THE INVESTMENT APPROACH OF CALVIN TAN
FGV IS VERY UNDERVALUE. THE INTRINSIC VALUE OF FGV PROVES IT (FELDA GLOBAL VENTURE) (5222) Calvin Tan Research
calvintaneng
Publish date: Wed, 14 Apr 2021, 06:32 AM
calvintaneng
0 1,801
Hi Guys,
I have An Investment Approach I which I would like to all.
I have An Investment Approach I which I would like to all.
Dear Friends
Last post we mentioned FGV Assets are Far Superior Than Wilmar
Now let us do a Simple Calculation of FGV Intrinsic Value
Everything in the Supermerket has a Value
To see how much you pay for the meat, fish, vegetables, nuts, rice, flour or all other foods there is a Weighing Scale
See
SO IS FGV
Now let us see its latest Qtr Result
SUMMARY OF KEY FINANCIAL INFORMATION
|
|
INDIVIDUAL PERIOD
|
CUMULATIVE PERIOD
|
||||
|
CURRENT YEAR QUARTER
|
PRECEDING YEAR
CORRESPONDING QUARTER |
CURRENT YEAR TO DATE
|
PRECEDING YEAR
CORRESPONDING PERIOD |
||
|
31 Dec 2020
|
31 Dec 2019
|
31 Dec 2020
|
31 Dec 2019
|
||
|
$$'000
|
$$'000
|
$$'000
|
$$'000
|
||
| 1 | Revenue |
4,008,806
|
3,154,349
|
14,075,712
|
13,259,012
|
| 2 | Profit/(loss) before tax |
315,157
|
51,224
|
337,195
|
-345,225
|
| 3 | Profit/(loss) for the period |
188,066
|
49,142
|
138,778
|
-371,156
|
| 4 | Profit/(loss) attributable to ordinary equity holders of the parent |
134,927
|
71,806
|
150,020
|
-246,174
|
| 5 | Basic earnings/(loss) per share (Subunit) |
3.70
|
2.00
|
4.10
|
-6.70
|
| 6 | Proposed/Declared dividend per share (Subunit) |
0.03
|
0.00
|
0.03
|
0.00
|
|
AS AT END OF CURRENT QUARTER
|
AS AT PRECEDING FINANCIAL YEAR END
|
||||
| 7 | Net assets per share attributable to ordinary equity holders of the parent ($$) |
1.1700
|
1.1400
|
||
From the above we see the NAV (Net Asset Value) of FGV is Rm1.17
But that is based on lands not revalued or updated for many decades
And the Book Value per acre only Rm3,150 per acre
Now we know by now FGV total top 10 Assets
1,013,317 ACRES
Recent land sales in Malaysia
1) KUB sold Sabah Oil palm lands to Tradewind Rm26,000 per acre
2) Scientex bought lands in Tasek Gelugor (Penang mainland) Rm718,804 per acre
3) Syed Moktar sold Senai lands for Rm2 Million per acre
So we if we take the lowest recorded Lands sales of Sabah which is Rm26,000 per acre
Then we mutiply
1,013,317 acres by Rm26,000
= Rm26,346,242,000 (About Rm26.3 BILLIONS)
What is the Cash Value?
The formula is this
Rm26,346,242,000 divides by Rm134,927,000 then multiply by 3.70 sen
= Rm7.22 CASH
So the Revised NAV of FGV should be Rm7.20
Of course if there is a liquidation sale we should take off 40%
So Rm7.22 x .6 = Rm4.33
Is Rm4.33 the lowest intrinsic value of Fgv?
Now many of Fgv lands are located in Prime Areas and Cities & Towns have grown and expanded to reach them by now
Can we take Penang land value of Rm718,804 per acre (or about Rm16.50 psf based on 1 acre of 43,560 sq ft)?
If so
Then Multiply 1013317 by 718,804 =
Rm728,376,312,868 (About Rm728 BILLIONS)
And how Much Cash Value
Again same fomula
Rm728,376,312,868 divides by Rm134,927,000 multiply by 3.70 sen
= Rm19.97 Cash per Share
And if we take off 40% Discount for Quick Sale
= Rm11.98 Per share intrinsic value
So the Intrinsic value of FGV should range between Rm4.33 to Rm11.98
At Rm1.30 Takeover price by Felda is deemed too undervalue & looks totally unfair to share holders
No wonder the BOD (Board of Directors) in their conscience told share holders to reject the privatisation Offer of Rm1.30
Since MGO has lapsed we will see by August 3rd 2021 when Felda will have to either forgo privatisation or raise MGO price to a more fairer value
In time past
Karambunai offered to take private at 55 sen but was rejected. The final offer of 11 sen (Up 100%) was happiy accepted
Further back was KAF privatisation price of Rm1.30 was also rejected and then KAF revised offer up by 100% to Rm2.60 which was accepted
Will FGV revise Offer Price higher?
