THE INVESTMENT APPROACH OF CALVIN TAN
CALVIN TAN ON: THE INTRINSIC VALUE OF TSH RESOURCES
calvintaneng
Publish date: Sun, 15 Aug 2021, 09:24 PM
calvintaneng
0 1,799
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 Investors & Traders of i3 Forum (Pease read to the very end as we are typing now from Singapore)
Many have wondered why we are bullish on Tsh Resources after IjmPlant was taken over by KLK at Rm3.10
Many do superficial reading on TSH NAV to be only Rm1.06 and price now at Rm1.04 to be not worth much
See what people see below
UMMARY OF KEY FINANCIAL INFORMATION
|
|
INDIVIDUAL PERIOD
|
CUMULATIVE PERIOD
|
||||
|
CURRENT YEAR QUARTER
|
PRECEDING YEAR
CORRESPONDING QUARTER |
CURRENT YEAR TO DATE
|
PRECEDING YEAR
CORRESPONDING PERIOD |
||
|
31 Mar 2021
|
31 Mar 2020
|
31 Mar 2021
|
31 Mar 2020
|
||
|
$$'000
|
$$'000
|
$$'000
|
$$'000
|
||
| 1 | Revenue |
198,717
|
209,144
|
198,717
|
209,144
|
| 2 | Profit/(loss) before tax |
21,023
|
6,200
|
21,023
|
6,200
|
| 3 | Profit/(loss) for the period |
26,448
|
7,952
|
26,448
|
7,952
|
| 4 | Profit/(loss) attributable to ordinary equity holders of the parent |
20,783
|
2,254
|
20,783
|
2,254
|
| 5 | Basic earnings/(loss) per share (Subunit) |
1.51
|
0.16
|
1.51
|
0.16
|
| 6 | Proposed/Declared dividend per share (Subunit) |
0.00
|
0.00
|
0.00
|
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 ($$) |
1.0644
|
1.0531
|
||
A careless perusal will show only Rm1.06 NAV
But Dig Deeper
How?
You must compare Apple with Apple & Orange with Orange
Now See IJM PLANT NAV Below
SUMMARY OF KEY FINANCIAL INFORMATION
|
|
INDIVIDUAL PERIOD
|
CUMULATIVE PERIOD
|
||||
|
CURRENT YEAR QUARTER
|
PRECEDING YEAR
CORRESPONDING QUARTER |
CURRENT YEAR TO DATE
|
PRECEDING YEAR
CORRESPONDING PERIOD |
||
|
31 Mar 2021
|
31 Mar 2020
|
31 Mar 2021
|
31 Mar 2020
|
||
|
$$'000
|
$$'000
|
$$'000
|
$$'000
|
||
| 1 | Revenue |
246,381
|
195,393
|
935,693
|
739,133
|
| 2 | Profit/(loss) before tax |
60,411
|
-73,438
|
272,129
|
-50,472
|
| 3 | Profit/(loss) for the period |
60,104
|
-86,273
|
215,007
|
-72,979
|
| 4 | Profit/(loss) attributable to ordinary equity holders of the parent |
57,417
|
-76,387
|
205,083
|
-63,423
|
| 5 | Basic earnings/(loss) per share (Subunit) |
6.52
|
-8.67
|
23.29
|
-7.20
|
| 6 | Proposed/Declared dividend per share (Subunit) |
10.00
|
2.00
|
10.00
|
2.00
|
|
AS AT END OF CURRENT QUARTER
|
AS AT PRECEDING FINANCIAL YEAR END
|
||||
| 7 | Net assets per share attributable to ordinary equity holders of the parent ($$) |
1.6300
|
1.3500
|
||
As you can see above IJMPLANT NAV IS ONLY RM1.63
THEN WHY SHOULD IJMPLANT BE WORTH RM3.20 (RM3.10 Plus 10 Sen Dividen) WHEN KLK OFFERED
RM1.63 NAV & TAKEOVER OFFER IS RM3.20 (Or 96% Above Net Asset Value??)
