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August 26, 2020 20:33 pm +08
 
 
 
TSH Resources sells two Indonesian plantation units to KLK to pay debts
-A+A
 

KUALA LUMPUR (Aug 26): TSH Resources Bhd is disposing of its 90% stakes in two Indonesian subsidiaries to Kuala Lumpur Kepong Bhd (KLK), realising cash proceeds of RM517.62 million.

TSH said in a statement the money will be used mainly to repay its bank borrowings which amount to RM513.12 million.

Post-disposal, the group’s net gearing will be reduced to 0.48 times from 0.83 times as at Dec 31, 2019.

"The improved gearing will also provide greater capacity to raise additional funding to accelerate the development of its remaining unplanted plantation lands. Upon maturity, the remaining plantation lands will contribute positively towards the TSH Resources group’s financial performance,” it added.

Meanwhile, TSH will also recognise an RM39 million profit on the disposal.

The disposal involved 10,816 hectares of planted oil palm area in East Kalimantan with a combined 231,255 tonnes of fresh fruit bunches production in 2019.  

TSH Resources’ wholly-owned subsidiaries TSH Global Plantation Pte Ltd and TSH Oversea Pte Ltd today entered into conditional sale and purchase agreements with Taiko Plantations Pte Ltd, an indirect wholly-owned subsidiary of KLK, for the disposal of their 90% stakes in PT Farinda Bersaudara and PT Teguh Swakarsa Sejahtera.

In a separate filing, KLK said Taiko Plantations will be buying the 90% stakes in the two palm oil companies for a collective US$110.1 million, which will be funded by a combination of the group’s existing cash reserves and bank borrowings.

Taiko Plantations will pay US$76.7 million for the stake in PT Farinda Bersaudara and US$33.4 million for the stake in PT Teguh Swakarsa Sejahtera.

The planted/plantable area of PT Farinda Bersaudara Land and PT Teguh Swakarsa Sejahtera Land totals 17,610 ha, which together with the planted area of KLK’s existing PT Putra Bongan Jaya estates at 10,000 ha, would make up a sizeable 27,600 ha, all located at the same place in Kutai Barat, and will allow for greater economies of scale and operational synergies, said KLK.

TSH Resources’ share price ended one sen or 1.01% lower at 98.5 sen today, valuing the group at RM1.36 billion.

KLK closed 16 sen or 0.7% lower at RM22.64, bringing it a market capitalisation of RM24.42 billion.

Year to date, TSH Resources has fallen 36% from RM1.54, while KLK has dropped 9% from RM24.80.

Edited by S Kanagaraju

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SEE_RESEARCH



Noted as one of the
MAIN CATALYST OF THIS SPECIAL GAIN;
WILL DRIVE TSH INTO an uptrend mode;
with panic & frenzy buying orders 

 


The group is expected to recognise one-off gain of 

 

RM104.3 millions 

 

in the 1QFY22

REMARKS

DO NOT MISS THE BIG SALMON ON

 

TSH/9059

 

for the current feasting. 

 

 

How to Reheat Salmon: 5 Best Methods - Recipe Marker

 

 

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TSH /9059

SEE_RESEARCH 

WAIT for strong rally  VERY SOON

 First target  ------  RM 1.50

Mid term target --RM 2.00

 

.Thanks for reading and see you in the next post.

THE ABOVE IS NOT A BUY OR SELL CALL AND IS ONLY A PERSONAL OPINION, WRITTEN AS ARTICLE FOR SHARING PURPOSES TO KLSE COMMUNITY MEMBERS.

 

DISCLAIMER: Investment involves risks, including possible loss of investment and other losses. 

This article and charts are provided for information only and should not be construed as a solicitation to buy or sell any of the instruments mentioned herein. The author may have positions in some of these instruments. The author shall not be responsible for any losses or profits resulting from investment decisions based on the use of the information contained herein. If investments and other professional advice is  required, the services of a licensed professional person should be sought.

  

 ISSUED BY SEE RESEARCH 

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(SENSING EAGLE EYES RESEARCH )

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Latest News Flash 

Caution continues to dominate

TheStar Sat, Sep 04, 2021 12:00am -  View Original


 

“Plantations stood out as all 11

 

 

stocks outperformed

 

 

 

 

 

“And so is plantation-

 

oil palm stocks are my choice.

 

 

Surpassing expectations: 

 

The plantation sector 

 

was the clear winner for the quarter under review, with most companies reporting profits that exceeded expectations thanks to strong average selling prices of CPO. — Bloomberg

THE recently concluded results season showed some sectors reporting profits exceeding or at least meeting with market expectations but on the whole, cautiousness continues to dominate going into the rest of the year, and even beyond.

The plantation sector was the clear winner for the quarter under review, according to Kenanga Research, with most companies reporting profits that exceeded expectations thanks to strong average selling prices of crude palm oil (CPO).

 

“Plantations stood out as all 11 stocks outperformed

 

our expectations except for IOI Corp Bhd and PPB Group Bhd that came in within and United Malacca Bhd that came in below expectations,“ it tells clients in a report.

“Against our estimates, the plantations sector had an overwhelming 73% of stocks surpassing expectations,” Kenanga says, adding that the other two sectors that surprised positively were utilities and healthcare while sectors leading the misses were construction, gaming and consumer.

