THE INVESTMENT APPROACH OF CALVIN TAN

Latest Land Disposal in Sg Tiram, Johor, shows Palm Oil Companies with Huge Landbanks with Cheap Book Value are Jewels, Calvin Tan

calvintaneng
Publish date: Fri, 03 Dec 2021, 02:12 PM
Hi Guys,

I have An Investment Approach I which I would like to all.

Dear Investors

One of the best angle for Investing in Palm oil lands stem from its Precious Undervalue Land Holdings

See one example from Southern Steel land disposal in Sg Tiram in Johor

 

Southern Steel disposes of lands in Johor for RM65m to repay borrowings

 

KUALA LUMPUR (Dec 3): Southern Steel Bhd is disposing of two parcels of land in Sungai Tiram, Johor for RM65 million cash, to repay the group’s borrowings. 

 

The steel company inked a conditional sale and purchase agreement with aluminium manufacturer Sinppa Industrial Sdn Bhd for the land disposal measuring approximately 31.05 acres.

The price consideration was arrived at on a willing buyer-willing seller basis, said Southern Steel in a bourse filing on Thursday (Dec 2), adding that the group expects to realise an estimated net gain of approximately RM6.42 million from the disposal. 

Following the disposal, the group’s gearing ratio is estimated to reduce to 1.10 times, from 1.19 times, it added. 

Note:

The Sale is 31.05 Acres of Land

Price sold: Rm65 Milllion

To get cost per acre

Divides Rm65,000,000 by 31.05 acre

= RM2,093,397

THAT IS RM2.09 MILLIONS AN ACRE

HOW FAR IS SQ TIRAM FROM JB CBD

 

See

Map from Jalan Sungai Tiram to Johor Bahru

About 25.3 Km or a journey of 37 minutes

 

 

1) SEE FGV

NOW FGV Has Lands in Tebrau valued at only Rm3,150 per acre

 

How far is Tebrau to JB CBD?

 

See

 

Map from Tebrau to Johor Bahru

FROM THE ABOVE WE CAN SEE THAT

FGV LANDS AT RM3,150 Per Acre is nearer to JB City than Southen Steel land sold at Rm2.09 Millions 

 

How many times more value is Rm2.09 Millions over Rm3,150?

 

Answer: 663 Times more.

 

This shows that FGV Assets are grossly undervalue.

No wonder that Felda wants to take FGV private.

 

 

2) SEE THPLANT

Now Thpant the Small Cap Palm Oil Company also got 240,000 Acres of Plantation lands

Take a look at its 10,000 Acres land in Kluang, Johor

Refer to Thplant AR (Annual Report)

 

Ladang Bukit Lawiang....... Leasehold 2091....4,058 Hectares...Oil Palm Estates......Rm74,265,000
Ladang Gunung Sumalayang
Kluang, Johor
 

From the above we see Thplant has 4,058 hectares of palm oil estates book value Rm74,265,000

To get acre multiply 4,058 by 2.471 = 10,027 acres

To get cost per acre divide Rm74,265,000 by 10,027

= Rm7,406 per acre

These are lands planted with Matured Oil Palms. Today oil palm lands are worth from Rm40,000 to Rm60,000 per acre in Kluang, Johor

So Thplant is another Palm Oil company with very undervalue assets.

Another candidate for privatisation?

 

 

Warm regards

Calvin Tan

 

Please buy or sell after doing your own due diligence or consult your remisier/fund manager

 

 

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