Now we think TSH & IJMPLANT Are Very Similar in their Assets & Earnings
Both TSH & IJMPLANT Estates are Located in Sabah, Kalimantan & Sumatra
Since they go over to Indonesia they stay close to each other. Just as in early times from China Coastal Cities arrived early Immigrants to Malaya & stayed in coastal Towns like Penang, Kelang & Johor (Just check: these speak the Hokkien Dialects)
Later in year 1848 Long Jaffar founded Tin in Larut & also the Sungai Besi Tin Mines in KL. These drew in Chinese from Guandong who are more business minded. Today the Chinese of Klang Valley (KL) & Kinta Valley (Ipoh) Speak the Cantonese Dialect
The Indians also congregated in Brickfields, Sentul & the Little India of Singapore.
The British?
They liked cooler mountain airs so they named Cameron Highland, Maxwell Hill, Fraser Hill & others.
Port & States were called Port Swettenham (today Port Klang), Province Wellesley (Now Prai)
And so are TSH & IJMPLANT & KLK & WILMAR (They cluster around)
So if IJMPLANT is worth 96% more then can we value TSH Rm1.04 X 96% more
or Rm2.03
Is the Intrinsic Value of TSH Rm2.03 then?
Ok we dig deeper and further
2) When TSH Disposes Assets only then We see its Real Value Surface
Recently TSH sold 2 Palm Oil Estates
Let's go check them up
The Board of Directors of TSH (“Board”) wishes to announce that TSH and its 2
wholly-owned subsidiaries, namely TSH Palm Products Sdn. Bhd. and TSH Plantation
Sdn. Bhd. had on 6 July 2021, entered into the following respective sale and purchase
agreements with Sharikat Keratong Sdn. Bhd. (“SKSB” or “Purchaser”):
(i) Sale and Purchase Agreement between TSH and SKSB (“SPA 1”) for the
proposed disposal of the oil palm plantation land measuring approximately
2,489 acres together with all the oil palms, estate office, living quarters/houses,
structure, tractors, estate equipment, and furniture thereat, known as Ladang
Gomantong, for a cash consideration of RM76 million (“Disposal Consideration
1”);
(ii) Sale and Purchase Agreement between TSH Palm Products Sdn. Bhd. (“TSHPP”)
and SKSB (“SPA 2”) for the proposed disposal of the oil palm plantation land
measuring approximately 4,942 acres together with all the oil palms, estate
office, living quarters/houses, structure, tractors, estate equipment, and
furniture thereat, known as Ladang Ong Yah Ho, for a cash consideration of
RM152 million (“Disposal Consideration 2”); and
- and
- Sale and Purchase Agreement between TSH Plantation Sdn. Bhd. and SKSB for the proposed disposal of 1 palm oil mill equipped with plant and machinery, together with furniture, vehicle and heavy machinery known as Lahad Datu Palm Oil Mill for a cash consideration of RM20 million.
Ok we SEE two pieces from above are disposed
Let's go check up the Top 10 Properties of TSH (refer to AR or Annual Report)
Wow! the 2,489 acres sold for Rm76 millions is a surprising discovery! This is not listed in Top Ten as it is only a smaller piece. So suddenly appeared with a Cash windfall revealed as worth Rm76 Millions (Don't forget that TSH took Ekowood Private & TSH also Top 2nd Holder of Innoprise. TSH also got Rm400 Millions worth of bilogical assets. That is why TSH stands for Treasure Safely Hidden
Ok (Please see AR Top 7 Properties of TSH)
It is listed with Assets Book Value of Rm102,916,131 or nearest decimal Rm102.92 Millions
Ok now deduct from Sale Price
Sale total Rm152 Millions & Mills Rm20 Millions = RM172 MILLIONS
So Rm172 MILLIONS less Cost Rm102.92 MILLIONS
= RM69.08 MILLIONS
How many percent up?
