Art of Investments


Publish date: Mon, 04 Apr 2022, 03:52 AM

The company is Teck Guan.

Teck Guan released their 4Q22 results last Thursday which stunned everyone. Below is the summary of their results:


Teck Guan achieved their highest quarterly profit in their history with an EPS of 42.98sen for the quarter. 

I have not seen any plantation company trading at a PE multiple of below 5x. But lets just use a very extreme PE of 3x for Teck Guan. With an annualised EPS of 171.9sen and PE of 3x, Teck Guan is valued at RM5.16. At the current share price of RM1.63 now, Teck Guan is trading at a PE multiple of 0.9x! This is so extreme given that Teck Guan is very similar to the other plantation giants such as Sime Darby Plantation, KLK and IOI because it has both upstream operations and downstream oleochemical plants. Having both upstream and downstream is a significant advantage because upstream will perform very well when palm oil prices are high while downstream will perform well when palm oil prices are low. It is a matter of time before the share price of Teck Guan increases significantly to catch up with the valuation of its peers.


Update 1: I just realised that Koon Yew Yin posted about this company. While I don't agree with 90% of his posts (you can see some of my previous posts which criticised his posts and motives), Teck Guan is in that 10% which I agree. I've seen some of the comments in his post saying that Teck Guan is a trading house with no palm oil plantation, profit was due to luck etc - that is extremely funny. A quick look at their assets will tell you that Teck Guan has both palm oil plantations and large oleochemical facilities in Sabah. In any case, it is not easy to make money in the stock market if everyone is well educated and well informed. It is people who post such comments that helps us to make money in the stock market.


Update 2: Share price is now RM2 now at 4.23pm, 4 April 2022. For those who bought from the panic sellers this morning who thought that the profit achieved this quarter was from luck, no dividend means share price will never rise etc, congratulations. I would recommend to take profit and not be greedy since share price has gone up by almost 50% over the past week and you can expect a correction. Nevertheless, those who bought at RM1.60+ this morning are sitting on 20%+ gains and is decent enough to take some profit.


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