Wealth Creation
CAB CAKARAN: Something Big Is Coming in Poultry Industry (Part 2) (WealthWizard)
WealthWizard
Publish date: Mon, 27 Mar 2017, 04:36 PM
WealthWizard
0 9
All the working, calculation & assumptions are presented based on my personal own judgement & findings, and are for sharing purposes only.
I never think I can move anything unless the thing want to move by itself.
Do your homework, read all news/reports, make your best judged assumptions & understand the business before invest any company.
Invest with FREE money only, using emergency fund to invest is gambling, crazy & suicide act.
My email: wealthwizard.invest@gmail.com
I never think I can move anything unless the thing want to move by itself.
Do your homework, read all news/reports, make your best judged assumptions & understand the business before invest any company.
Invest with FREE money only, using emergency fund to invest is gambling, crazy & suicide act.
My email: wealthwizard.invest@gmail.com
Part 1: CAB CAKARAN: Malaysia Broiler/Chicken Giant in Making
Part 2: CAB CAKARAN: Something Big Is Coming in Poultry Industry
Part 3: CAB CAKARAN: Achievable Target price = RM3.09?
This part will discuss on the factors that affecting the company & the industry
1. Broiler ex-farm price
2. Poultry feed price
3. US currency movement
4. Poultry industry & production growth
5. CAB Cakaran & other competitors
6. Capital management & Production Efficiency of CAB
1. Broiler ex-farm price & average selling price of CAB
Broilers are controlled items in Malaysia & broilers' selling prices are therefore pre-determined by the Government from time to time. As such, it is important to know the relationship between the selling price & the profit performance of respective companies.
Based on the prices listed at table below, the broilers' selling price were higher in Jan to March 2017, my calculation of average selling price is RM5.15.
Source: http://www.dvs.gov.my/index.php/pages/view/440
This is in line with the comment from the management in the latest quarterly report:
2. Poultry feed price
Prices of feed ingredients, especially maize and soya, accounted for 70% of the production cost.
The management has said below:
But it is interesting to know the prices of both Corn & Soybean in the table below:
Click here for US Corn Price Chart & SoyBean Price Chart
3. US currency movement
Ringgit Malaysia has been staple against US Dollar:
4. Poultry industry & production growth
Thanks to donkeystock.biz, the infographic below helps to make easier understanding on how a poultry is run.
According to a report titled "Review of Domestic Broiler Market" (page 11), it is learnt that CAB Breeding Farm Sdn Bhd, a 100% owned subisidary of CAB, is one of the only 4 grandparent stock poultry farmers in Peninsular Malaysia.
5. CAB & other competitors
Except Leong Hup which was delisted in 2012 & lack of relevant financial information, the following are the comparison among 4 public listed companies in Bursa:
Sources: quarterly reports of respective companies at Bursa Website
6. Capital management & Production Efficiency of CAB
Net Debts Over Equity Ratio
The Company has agressively expanding its farming assets via internally generated funds & borrowings. However, the net debts ratio has indeed been dropped from 92% (31/12/2015) to 65% (31/12/2016).
ROE
The agressive expansion has contributed positively to the shareholders' return and it proved that every ringgit reinvested brought greater return over time.
Stock Turnover (Months)
CAB has maintained one of the best stock turnover ratio among all poultry farmers, its stock value was almost HALF of its monthly sales only.
Receivables over Sales (Months)
CAB has maintained very tight credit control over its receivables and the average receivables turnover is only about 1.3 months.
ALL THE ABOVE POINTED TO ONE DIRECTION FOR CAB CAKARAN, SOMETHING BIG IS COMING.
I will share my profit projection, basis & assumptions used in my next article, Part 3. Thank you for reading.
Related Stocks
| Chart | Stock Name | Last | Change | Volume |
|---|
More articles on Wealth Creation
CAB CAKARAN: Achievable Target price = RM3.09? (Part 3) (WealthWizard)
Created by WealthWizard | Apr 06, 2017
CAB CAKARAN: Malaysia Broiler/Chicken Giant in Making (Part 1) (WealthWizard)
Created by WealthWizard | Mar 21, 2017
EKOVEST: The Next Big Thing & Great Upside Potential (+84%) (Part 3).
Created by WealthWizard | Oct 07, 2016
EKOVEST: Net Debt Ratio=20% & Net Cash Per Shares=RM1.01 (after 40% sale in Kesturi) (Part 2)
Created by WealthWizard | Sep 26, 2016
EKOVEST: Doing Great & Ready To Shine, Are You Ready? (Part 1)
Created by WealthWizard | Sep 23, 2016
Flying CRC Steel Producers: Fantastic Business Outlook & Insider's Look (Part 3)
Created by WealthWizard | Sep 12, 2016
Huge Potential Upside for CRC Steel Producers: CSCSteel (+24%) & Mycron (+90%) (Part 2)
Created by WealthWizard | Sep 06, 2016
Bright Future for CRC Steel Producers: CSCSteel, Mycron, Eonmetal & YKGI (Part 1)
Created by WealthWizard | Sep 05, 2016
Discussions
13 people like this. Showing 50 of 69 comments
In the article & on No.5. CAB & other competitors, CAB has outpaced others in terms of revenue & improvement in profit margin
2017-03-27 21:50
The stock to sales ratio is just unbelivably low, it means the operations are running very efficient & effective.
