SOS Read this before you INVEST in Stocks
SOS The secret of getting a CAGR of 20% p.a. for 10 years?
sosfinance
Publish date: Mon, 19 May 2014, 11:02 AM
sosfinance
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VALUATION DOES NOT DETERMINE THE PRICE, IT'S JUST A TOOL TO ESTIMATE A VALUE OF A BIZ
www.sosfinancialplanning.blogspot.my
"How do you save RM50,000? - I shared with a friend on how to do it. I got a term life for RM280 p.a covering RM100k until 70 years old. I cancelled my wholelife insurance of RM2,800 p.a. for the same coverage up to 100 years old. Save RM2500 p.a x 20 years = RM50,000. (PM0122037325)
.....IS THIS ARTICLE FAKE OR FACT?? ANYONE CAN CONFIRM?
www.sosfinancialplanning.blogspot.my
"How do you save RM50,000? - I shared with a friend on how to do it. I got a term life for RM280 p.a covering RM100k until 70 years old. I cancelled my wholelife insurance of RM2,800 p.a. for the same coverage up to 100 years old. Save RM2500 p.a x 20 years = RM50,000. (PM0122037325)
.....IS THIS ARTICLE FAKE OR FACT?? ANYONE CAN CONFIRM?
There are many good books on investments.
Teaching the basics 101 in investments are all there in the forum. Instead of doing that, those who has about 10-15 years horizon, and would like to have a 15%-20% p.a. CAGR, i.e. 6-15 folds of your investment, I recommend CBIP.
CBIP's market capitalisation today is RM1.189 billion. Give it 10 to 15 years, I think it can achieve about 6 fold from today, i.e. the market capitalisation in 2024, the market cap will be around RM7 - 8 billion. That means, put in 100k today, it will become about RM700k to RM800k in 10 years time.
Reason is simple, they are planning to plant 6000ha of palm oil over next 10 years. Total plantation in 10 years time will be 60,000 ha planted. By then, each ha will worth around say RM90,000 (based on an indexed inflation of CPO price of 6% and today's plantation worth about RM50,000 per ha with good management).
Plantation alone will be valued around RM5.4 billion (not many aware that CBIP has only planted 6000ha in 2013)
Existing business will be value around RM3.0 billon in next 10 years.
BASIS
From 2001 to 2013 (market capitalisation)
GENTING Plantation RM580m to 8200m (14 times)
KLK RM3.7bil to RM24.0bil (6.5 times)
UP RM500m to RM5.4bil (10.8 times)
Of course, not all plantation companies can do that. Only the well runned ones.
CONCLUSION
Instead of teaching you how to fish (which takes a long time and some of which cannot be taught, because, it s based on experiences and emotion), I give you the fish itself. Unlike Mr Koon, he has to justifiy to all the investors queries and some unwarranted remarks.
i provide a good fish called CBIP. Isn't it better?
However, make sure you have 10-15 years of horizon. I suggest you use your EPF money (accumulate this stock over time). If you need to know how, drop me a note, at sosfinance101@gmail.com.
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Discussions
Be the first to like this. Showing 18 of 18 comments
Yes, cost per ha is about RM16,000 - 19,500 per ha, spread over 3 years.
2014-05-20 08:04
their patents and technology interested me, the plantation plan also, but that will increase the capex and reduce FCF, have to research deeper to make sure they can be another GENP or KLK but not some so-so company lol
2014-05-20 08:45
Their existing business is construction and engineering biz in oil palm mil. They also manufacture vehicles for plantation uses. Yes, RHB mentioned about the patent renewal and pioneer status, else they will be taxed.
I am looking from a biz point of view, not as an analysts. They are planting 6000 ha p.a for the next 10 years. It will cause them RM1b - 1.4b. They will definitely require loan. As long as loan is used on a good assets (cash generating assets) it is fine. That's why I said 10-15 years, not one or two years. Analyst look at ONE year horizon, so, if your investment period is one year, please, do consult the analyst.
2014-05-20 09:17
sosfinance, thank you for the article that you wrote. I get to learn more in the counter CBIP that I have invested in. This investment will be for long term and I wont be selling regardless of whether the price is up or down. I believe in the management doing the right thing and hope to be rewarded in my selection.
2014-05-20 09:53
Yea I get what you mean, many companies' management always make promises to execute plans but not all of them get done. Not saying CBIP can't do what they say, if they can do 60,000 ha in 10 years, thats the perfect scenario, so just need to look at what are the potential downside that might prevent them from achieving that in the long term, like maybe cash, competition etc. If we invested in KLK or GENP since 2000, the CAGR today would be over 20% p.a.
2014-05-20 15:32
No doubt CBIP is a good company which i'm holding since 2.5 and will continue to hold and it will turn out like what you said. Thanks for sharing
2014-05-23 16:21
I look at CBIP as EXISTING BUSINESS (whatever it has up to 2013) and NEW POTENTIAL BUSINESS. Its existing business is doing well with double digit growth, mainly the downstream of palm oil biz. The NEW POTENTIAL BUSINESS is the upstream, cultivation of palm oil. But this is a very slow and long term biz. You may even want to wait a few years, until they have announced they have planted 30,000 ha before you buy this counter. At the moment, they planted only 6000 ha, another 4 years to go.
So, if you buy know, your focus will be on the EXISTING BUSINESS. So you have to evaluate the growth potential. As for the NEW POTENTIAL BUSINESS, if you like it, you can enter in 3-4 years time, it is going to be quite huge. So, during this 3-4 years time, if the CPO price is below say RM2300 per tonne, I believe you can accumulate safely, the growth of this palm oil will almost look exactly like TSH Resources today, 20% growth in CPO production for the following 3-5 years. TSH has grown from RM1.0b to RM2.5b in 2-3 years, share price from RM1.50 (2011) to today, RM3.50.
2014-07-07 09:36
VERY Good I definitely like CBIP in long term. And i like it very much and so much. WELL Be patient. Thanks.
2014-07-11 13:09
Better focus on palm oil companies with fast maturing acreages rather than be a VERY PATIENT VERY LONG TERM Investor!!
2014-07-11 15:04
Hei you Beach Boy, CBIP is my upcoming Bikini girl in big blue ocean.
2014-07-11 15:37
I like the way you say it anyway. VERY PATIENT VERY LONG TERM. It suits me.
2014-07-11 15:55
Better chat up your bikini girl and perform an objective evaluation vide warren's methodology assessment on determining her "undervalued assets" before deciding to be very patient long term investor. Perhaps you may consider the option of a "fundamental trade whilst u r swimming in the deep blue ocean." HAHAHAHAHAHA
2014-07-11 16:36
well i c all fundamentals are solid solid what? Only what price should i pay? slightly below Rm4 is good enough i guess.
2014-07-11 16:51
i really recommend you to marry this bikini girl, CBIP. I am sure you will be happy and thanks me after 10-15 years.
2014-07-11 16:58
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Hi Sos, I read on the The Edge that an average per ha require a cost of RM19,500 to plant, 6000ha a year means RM117 million. CBIP would not have such a money or free cash flow of that huge right?
2014-05-20 07:27