Koon Yew Yin's Blog

Plantation companies will report less profit - Koon Yew Yin

Koon Yew Yin
Publish date: Tue, 24 May 2022, 10:19 AM
Koon Yew Yin
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An official blog in i3investor to publish sharing by Mr. Koon Yew Yin.

All materials published here are prepared by Mr. Koon Yew Yin

With good intention, I have posted a few articles to promote plantation stocks because CPO price has been sky rocketing to historical high as shown on the CPO price chart below. 

 

All investors are expecting plantation companies to report better profit for the quarter ending March which should be announced next week.

Among all the plantation companies, Cepatwawasan is the first to report its profit for the quarter ending March. Cepatwawasan reported 4.93 sen EPS for the quarter ending March. It reported 7.74 sen EPS for the quarter ending December.

Why should it report reduced profit when CPO price has been surging up higher and higher?

I was shocked to find out the reason why the company reported reduced profit despite the rising CPO price. Cepatwawasan produced less FFB due the shortage of foreign workers. Our government restricted entry of foreign workers due to Covid 19 pandemic. 

Plantation companies will most likely report lesser profit for the quarter ending March 2022 than the quarter ending December 2021 despite the rising CPO price.

Why CPO price is surging?

The reasons are:

1) The rising CPO price is due to reduced FFB production which is caused by shortage of foreign workers.

2) Indonesia CPO export restriction to help local consumers.

3) Sunflower oil export restriction due to Ukraine-Russia conflict. Ukraine and Russia produce about 80% of Sunflower oil in the world.

As required by Bursa, all plantation companies are required to report their monthly FFB production.  

The tabulation below shows all the plantation companies produced lesser FFB for the quarter ending March than the previous quarter ending December 2021.   

Name

Month    

FFB ton

3 months

Reduced %

Cepat

March

6982

 

 

 

Feb

6713

21,945

 

 

Jan

8278

 

 

 

Dec

9375

 

 

 

Nov

10,145

39,402

79%

 

Oct

10,945

 

 

Subur

March

23,117

 

 

 

Feb

18,295

66,272

 

 

Jan

22,857

 

 

 

Dec

28,982

 

 

 

Nov

30,501

91,982

39%

 

Oct

32,439

 

 

Sarawak Plant

March

22,897

 

 

 

Feb

19,126

62,661

 

 

Jan

20,638

 

 

 

Dec

25,217

 

 

 

Nov

29,500

84,641

35%

 

Oct

29,964

 

 

JayaTiasa

March

55,363

 

 

 

Feb

43,722

151,243

 

 

Jan

52,125

 

 

 

Dec

59,766

 

 

 

Nov

67,409

198,069

30%

 

Oct

70,834

 

 

SOP

March

88,033

 

 

 

Feb

76,788

253,543

 

 

Jan

88,787

 

 

 

Dec

102,278

 

 

 

Nov

108,723

315,485

24%

 

Oct

104,480

 

 

 

As I said, despite the record CPO price, all plantation companies would not report higher profit due to shortage of workers. However, the situation has changed as Malaysia is re-opening of international borders on 1st April 2020 as you can see the announcement below. 

Plantation companies has good profit growth prospect.     

MALAYSIA - RE-OPENING OF INTERNATIONAL BORDERS ON 1 APRIL 2022. we refer to the press release issued by the Ministry of Health (MOH) dated 24 March 2022 where the Government announced the reopening of Malaysia's International borders for travellers from all countries, effective 1 April 2022. All plantation companies should produce more FFB for the quarter ending June than the quarter ending March.

Investors must look ahead to make more money. Clever investors should take advantage to buy plantation stocks especially Subur Tiasa which has been dropping rapidly as shown on the price chart below.

 

 

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Discussions
Be the first to like this. Showing 34 of 34 comments

ahbah

Subur looks like a falling knife, how to catch it without cutting our hands ?

1 month ago

ahbah

Got mani plantation counters reported more profit.

1 month ago

stockraider

Simple mah!

We are facing food inflation loh!

As food prices may even go up as high as 60% in the next 6 mths loh!

Best defense....buy into plantation....that hold enormous plantation land and produce food like palmoil....to hedge agst inflation mah!

1 month ago

emsvsi

Dear Mr Koon,

I presume you have sold your palm oil stocks

1 month ago

drken91

I have said it before...
shortage of workers is the biggest enemy..

with MYR going to ATL, Indon pun tak nak kerja msia dh oi.... hahahh
so harapkan the new generation kids to go farming and plant sawit?
mampus la if harapkan Gen Z and the millenials to go tanam sawit and padi.. XD

Smart Farming is the way forward..
it will address labour shortage, agricultural wastage and boost efficiency

until these plantations adopt it, I won't touch them till then

1 month ago

s3phiroth

I am shock that now only kyy knows that Q1 ffb output is always lower than Q4.

1 month ago

s3phiroth

The low production output in Q1 has nothing to do with any other factors but the nature of palm tre.

1 month ago

OnTime

I am shocked he didn't know of the labour shortage!

1 month ago

Tobby

It's not labor shortage! Rather coming drought that will produce much lower yield!