Rm69.08 mil divides by Rm102.92 = 67.12% Upside
Now if we multiply NAV of Rm1.06 by 67.12%
The NAV will be Rm1.77
That is NET ASSET VALUE ALONE
What if we should include two Companies (Ekowood - taken private & Innoprise still listed) & the 200,000 Acres of Forest Concession, Biomass Energy, Cocoa Business, Paper Pulp & above all The Palm OIl Refinery 50/50 J/V with Wilmar in Sabah?
Easily over Rm2.00 value
Ok now we go and see its historical price
3) TSH & IJMPLANT GOES UP IN GOOD AND BAD TIMES TOGETHER
See Their Price History
See IJMPLANT Price history
YEAR...LOWEST PRICE...HIGHEST PRICE
2004..Rm1.00........Rm1.40
2005...0.91.........Rm1.20
2006..Rm1.02........Rm1.66
2007..Rm1.36........Rm3.25
2008..Rm1.19........Rm4.01
2009..Rm1.81........Rm2.89
2010..Rm2.36........Rm3.14
2011..Rm2.38........Rm3.24
2012..Rm2.63........Rm3.77
2013..Rm2.75........Rm3.62
2014,,Rm3.11........Rm4.03
As you can see both in Years 2008 & 2014 IjMPLANT CROSSED THE RM4.00 MARK
NOW JUST AS IJMPLANT CROSSED RM4.00 IN GOOD YEARS TSH RESOURCES SHARE PRICE ALSO CROSSED RM4.00 JUST LIKE IJMPLANT DID THEN
See
TSH RESOURCES PRICE HISTORY
YEAR....LOWEST PRICE...HIGHEST PRICE
2004.....0.45.................1.01
2005....0.63..................1.05
2006....0.60..................1.05
2007....0.77..................1.65
2008....0.55..................1.94
2009....0.66...................1.00
2010....0.84...................1.46
2011....1.33...................2.04
2012....1.87...................2.87
2013....2.05...................3.13
2014....2.72...................4.00
So in year 2014 when IJMPLANT was Rm4.03 TSH RESOURCES SHARE PRICE ALSO REACHED RM4.00
THAT IS WHY THERE IS A HIGH POSSIBILITY TSH RESOURCES SHOULD REACH RM2.00 IN THIS COMING PALM OIL BULL RUN & CAN ALSO GO UP HIGHER
KLK HAS TAKEN OVER IJMPLANT AT RM3.20 (ITS PEAK CYCLE REACHED RM4.00)
TSH ALSO REACHED RM4.00 AT PEAK CYCLE
BUT WHY DO WE NOT ASSIGN TSH AS SAME WITH WITH IJMPLANT AT RM3.20 INTRINSIC VALUE
WHY ONLY RM2.00?
ANSWER:
BECAUSE TSH GAVE ONE FREE BONUS FOR TWO SHARES HELD WHILE IJMPLANT DID NOT
SO WE THINK RM2.00 IS A VERY FAIR INTRINSIC VALUE FOR TSH AT THE VERY LEAST
Best Regards
Calvin
Please buy or Sell After doing your own due diligence. Or consult your Remisier/Fund Manager
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Dear Friends, Investors & Traders of i3 Forum
This evening please go we shall look at the Biological Assets of TSH
Please go see Bursa report of all latest Qtr Results of each and SEE for yourselves
1) SIME DARBY PLANTATION
Biological assets...........Rm290 Millions
2) FGV
Biological assets............Rm101 Millions
3) TAANN
Biological assets...........Rm122 Millions
4) TSH RESOURCES
Biological assets...........Rm408 Millions
5) JAYA TIASA
Biological assets..........Rm65 Millions
6) THPLANT
Biological assets.........Rm56 Millions
7) BPLANT
Biological assets........Rm35 Millions
8) HAP SENG PLANT
Biological assets.........Rm40 Millions
As you can see from the above TSH RESOURCES With Rm408 MILLIONS WORTH OF BILOGICAL ASSETS IS LARGER THAN EVEN SIMEDARBY PLANT WITH RM290 MILLIONS BIOLOGICAL ASSETS
Now what is Biological Assets
Let us see its definition
What are Biological Assets? Recognition and Measurement
Fixed Assets
Overview:
Biological assets are assets that are living in nature. It includes trees, animals, and nowadays cannabis too, as it has been made legal. The company’s management breaks down the assets side of the balance sheet and classifies them by type and attributing a value to them.
