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1,610 comment(s). Last comment by LouiseS at Jan 13, 2020 7:05 PM
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354 posts

Posted by arfastrade > Sep 21, 2018 3:09 PM | Report Abuse

Sector effect as Pinepac hit limit up

Tarrance Schu
237 posts

Posted by Tarrance Schu > Sep 27, 2018 4:29 PM | Report Abuse

this counter very shit....cut loss

87 posts

Posted by klangkopitiam > Jan 6, 2019 2:26 PM | Report Abuse


474 posts

Posted by commonsense > Jan 25, 2019 2:48 PM | Report Abuse

Kretam Holdings is not the only plantation company that posted bad results in the most recent quarters. If you go through other financial reports, most (if not all) plantation companies are affected by the low CPO price in Jul-Sept period.

In terms of valuation, all plantation stocks are currently trading at a high PE multiple (for those that still managed to record profit) or in Kretam case, negative PE. This is reflective of the downturn cycle of the plantation industry. Don't think that the industry will reverse their down cycle anytime soon given the general demand of the commodity is expected to go down in the future. China for example, is negotiating with US to take in more agriculture products from US which would potentially include soybean (or soybean oil). In general, Chinese consumption of oil would not actually go up that much so the increase of soybean oil import from US to China would actually be at the expense of other oil commodities from other countries (in particular palm oil from Indonesia and Malaysia). Another issue is on the European demand of palm oil which is expected to go down exponentially given the proposed ban of palm oil use in food and transportation industries in the future. They have already agreed to phase out the use of palm oil in transport fuel by 2030. Some countries like France and Norway have already started to move away from palm oil.

If you are still interested in the plantation industry then you should try to look at other companies first (at least until Kretam is really on a stable footing). You will notice that most plantation stocks have fallen but PE valuation is still high. As I mentioned earlier, this is normal given that the industry cycle is currently at the bottom as reflected by the CPO price. It is better for you to do a PE calculation using an average 5 years PAT to take into account the cyclical nature of the industry. With this in mind you need to have a slightly long-term investment horizon when buying into oil plantation companies.

If you are looking to diversify your portfolio outside of Kretam (due to its earnings uncertainties and bleak growth outlook) I would recommend you to look at MBMR.

MBMR is a direct proxy to Perodua via its 22.6% interest in the company. Valuation is cheap at only 6.9x PE (based on target FY18 profit of RM145mil. 9m profit is already RM106mil). PB is low at only 0.7x BV. 4Q18 results is expected to be higher than 3Q18 and last year's 4Q17.

FY19 growth will be driven by the still high demand of the new Myvi and the newly launched SUV Aruz and also the newly revamp Alza in 2H19. The recent announcement of closure and potential disposal of the loss-making alloy wheel manufacturing business alone is expected to boost the company’s profit by an additional RM10mil to RM20mil. I am projecting a profit to shareholder of RM170 mil for FY19 which at the current price values MBMR at only 5.9x PE.

Please go through the analyst reports (https://klse.i3investor.com/servlets/stk/pt/5983.jsp) and do your own analysis before making any decisions. There are 8 analysts in total covering the stock with most of them having a TP of above RM3 (all have a buy rating). The average TP for the 8 analysts is around RM3.50.

Good luck.

158 posts

Posted by o0o54088o0o > Feb 13, 2019 11:06 AM | Report Abuse

cpo is climbing,,kretam at such a low price..i will sell my underwear to buy this

219 posts

Posted by andrew95 > Nov 25, 2019 2:00 PM | Report Abuse

is this stock dead? lol

85 posts

Posted by GoHaiDuongGo > Dec 14, 2019 6:52 AM | Report Abuse

very much alive hahaha

1 post

Posted by rusellrusell198 > Dec 30, 2019 6:05 PM | Report Abuse

Kretam will following rsawit n tdm. Sudah bgn dr zzz

45 posts

Posted by hanifanip85 > Dec 31, 2019 2:07 PM | Report Abuse

kretam wake up

206 posts

Posted by LouiseS > Jan 13, 2020 7:05 PM | Report Abuse

KRETAM's main business segments include oil palm plantations and operation of oil palm mills and refinery.

Its earning performance has been overall fluctuating in last five years, whereby its earning per share overall fluctuated from -1.66 sen to 0.87sen. In terms of revenue, a 21.6% drop was mainly attributed to the low palm products prices in 2018. As for the Group, it recorded a loss of RM38.5 million. The loss before interest and tax compared to revenue generated was a result of the downtrend in commodity prices, where products were sold at a lower profit margin.


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