The banking sector – always one to be watched – also did relatively well with no major negative surprises.

Some banks even declared dividends higher than what the market was anticipating.

Thomas Yong, CEO at Fortress Capital Asset Management, (pic below) opines that on the whole, second-quarter corporate earnings for Malaysia came in largely within expectations.

Fortres Capital Thomas YongsFortres Capital Thomas Yongs

“This is viewed positively considering the movement restrictions imposed as a result of the Covid-19 situation, as well as the political uncertainty.

“Overall, exporters benefited from external demand recovery but domestic-centric companies were affected by lower domestic consumption demand,“ Yong tells StarBizWeek.

He points out that risks associated with the banking sector were a concern for investors during the earlier part of the pandemic but so far, credit risks are perceived to have been well managed.

“Having said that, hiccups in delivering better earnings in the coming quarter due to the protracted movement restrictions are expected.

“In our view, the banking sector is a good proxy to any recovery of the broader economy going forward and the overall risk-reward profile is favourable, given the undemanding valuations of the sector,“ Yong adds.

For the coming year, he believes the technology sector would continue to do well due to favourable external semiconductor demand, particularly in the segments of 5G, electric vehicle and renewable energy.

That said, there could be some short-term disruptions due to chip shortages and logistic issues.

Meanwhile, in view of a higher rate of vaccination among regional countries going forward, he believes that a recovery of tourism-related sectors is possible, as countries are likely to adopt the “endemic approach” and open up their borders.

“In summary, the sectors which performed poorly in the recently-concluded results season might perform well due to pent-up demand when the Covid-19 outbreak is brought under control,“ says Yong.

For the second quarter, sectors that delivered poorer results were those hit hard by the movement restrictions including tourism, automobile, construction, retail and gaming.

“Technology and commodity sectors reported good earnings due to strong external demand and higher commodity prices,“ Yong adds.

Rakuten Trade Sdn Bhd head of equity sales Vincent Lau (pic below) notes that the recently concluded quarter saw better results compared to the quarter before.

Rakuten Vincent Lau cqRakuten Vincent Lau cq

“Banks, plantation, technology and semiconductor all performed better than expected while gaming, construction, automotive, retail and hospitality were impacted by the lockdowns,“ he says.

Lau believes that as the local economy gradually opens up, banks will continue to do better, being direct proxies of the economy.

“The worst is over for banks,“ he says.

To be sure, in their respective statements released last week, two of the country’s largest banks – Malayan Banking Bhd (Maybank) and CIMB Group Holdings Bhd – indicated that they were not overly optimistic in their outlooks.

Maybank group president and CEO Datuk Abdul Farid Alias in the lender’s statement said that given the expectations of a more challenging second half, the group would continue its strategy of focusing on robust risk management, strengthening its capital and growing its current account savings account (CASA) deposit base to provide sufficient buffers for unexpected events.

The lender, the larger of the top two, said given the prevailing challenging situation, it would continue with its preemptive provisions and management overlay largely due to the weakening macroeconomic outlook and the continued repayment assistance accorded to borrowers impacted by the pandemic.

CIMB Group was equally conservative in its outlook with group CEO Datuk Abdul Rahman Ahmad stating that the bank remained cautious “due to potential downside risks in the second half.“

“This is primarily due to the Covid-19 Delta variant, which has added to the uncertainty surrounding the opening of regional economies and economic recovery.”

The lender has consequently lowered its loan growth guidance to 2%-3% and expect provision levels to remain elevated, coupled with higher modification loss as it continues to provide repayment assistance to affected borrowers, it said.

Meanwhile, Rakuten’s Lau 

also picks the technology sector as a top choice moving into the next quarters.

 

“And so is plantation-

oil palm stocks are my choice. 

 

With CPO price remaining elevated, we will continue to see good results ahead,“ Lau adds.

 

He remains “cautiously optimistic” on the whole, cautioning that US markets, which are correlated to regional markets, are trading at all-time high levels.

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For September 2021 onwards to December 2021 

 

These are the 18 sectors in KLSE 

 

Total : 1,496 counters including call warrants , warrants 

 

 

1.  Consumer 

 2. Industrial 

3. Construction 

4. Finance 

5. Technology 

6.  Properties 

 

7. Plantations

 

8. Healthcare 

9. SPAC

10. Transportation 

11. REITS 

12. Closed - End Fund 

13. Exchange Traded Fund 

14. Telecommunication

15. Utilities 

16. Energy 

17. PN 17

18. LEAP Market 

 

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Kenanga ,

Kenanga Investment Bank Berhad (Kenanga IB)

is a Malaysian financial services company which provides investment banking, stockbroking and investment management services.

& 

 

Rakuten ,

Rakuten Trade Sdn Bhd (Rakuten Trade) is Malaysia's first fully online or digital equity broker.

Vincent Lau 

 

“And so is plantation-

 

Oil palm stocks are my choice.

 

 With CPO price remaining elevated, we will continue to see good results ahead,“ Lau adds.

He remains “cautiously optimistic” on the whole, cautioning that US markets, which are correlated to regional markets, are trading at all-time high levels.