Biological assets are dealt with in International Accounting standards 41 (IAS 41). As per IAS 41, biological assets are any living plant or animal owned by the business. These are typically measured at fair values less selling costs.
Examples of biological assets include goats, fish, vegetables, corn, tomatoes, apples, etc. Biological assets are generally perishable and are like current assets in the balance sheet.
Nature of Biological assets:
Biological assets are held and can be accounted for only by the business owners. These assets are important to farmers and individuals whose primary source of profit comes from growing, selling, and shipping biological goods.
They are the active components in the environment; hence, they are always difficult to maintain. They are always under the radar of qualitative and quantitative threats.
Importance of Biological Assets:
Biological assets generate substantial revenue or income for businesses in vineyards, floriculture, silviculture, and paper products.
Biological assets are typically seen in the balance sheet of these companies in industries. The only distinguishing feature for biological assets is that it is a living thing.
The major difference of biological assets is that biological assets change naturally and depreciate naturally and more rapidly than other types of goods.
Various biological assets like other goods can be in high or low demand depending on the season of the product. Recently there has been a surge in demand for soybean in the United States of America.
The threats suffered by biological assets include drought, cold weather, inconsistent rain, or forms of diseases. The biological asset is unique to accounting to categorize and identify assets owned by businesses clearly.
Recognition of Biological assets as per IFRS:
An entity recognizes a biological asset when the entity controls the asset as a result of past events. It is fairly reliable to say that benefit will flow to the entity, and fair value can be measured reliably.
Measurement of Biological asset:
Biological assets come within the scope of IAS 41. Initial recognition is done, and at subsequent reporting dates, the biological assets are recognized at fair value less estimated costs to sell, unless a fair value cannot be reliably estimated.
The gain on initial recognition of biological assets at fair value fewer costs to sell and changes in fair value fewer costs to selling biological assets during a period are included in profit or loss.
All other costs related to biological assets measured at fair value are recognized as expenses when incurred, other than costs to purchase biological assets.
We have modified some words to make it more relevant
From the above we can deduce that TSH RESOURCES with Both Palm Oil Estates & Timber Forest Concession have fully made use of opportunities to plant the MOST TREES (both Palm Oil & Timber) Totalling a Whopping Rm408 MILLIONS IN VALUE OVER THE YEARS - FAR FAR MORE THAN BOTH SIMEDARBY PLANT & FGV
This shows TSH RESOURCES has Deep Deep Biological Assets Value which aughur well when both CPO & LUMBER ARE NOW AT THEIR HIGHEST PRICES IN WORLD MARKET
Best regards
Calvin Tan Research
NOTE: TSH's RM400 MILLIONS BIOLOGICAL ASSETS ARE NOW VERY VALUABLE AS DEMAND FOR BOTH LUMBER & PALM OIL ARE UP & PRICES WILL REMAIN ELEVATED
2021-08-16 08:48
TSH Resources is also in the Top 2nd holder of Innoprise
Director Tan Aik Kiong of TSH is also a Director in Innoprise
https://www.marketscreener.com/quote/stock/INNOPRISE-PLANTATIONS-BER-20699188/company/
2021-08-16 08:55
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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....
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Ekowood taken private by TSH https://klse.i3investor.com/servlets/stk/5091.jsp
2021-08-15 22:22