1 month ago

PlantBull

Uncle... Why u didnt mention about canola oil and soy oil shortage also...

1 month ago

ahbah

drought = low yield = high price = more profit for plantation stocks ?

1 month ago

ahbah

" As food prices may even go up as high as 60% in the next 6 mths loh! "

Can I say the above in another way that is our cash may drop as much as 60% in the next 6 mths ?

Killer inflation is coming to destroy our cash ?

1 month ago

ahbah

Our hard earn cash is losing its buying power veri fast ?

1 month ago

ahbah

What will then happen to our Ringgit value when food prices go up 60% ?

1 month ago

Plantermen

Uncle KYY part of your news article is not accurate. Yes some of the west Malaysia based plantation companies may report lower FFB production figures in their 1st Qtr. But please do take note. Sabah planter's production may be higher vs their peers in Peninsular or Sarawak. Earnings growth for all the planter's will be higher. Due to strong CPO & Kernel average traded prices. The last 5 days we have seen all the planters have reported higher profit { not less profit} in their statutory corporate announcement

1 month ago

Johnzhang

Lower production in March qtr compared to Dec qtr is due to crop seasonality . Every year is the same !

1 month ago

brianklc

KYY, lower production due to low yield season, it’s not due to low manpower! What kind of logic this this??? Suddenly a lot of workers resign n caused lower production??? Actually u can keep ur articles to urself, it’s full of bs…

1 month ago

mf

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1 month ago

Jonathan Keung

Latest news TA Ann, TSH, SOP, SWK, BPlant, SIM, IOI all reported substantial earnings and higher profit

1 month ago

sensonic

Post removed.Why?

1 month ago

Johnzhang

The overall sentiment for plantations are badly affected by the disappointing results of the big caps.

All my small cap and mid cap plantations show excellent Q1 2022 results :
SOP EPS 34.09sen (+146% yoy)
Bplant EPS 19.43 sen (+353% yoy for operations)
Taann EPS 23.75 sen (+155% yoy)
Swkpltn EPS 15.52 sen (+82% yoy)
MHC EPS 5.8sen (+67% yoy)
Cepat EPS 4.93sen (+172% yoy)

They put the big boys to shame !
UP EPS 14.39sen (- 20% yoy)
Simepltn EPS 10.4sen (+27% yoy)
IOI EPS 6.62sen (+3% yoy)

Stay invested in small and mid cap plantation counters. The best yet to come.

1 month ago

Riaz1954

Genting plantation have doubled their profits compared to last quarter!

1 month ago

Tiger62

At the end of the writing, uncle want you to buy subur tiasa. So it can be he is selling now to you. Don't fall into his trap.

1 month ago

SecretOne

KYY contradicting himself again and again.\

Plantation Companies will have better profit growth - Koon Yew Yin (20 May)
https://klse.i3investor.com/web/blog/detail/koonyewyinblog/2022-05-20-...

1 month ago

brianklc

KYY, what goes around comes around… hoped u enjoy ur winning and live a prosper and peaceful life… karma will balance everything in the end…those that follows his advise that trap, wished u all the best…

1 month ago

Tiger62

Now you see, confirmed this KYY when writing already had bad intention of selling to those believe in him. In 3 days the price of subur drop 20% and if you don't sell the price may drop to 50%.. he did it over and over again. Fxxxxxk hiiiimmm

1 month ago

speakup

after KYY finish buying, he promote kaw kaw with nice articles
during his promotions, he quietly sells
once finish selling, he will say bad things about it

so he buys cheaps and sells near peak to i3 readers

1 month ago

skoh888

How can he ask people to buy because the chart is showing a downtrend? I thought he says chart must show uptrend then only buy haha

1 month ago

skoh888

I quite enjoy reading his articles..but just for comic relief

1 month ago

brianklc

Worst, KYY asked ppl to buy shares in a company that has liquidity issues… he is worse of all pariah

1 month ago

klsejeff88

MALAYSIA - RE-OPENING OF INTERNATIONAL BORDERS ON 1 APRIL 2022

LOL, as if border open all estate worker will flow in to address the severe shortage of worker

1 month ago

Raymond Tiruchelvam

in short, when u hear people over publise certain counters just make sure you DONT buy them... example, subur tiasa, jaya tiasa, tsh, hengyuen, ..... and when IBs say dont buy certain counters, actually u shd buy them.... more on long term gains

1 month ago

klsejeff88

He stuck a lot in Subur , slowly turning to Kubur. need people to buy to support price. lol

1 month ago

Michael R.

It is simple logic.. prices sky rocketing is not because the oil is more valuable consumable item, it was due to lack of produced...

Lack of workers.. now labor union and those country representative demanding more and better work environment and pay rates..

Lesser willing to come back to that volatile market and hard jobs.. During Covid pandemic they being forced not to work... No money... Or hard to go back to their home countries.. Once they went back, hard to return to Malaysia... Past workers already found better jobs.. Newer generation with lack of skills and technology are reluctant to join in..

Trees getting older and taller..

2 weeks ago

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