If higher then by how much?
Now that the wind of fortune is blowing favourably due to Cpo, Sugar & Rubber at all time high it behoves FGV to counter offer with a better price for a Win - Win Settlement
Kindest Regards
Calvin Tan Research
This is not a buy or sell call. This is an Ongoing Case Study of Malaysia's Most UNDERVALUE Valuable Plantation Stock ever
PLEASE NOTE: After Posting we received feed back comments below
lksiam As per 30/3/21, "With FELDA holding 80.99% and the Pahang government controlling 5%, FGV’s free float is now about 14%"
Be sure you are clear of what FELDA with 81% can do even though privatisation attempt failed. For example, they can pass any resolution (good or bad) without obstruction.
For CalvinTan or any other so called sifu/analyst, trust 50% of their words is enough. haha... Do your own homework and know your own position e.g holding power.
Be sure you are clear of what FELDA with 81% can do even though privatisation attempt failed. For example, they can pass any resolution (good or bad) without obstruction.
For CalvinTan or any other so called sifu/analyst, trust 50% of their words is enough. haha... Do your own homework and know your own position e.g holding power.
14/04/2021 8:14 AM
Yes Felda now controls about 80% of FGV shares. But Felda cannot do a Compulsory privatisation as it failed to secure 90% or more of FGV shares and be delisted from KLSE
As such Felda is subjected to all the Rules & Regulations of Bursa.
Every major decision will still need to notify Bursa as well as share holders
So it is better to stay listed. If Felda wants to take it private then it must Make a Fair & Reasonable Final Offer
emsvsi Cover Story: Questions over FELDA’s plans for FGV
Jose Barrock | The Edge Malaysia
December 24, 2020 14:00 pm +08
"For instance, FGV, via a land lease agreement (LLA) with FELDA, controls and operates 350,733ha of plantations owned by FELDA, for a 99-year tenure starting from Nov 1, 2011. FGV on its own has 88,497ha of plantation land and 68 palm oil mills, parked under FGV Palm Industries Sdn Bhd."
Full article: https://www.theedgemarkets.com/article/cover-story-questions-over-feld...
Jose Barrock | The Edge Malaysia
December 24, 2020 14:00 pm +08
"For instance, FGV, via a land lease agreement (LLA) with FELDA, controls and operates 350,733ha of plantations owned by FELDA, for a 99-year tenure starting from Nov 1, 2011. FGV on its own has 88,497ha of plantation land and 68 palm oil mills, parked under FGV Palm Industries Sdn Bhd."
Full article: https://www.theedgemarkets.com/article/cover-story-questions-over-feld...
14/04/2021 9:59 AM
Yes, Felda has leased Lands to FGV for a period of 99 years. In Indonesia where Wilmar operates land lease is even shorter from 60 years and less.
FGV has stated that it has added Value to the Lands by Replanting old Oil Palm trees over the years at Substantial Costs Plus it has built 68 Millions worth Rm60 millions each (Total Rm4.08 Billions worth
FGV has its own Lands about 88,497 hectares or 218,676 acres
Now if we take Rm500,000 per acre cost or Rm11.47 per sq ft
It will be
88,497 x Rm500,000
= Rm44,248,500,000 (About Rm44.2 Billions)
To get the Cash Value
Rm44,248,500,00
divides by Rm134,927,000 then multiply by 3.70 sen
= Rm12.13 Per Share
So no matter how you calculate FGV still got high instrinsic value
lksiam As per 30/3/21, "With FELDA holding 80.99% and the Pahang government controlling 5%, FGV’s free float is now about 14%"
Be sure you are clear of what FELDA with 81% can do even though privatisation attempt failed. For example, they can pass any resolution (good or bad) without obstruction.
For CalvinTan or any other so called sifu/analyst, trust 50% of their words is enough. haha... Do your own homework and know your own position e.g holding power.
Be sure you are clear of what FELDA with 81% can do even though privatisation attempt failed. For example, they can pass any resolution (good or bad) without obstruction.
For CalvinTan or any other so called sifu/analyst, trust 50% of their words is enough. haha... Do your own homework and know your own position e.g holding power.
