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Perfect timing to SAILANG this stock! SailangTime

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Publish date: Sat, 05 Aug 2017, 12:25 PM
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UTDPLT: Earning Soared

 

Background

United Plantation Bhd ("UTDPLT") is involved in the cultivation and processing of palm oil, coconut and other plantation crops in a sustainable manner. Its estates are located in Malaysia and Indonesia, covering a total area of 50,855 hectares. For more, go here.

Historical Financial Performance

UTDPLT's top-line and bottom-line are both approaching the high recorded in FY2011. If profits can surpass the level achieved in FY2011, UTDPLT's share price may break to new high- similar to the 2010 upside breakout of the RM12.00 mark which led to the rally to RM27 by 2015. This is the basis for a call to track UTDPLT financial performance fro the next 1-2 quarters in anticipation of profit & price breakout.

 
Graph: UTDPLT's last 52 quarters' P&L
  
Recent Financial Results

For QE30/6/2017, UTDPLT's net profit rose 41% q-o-q or 52% y-o-y to RM110 million while revenue was mixed - down 6% q-o-q but up 28% y-o-y - to RM355 million. Profits rose q-o-q due to better financial results from its plantation & refinery divisions. The plantation division registered a 41.8% increase in the profit before tax in the current quarter from the previous quarter mainly due to a combination of higher production of CPO and PK, lower cost of production of CPO and a higher average CPO price achieved. The refinery recorded a 36.3% increase in profit before tax mainly due to more favorable hedging and trading positions.


Table: UTDPLT's last 8 quarterly P&L

 

Prospects For FY2017

Like other plantation companies, UTDPLT enjoyed recovery in palm oil production after the passing of El Nino in 2015-2016. To cap it off, crude palm oil prices had rallied due to concern that the recovery in overall palm oil production for the full year 2017, may not be as large as initially expected. Higher prices and output are likely to lead to a satisfactory year for FY2017.

Valuation

UTDPLT (closed at RM28.20 in the morning session) is now trading at a PER of 15.2x based on last 4 quarters' EPS of RM1.85.[Comment: at average 20x PER for plantation stocks, target price for UTDPLT is RM37] Its dividend yield is quite decent at 4.1%. 


Technical Outlook

UTDPLT is in an uptrend with support from its 10-month SMA line at RM27.00. That support also coincides with the support from the horizontal line.


Chart 1: UTDPLT's monthly chart as at July 31, 2017 (Source: ShareInvestor.com)
 


Chart 1: UTDPLT's monthly chart as at July 31, 2017 (Source: ShareInvestor.com)

Conclusion

Based on good financial performance, fair valuation & positive technical outlook, UTDPLT could be a good stock for long-term investment.

Note:

I hereby confirm that I do not have any direct interest in the security or securities mentioned in this post. However, I could have an indirect interest in the security or securities mentioned as some of my clients may have an interest in the acquisition or disposal of the aforementioned security or securities. As investor, you should fully research any security before making an investment decision.

 

http://nexttrade.blogspot.my/2017/08/utdplt-earning-soared.html

UTDPLT (2089)
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Breaking news: UTDPLT: Net profit soar 52%!!! SailangTime

Created by SailangTime | Aug 01, 2017

Discussions
2 people like this. Showing 16 of 16 comments

Alex Foo

Title: Perfect timing to SAILANG this stock! SailangTime

Disclaimer: As investor, you should fully research any security before making an investment decision.

hmm....?

2017-08-05 12:34

calvintaneng

This is a good article.

Yes , oil palm counters which as a class have been overlooked and neglected for far too long.

Both prices and production have gone up by 20% to 30%. Export of palm oil products in June have even exceeded e&e products.

So this is the correct time to buy oil palm related counters.

Should we sailang into Uplant?

I think better diversify into a few good oil palm counters instead.

2017-08-05 12:50

8wpwtmt8

The share price is RM28.20. How to afford?

2017-08-05 16:20

TrippleZ

Buy 100units only RM2820. You cannot afford? If like that cannot afford then I don't know what you doing here.

2017-08-05 17:22

TheContrarian

RM2820 you can buy 3,300 units of Cepatwawasan. If United Plantation goes up 10 sen you make RM10; if Cepatwawasan goes up just 1 sen you make RM33. :-)

2017-08-05 17:32

TrippleZ

And you lose RM10 if United Plantation down 10sen; if Cepat down just 1sen you lose RM33. But is not about gearing. Is about affordability which was the concerned by 8wpwtmt8.

2017-08-05 17:58

TheContrarian

If Cepat goes up by 10 sen can make RM330.

2017-08-05 19:08

TrippleZ

Yes. Also lose rm330 if Cepat goes down 10sen. Everything comes with risk.

2017-08-05 19:10

TheContrarian

If Cepat goes up by RM1 .... wow can make RM3,300 from an investment of RM2,820. :-)

2017-08-05 19:36

TrippleZ

That's interesting because Cepat cannot go down more than 84sen. No way to lose rm3300.

2017-08-05 20:01

calvintaneng

Cepat as well as MHC Pl also undervalue.

For High Growth go for CBIP. High Dividend is BPlant. Deep undervalue diversified assets is Dutaland.

In any case a rising tide lifts up all boats. So rising Palm Oil prices plus rising production bode well for all Oil Palm stocks as a whole

2017-08-05 20:10

TheContrarian

Hahaha TrippleZ, now you see my point.

2017-08-05 22:47

shareinvestor88

Look at Inno Plant. Undervalued

2017-08-06 03:50

chongyo

My job for 30 years is closed linked to palm oil. CPO hovering at RM2,500-RM2,600 throughout 2017 coupled with strong yield recovery this year will see plantations laughing to the bank. Production cost is as low as RM1,300 for the efficient and bigger plantation and RM1,500 for the smaller players. What business give almost 50% Gross Margin ??
Even CPO at RM2,000 , no pure plantation company will NOT loss money.
So , buy pure plantation company like SOP which is grossly undervalued !

2017-08-06 08:18

calvintaneng

chongyo My job for 30 years is closed linked to palm oil. CPO hovering at RM2,500-RM2,600 throughout 2017 coupled with strong yield recovery this year will see plantations laughing to the bank. Production cost is as low as RM1,300 for the efficient and bigger plantation and RM1,500 for the smaller players. What business give almost 50% Gross Margin ??
Even CPO at RM2,000 , no pure plantation company will NOT loss money.
So , buy pure plantation company like SOP which is grossly undervalued !
06/08/2017 08:18


GREAT!

CPO NOW ABOVE RM2,600 A TONNE IS GIVING MORE THAN 50% GROSS PROFIT

And Prices Will Sustain Due to Rival Soy oil being impacted by ongoing US Drought

See

http://www.motherjones.com/environment/2017/08/climatedesk-forget-flash-floods-flash-droughts-are-even-more-terrifying/

2017-08-07 11:18

SALAM

Plantation stocks are asset rich, steady and non-volatile, absolutely suitable for Calvin concept of investment for our next generation..Syabas Calvin!!

2017-08-07 11:36

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