry about the borrowing of Jtiasa. Jtiasa bet big on extreme El Niño within 3 years.
05/02/2014 11:09 PM
iafx hahahaa... finally, someone spell the magic word El Nino ;D hopefully v don't have to wait 3 years.
05/02/2014 11:14 PM
Up_down Don't under estimate the magic of El Niño. It is very powerful

WMO El Niño/La Niña Update

30 January 2014
Download pdf versions: English Français Español

Current Situation and Outlook

The tropical Pacific continues to be ENSO-neutral (neither El Niño nor La Niña). Model forecasts and expert opinion suggest that neutral conditions are likely to continue into the second quarter of 2014. Current model outlooks further suggest an enhanced possibility of the development of a weak El Niño around the middle of 2014, with approximately equal chances for neutral or weak El Niño. However, models tend to have reduced skill when forecasting through the March-May period. National Meteorological and Hydrological Services and other agencies will continue to monitor the conditions over the Pacific and assess the most likely state of the climate through the first half of 2014.

Since the second quarter of 2012 El Niño-Southern Oscillation (ENSO) indicators in the tropical Pacific (e.g., tropical Pacific sea surface temperatures, sea level pressure, cloudiness and trade winds) have generally been at neutral levels, indicating that neither El Niño nor La Niña conditions have been present.

The latest outlooks from climate models and expert opinion suggest that oceanic conditions and atmospheric anomalies associated with El Niño or La Niña are most likely to remain neutral into the second quarter of 2014, with virtually all models maintaining average conditions. However, by around the middle of 2014, model forecasts generally indicate the chance of El Niño increasing to a similar level as that for ENSO-neutral. For the June to August period, nearly one-half of the models surveyed predict a weak El Niño situation to develop, while the other one-half predict a continuation of neutral conditions. It must be noted that model outlooks that span March-May period tend to have particularly lower skill than those made at other times of year. Hence some caution should be exercised when using long range outlooks made at this time for the middle of the year and beyond. Of the one or two models that predict the development of La Niña, such conditions are reached only briefly during the next couple of months.

Overall, while there is a very slight chance for La Niña development in the next one to two months, ENSO-neutral is considered the most likely scenario into to the April to June period, followed by roughly equal chances for neutral or weak El Niño during the third quarter of 2014.

It is important to note that El Niño and La Niña are not the only factors that drive global climate patterns. At the regional level, seasonal outlooks need to assess the relative impacts of both the El Niño/La Niña state and other locally relevant climate drivers. For example, the state of the Indian Ocean Dipole, or the Tropical Atlantic SST Dipole, may impact the climate in the adjacent land areas. Locally applicable information is available via regional/national seasonal climate outlooks, such as those produced by WMO Regional Climate Centres (RCCs), Regional Climate Outlook Forums (RCOFs) and National Meteorological and Hydrological Services (NMHSs).

In summary:

ENSO conditions are currently neutral (neither El Niño nor La Niña);
As of mid-January 2014, except for a small possibility for weak and brief La Niña development during the next couple of months, outlooks indicate likely continuation of neutral conditions into the second quarter of 2014;
Current forecasts indicate approximately equal chances for neutral conditions or the development of a weak El Niño during the third quarter of 2014, reflecting increased chances for development of a weak El Niño.
The situation in the tropical Pacific and Indian Ocean will continue to be carefully monitored. More detailed interpretations of regional climate fluctuations will be generated routinely by the climate forecasting community over the coming months and will be made available through the National Meteorological and Hydrological Services. For web links of the National Meteorological Hydrological Services, please visit:

http://www.wmo.int/pages/members/members_en.html
05/02/2014 11:21 PM
Up_down Icon8888, your statement: " could it be because JT has bigger planted area (and as a result, more immatured palms) than TA, hence need to incur higher operating cost (fertiliser , etc) ? "

If you look at the accounting policy of Biological Assets, it seems that the all operating costs (fertilizer & etc) for Immature palm is capitalized as Biological Assets. Back to question again. Why Jtiasa make so less profit? Is it due to inefficiency of its operation?