2017-03-27 21:51
Debts collection is also very good, it's only about 1.3 months period, it means the company has done very well in credit control.
2017-03-27 21:52
Assets & loans increased but ROE improved, I agreed to statement by WealthWizard:
"every ringgit reinvested brought greater return over time"
2017-03-27 21:55
I am curious on the stagnant production growth for the past few years.
The management has said that acquisition of poultry farms from Farm's Best will give increase 30% production for CAB, it is very interesting.
2017-03-27 21:59
Defensive & yet good potential, thumbs up to WealthWizard!
-----------------------------
WealthWizard
I hope to share a company that is defensive in nature (basic food business) & yet possess potential & capacity to grow.
27/03/2017 19:31
2017-03-27 22:07
the wealth guy started a run on steel counters last year.
the same wealth guy to start a run on poultry farms by his efforts ?
2017-03-27 22:08
Finally part 2, thank you, wealthwizard sifu! Look forward to read part 3.
2017-03-27 22:23
WealthWizard, what is the impact of bird flu (H5N1) epidemic to CAB if it cannot be contained within Kelantan?
2017-03-27 22:31
VenFx, thanks for your response but my question is more toward what is the impact to consumer confidence to eat poultry if H5N1 become big issue. Does it impact the revenue/profit of CAB?
2017-03-27 22:50
Chicken Feed is the highest in the broiler. Hopefully higher chicken prices and and higher demand already can cover this expenses.
2017-03-27 22:56
No mood to read yet, but well written, keep it up.
Feed prices has been increasing in the last few months. But it doesn't matter.
In Abdullah's time, farmers were given subsidy to prevent price hike. Najib cancelled it (along with every other subsidies and charge everyone 6% instead, how sad). Now farmers are charged with 6% extra for feed. Most smaller farmers are dead. Plus Thailand has problems (no water, no raw material) these few years (and getting severe), so less/no smuggling.
Anyway, we are seeing consolidation in the chicken market is done, and it is a producer's market now.
Those who spotted CAB are really champions, congratulations! You read the market with numbers. Geng!
見微知著！
2017-03-28 05:17
Rome doesn't built overnight! The new emerging of CAB had taken place since the past several years.
Aiming for.....new historical upside !
2017-03-28 08:25
ambitious management,expect company to continue grow the company into a giant
2017-03-29 09:27
For a growth stock, CAB-wa is too cheap, -ve premium with acceptable gearing
2017-03-29 09:28
to add more spices...
the company was in progres to build new farm at jalan kubang ulu, seberang perai.
2017-03-29 16:41
Thanks, Joe79, the company has registered increase in assets in last 2 quarters, guess they are expanding internally, but no details can be found in the news or quarterly reports.
2017-03-29 22:34
moneysifu, confirmed they are expanding. they had submitted application for a new electrical substation for a new farm at seberang perai.
2017-03-30 15:26
Hi all, I am a beginner here. Wondering if i could still buy at current price? And will the price still shoot up when the author part 3 coming out? Thanks
2017-03-31 11:36
No one can guarantee that, Hao1983, may be you can read all previous articles from WealthWizard & stocks' prices to judge
2017-03-31 11:38
Good comment
Posted by 张天师买股票 > Mar 23, 2017 07:30 AM | Report Abuse
CAB雄踞北方，之所以要买FARM BEST就是看中他们在南方的市场强大占有率，买下FARM BEST能让CAB在全马各地都有肉鸡生产地，就算吉兰丹有传禽流感，也不会影响其他的鸡场。
CAB也逐步建立关闭式的养鸡场来应对。
2017-03-31 13:25
Post a Comment
Featured Posts
MQ Trading Signals
Time
Signal
Duration
Type
2024-04-25 16:50:00
EMA 5
5 Mins
SELL
2024-04-25 16:40:00
EMA 5
5 Mins
BUY
2024-04-25 16:20:00
EMA 5
10 Mins
SELL
2024-04-25 16:20:00
OBV
10 Mins
SELL
2024-04-25 16:20:00
EMA 5
5 Mins
SELL
Apps
Top Articles
1
Good Articles to Share
Malaysia in Talks With Tycoons on Casino to Revive $100 Billion Forest City
2
4
5
6
save malaysia!
7
Alphabulltrading
8
THE INVESTMENT APPROACH OF CALVIN TAN
#
Stock
Score
Daily Stocks
Stock Name
Last
Change
Volume
Stock Name
Last
Change
Volume
Stock Name
Last
Change
Volume
Featured Advertisers / Partners
Ride The Bull Short The Bear
CS Tan
4.9 / 5.0
This book is the result of the author's many years of experience and observation throughout his 26 years in the stockbroking industry. It was written for general public to learn to invest based on facts and not on fantasies or hearsay....
musangfoxking
1047 days to maturity!Quik Quik buy warrant!!!
2017-03-27 19:49