14/04/2021 8:14 AM
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Discussions
2 people like this. Showing 15 of 15 comments
Cover Story: Questions over FELDA’s plans for FGV
Jose Barrock | The Edge Malaysia
December 24, 2020 14:00 pm +08
"For instance, FGV, via a land lease agreement (LLA) with FELDA, controls and operates 350,733ha of plantations owned by FELDA, for a 99-year tenure starting from Nov 1, 2011. FGV on its own has 88,497ha of plantation land and 68 palm oil mills, parked under FGV Palm Industries Sdn Bhd."
Full article: https://www.theedgemarkets.com/article/cover-story-questions-over-feldas-plans-fgv
2021-04-14 09:59
FGV does not actually 'own' the lands
And you should not use the word intrinsic value when you obviously know nothing of what it means
2021-04-14 10:00
So does Felda ..they don't own the land either. Both FGV and Felda are just the care takers. Bottom line, they still own the land..
The point Calvin at current price at RM 1.37 is way below it's fair value.
With current CPO Prices it should be back to IPO level pretty soon provided this couple (FGV and Felda) are back in bed..
Government should play match makers to get both of them in bed so that both can Meow whole night
CPO is too good to play Cat and Mouse...
Meow
2021-04-14 10:19
emsvsi
The contract states Fgv owns the lands for 99 years which is far better than Wilmar and others in Indonesia which only own for less than 60 years lease
In any case Fgv got long term rights of almost 100 years plus it has
1. Replanted lots of New oil palms over the 8 years
2. Built 60 mills worth Rm60 millions each
3. Felda also got its own lands at rock bottom prices at Rm3150 per acre book value as well in Kulai, Tebrau and Tanjung langsat Industrial parks and others worth many billions on its own
2021-04-14 10:36
I only calculate with the lowest Rm26,000 per acre
If we take Rm1 million to Rm2 million per acre for Fgv own lands they also add up to a substantial figure
2021-04-14 10:39
Please avoid FGV for the coming quarter result:
1. Significant drop in CPO exports for Jan & Feb figures
2. Reinstatement of 8% export tax on CPO selling price
In additional, please exclude MSM profit contribution for Q2 & Q3 due to plant closed down. Loss contribution is highly likely.
2021-04-15 12:51
Must keep this in view
1. Fgv March Ffb, cpo have jumped up by 30% gain compared to Feb 2021
April onward will be even more excellent
2. Cpo now over Rm4200 compare to below Rm4k
3. Msm share price has gone up from 55 sen to as high as Rm2.00 for more than 200% upside
So one or two months don't impact too much on bottom line
Fgv stands to gain over Rm350 millions from Remeasurement gain of Msm
Last time Drb share price jumped from 90 sen to Rm2.70 due partly from Remeasurement gain from POS
So all in all Fgv should see much better times ahead
Felda is rushing to take it private must now give a much higher price compared to Ipo of over Rm4.00
2021-04-15 13:22
Hmmm
Wait 5 years to get Rm4.00?
Let's see
FGV now Rm1.50
In five years FGV Rm4.50
That means in 5 years FGV gain Rm3.00
Or 60 sen per year
60/Rm1.50 is 40% a year
OKOK
I won't mind to buy FGV at Rm1.50 and get 40% yield every year for the next 5 years
THIS IS BETTER THAN PUTTING MONEY IN BERKSHIRE HATHAWAY!
SO HAPPY!!
2021-04-15 20:38
Correction
FGV is now Rm1.35 and not yet Rm1.50
Hmmm?
So cheap???
Sure worth buying more!
2021-04-15 20:41
Not only Fgv. I once warned about Mnrb because it has Rm300 million expense that looked fishy
And Mnrb crashed to the low of 50 sen
But it recovered and price has now more than doubled
Since the previous leadership of Fgv are now under lawsuit there is a chance that Fgv is being cleaned up like Mnrb
2021-04-15 22:43
FGV is not undervalued.
In fact, it has NO VALUE!
This stock belongs to the thrash bin.
2021-04-16 13:19
Excellent news
66 FGV Palm oil Mills gone High Tech
https://www.nst.com.my/business/2021/04/682878/66-out-67-fgv-palm-oil-...
2021-04-16 22:29
Another Income booster for FGV is the price surge of Palm kernal cake due to costly animal feed like Sorghum See https://www.agweb.com/news/crops/crop-production/new-crop-sorghum-surp...
2021-04-16 22:30
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lksiam
As per 30/3/21, "With FELDA holding 80.99% and the Pahang government controlling 5%, FGV’s free float is now about 14%"
Be sure you are clear of what FELDA with 81% can do even though privatisation attempt failed. For example, they can pass any resolution (good or bad) without obstruction.
For CalvinTan or any other so called sifu/analyst, trust 50% of their words is enough. haha... Do your own homework and know your own position e.g holding power.
2021-04-14 08:14