" Plantation expenditure incurred on land clearing, upkeep of immature oil palms, administrative expenses and interest incurred during the pre-cropping period are capitalised under biological assets and are not amortised.

Upon maturity, all subsequent maintenance expenditure is charged to the statement of comprehensive income.
Replanting expenditure incurred on similar crops on formerly developed areas is chargeable to the profit or
loss in the financial year in which it is incurred. "
06/02/2014 10:58 AM
Icon8888 inefficiency could be a factor also. They spent past thirty years chopping down trees, now have to learn to plant trees.... maybe they are not used to it...ha ha ha
06/02/2014 11:02 AM
okdoke Hi Up_down, I am newbie in KLSE and now interested in TA Ann ( of course Buy and Sell at my own risk ).. mind sharing your knowledge? what data you focus to evaluate lower risk and faster growth rate for TaAnn compared to Jtiasa based on below data(Thanks in advance) :


TAAN
Weight average number of shares: 370,537,000 ( 38.3% of Jaya Tiasa )

Palm oil segment:
Land bank: 97,855 hectares
Planted area : 35,345 hectares
Mature area: 26,161 hectares
Immature area: 9,184 hectares ( 26% of Planted area )

Timber concessions with a total area of 362,439 hectares
Reforestation:
Total Land Area: 313,078 hectares
Planted Area : 33,000 hectares

PER: 23.7
Gearing ratio: 27.7%
Dividend Yield: 2.42%
Dividend declared in past 12 months : 10%
Average costs / hectare : RM 9,020
Amortization of Biological assets of 319 million over 25 years
06/02/2014 11:13 AM
Icon8888 going up..... 235 now...
06/02/2014 2:45 PM
Icon8888 238
06/02/2014 2:56 PM
Icon8888 in stock market, the person who makes money wins the argument

everything else is bullshit
06/02/2014 2:58 PM
tonylim Post removed. Why?
06/02/2014 3:16 PM
kaliaoki Luck is what happen when preparation meets oppoturnity
06/02/2014 3:17 PM
Icon8888 tonylim newbie why so angry ? cool down....
06/02/2014 3:20 PM
tonylim newbie? LOL
06/02/2014 3:23 PM
eric8168 shark let price down.......
06/02/2014 4:16 PM
Up_down Okdoke
I would focus on the data below for making a comparison.

Business operation
1. Land bank ( evaluate the long term growth potential given available land resources )
2. Planted area. ( evaluate mid term growth )
3. Mature / immature area ( evaluate mid term growth )
4. FFB production / hectare ( evaluate short / mid term growth )
5. OER ( evaluate business operation efficiency )

Financial
1. PE
2. Gearing ( evaluate borrowing ability to fund mid term or long term growth )
3. Planted costs / hectare ( evaluate business operation efficiency )
4. Current financial performance
12/02/2014 9:00 PM
mcmalcolm jaya tiasa may boast higher earnings but it has continuously penalized investors by providing inadequate dividends.
30/05/2014 6:24 PM
haikeyila where is everyone now??
29/08/2014 4:06 PM
Up_down Is it the market return the justice to those people being screwed few months ago?

" Jaya Tiasa has this ability of producing more and more profit in the next 10 years. Now you, especially kk123 & wt222 who has ridiculed me before must go back to study my article “Why I sold R Sawit and SOP to buy Jaya Tiasa”. It is important for those who have not been successful in stock picking must change their old style or mind-set. Kk123 & wt222 must examine your track record to realise how well you have performed before you dare to ridicule me. "
30/08/2014 8:05 AM
Surelaughdie Wakaka. Should have listened to optimusprime .
30/08/2014 10:48 AM
Up_down Is this is the lesson to us? ' don't be too cocky no matter who you are. The nature of market force is unpredictable.'
30/08/2014 1:42 PM
laughnonstop up__down. ppl billionair ma. fark also smell like perfume. me n u taklak pangkat, taklat standard. who want to listen.
01/09/2014 9:56 PM
Up_down Laughnonstop. We are here just to give some comments based on the facts and figures. These input may not carry weight for their decision making. It's up to them to decide. People like to listen great growth story. People believed that one great supper investor were helping them to make money by driving the share price up. Our comments may not be relevant to them. Many did not know it is just half of the facts presented to them. It common to pay some tuition fee for learning an experience.
01/09/2014 10:17 PM
laughnonstop they should thank Uncle koon for giving them the most important lesson in stock trading. albeit at very high cost. wakakaka.

the uncle koon message to all.

