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KMLOONG–Fundamental Analysis (28 Mar 2014) - L. C. Chong

Tan KW
Publish date: Fri, 28 Mar 2014, 04:29 PM
Tan KW
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Posted by L. C. Chong on March 28, 2014

KMLOONG Analysis:-

Excel – http://1drv.ms/O2EacY

My View:-

- Fair values:
  – 5-Y DCF – 3.47 – 3.87
    – Buy under: 2.84 – 3.16 (MOS: 21% – 29%)
  – EY% – Buy below 2.47, sell above 3.31
  – In my opinion, 3.4 – 3.8 is fair value range for KMLOONG. KMLOONG is currently undervalued.
- The CPO price moves in a cyclical manner. In a worst case scenario, KMLOONG, a net cash company with a low cost of production and an experienced management team would be able to withstand the turbulence and even take up expansion opportunities.
- Going forward, I expect KMLOONG to perform better in FY15 as it plans to improve production, while benefiting from favourable palm oil prices.
- Recently, I have purchased KMLOONG at 2.8, and then 2.74.

Latest Financial – Q4 2014 Financial Report (27 Mar 2013) http://www.bursamalaysia.com/market/listed-companies/company-announcements/1577605

At the time of writing, I owned shares of KMLOONG.

http://lcchong.wordpress.com/2014/03/28/kmloongfundamental-analysis-28-mar-2014/

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kcchongnz

If I were to pick a plantation stock, I probably will pick this Kimloong Resources, a low risk investment. Why low risk?

Steady revenue and profit, healthy balance sheet, and yes, good cash flows, and most of all selling cheap. That is what i mean by low risk investment.

Am I looking at RM1.00 return? Not at all. If RM1.00 profit comes, I would be very happy. But at least the downside is limited.

2014-03-31 13:03

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