"dont trust anyone, not even a philantropist tycoon a warran buffet wannabe."

so guys n girls, now u know the free charkueyteow in ipoh is actually very expensive.
01/09/2014 10:23 PM
alphajack What else but Insas. Next up would probably be Plenitude.
01/09/2014 10:25 PM
laughnonstop hmmm. tis is good.



optimus2
129 posts
Posted by optimus2 > Jan 31, 2014 10:36 AM | Report Abuse

Make me laugh onli...outdate la. Wrong angle


Koon Yew Yin
257 posts
Posted by Koon Yew Yin > Jan 31, 2014 11:13 AM | Report Abuse

Readers would notice that optimus2 is trying to ridicule me. Why don't optimus2 tell us his real name instead of hiding behind the pseudonym so that we know how clever he is or how much money he has made from the stock market. If he has any intelligence, he should write his comment in proper English so that we can learn something from him. Unless he does that I can only say that he is just a big gas bag and have mud or air in his head.

I always welcome controversial view so that I can learn and appreciate others point of view.


TengTJ
29 posts
Posted by TengTJ > Jan 31, 2014 11:37 AM | Report Abuse

Optimus-You can disagree with Mr.Koon,but please have respect for him and any forumer here.

Gong Xi Fa Cai to all
01/09/2014 10:27 PM
laughnonstop Posted by optimusprime > Feb 5, 2014 10:49 PM | Report Abuse

this plantation counter is the best in universe..... wakakaka.
guys, dont waste time here. move on.
01/09/2014 10:27 PM
ksng0307 Thumbs up to uncle Koon for sparing his time in doing the research of Jtiasa. Whether you agree with him or not is immaterial, rather we should appreciate him in sharing this info to the general public. It is not easy to write up such detailed information and analysis without certain knowledges and writing skills. Being the founder of IJM, Mr Koon certainly has the ability to do so. Thaning you and look forward to your future artticles on share investing.
28/10/2014 11:24 AM
haikeyila self-proclaimed super-investor was super-wrong with this one, and went into hiding. hopefully not suffering from a super-loss
29/11/2014 1:40 PM
kk123 Well he who recommend probably already cash out or cutloss
So be careful of all these so call super investors or super conman
29/11/2014 3:48 PM
kk123 Now mr koon & his goons followers are all hiding from losses
Once recover he will come out and blow trumpet again
29/11/2014 3:50 PM
littlekoon Post removed. Why?
29/11/2014 3:57 PM
kk123 Mudajaya also mr koon loss big time
Although he promoted it as though the company has few tons of gold inside it's account
29/11/2014 4:01 PM
littlekoon Post removed. Why?
29/11/2014 4:06 PM
kk123 Mr koon trap many in jaya tiasa and Mudajaya
I hope u all already cutloss as I m sure koon has took profit or cutloss long time ago
29/11/2014 8:12 PM
frankienang Like what they say, never trust Penang lang
29/11/2014 8:19 PM
frankienang I never trust politicians or businessmen from Penang, very cunning one
29/11/2014 8:20 PM
murali I thought Super Con is from Perak?
29/11/2014 11:18 PM
walau2u I think Uncle U lost most in Xing Quan.....drop like hell....Even Uncle K conned by those China Con-Master.
29/11/2014 11:19 PM
murali I think its kama,...kyy conned people into buying rsawit n jtiasa....now he paid for it
29/11/2014 11:24 PM
haikeyila karma karma karma karma chameleon..
26/12/2014 1:45 PM
antikoonracis Post removed. Why?
26/12/2014 2:02 PM
haikeyila New TP for the 'most undervalued counter' - 85 sen only, lol.
18/03/2015 5:18 PM


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