THE INVESTMENT APPROACH OF CALVIN TAN

A LOOK AT JTIASA AND IB BANK PAST FORECAST, JTIASA FUNDAMENTAL THEN & NOW, Calvin Tan

calvintaneng
Publish date: Thu, 08 Feb 2024, 02:21 PM
calvintaneng
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Hi Guys,

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

Dear friends,


Please read this

IN YEAR 2013 RHB IB GAVE THIS BUY CALL FOR JTIASA

Jaya Tiasa (JT MK) Buy (from Neutral)

Industrial - Building Materials Target Price: MYR2.56

Market Cap: USD677m Price: MYR2.25


See the link


https://cdn1.i3investor.com/my/files/st88k/4383_JTIASA/pt/RHB/4383_JTIASA_RHB_2013-12-13_BUY_2.56_Jaya%20Tiasa%20-%20CPO%20Price%20Assumptions%20Raised_475679008.pdf


(if cannot open then please read this under comment section)


At that time Cpo was around Rm2600 


See


Upgrading CPO price assumptions. We have upgraded our in-house

CPO price assumptions for CY14 and CY15 to MYR2,700 and

MYR2,900 per tonne respectively from MYR2,600 previously. We

maintain our price assumption for CY13 at MYR2,400/tonne.

 Four main factors driving the upgrade. These are: i) a stronger global

economy, which means food demand will continue to grow, ii)

Indonesia’s lacklustre production growth on the double impact of dry

weather in 2012 and 2013, iii) mandatory biodiesel implementation in the

world’s two biggest palm oil producing countries, and iv) production cost

to remain flattish-to-lower on significantly cheaper fertilisers following the

potash cartel breakup in mid-2013.

 Raising forecasts. We have raised our forecasts for JT following the

10.2% price hike for FY06/14 and 14.6% for FY06/15. Our CPO price

assumptions are: MYR2,550/tonne for FY14 (from MYR2,375) and

MYR2,800/tonne for FY14 (from MYR2,600).


So 10 years ago RHB IB was bullish when Cpo was Rm2600

And gave a target price for Jtiasa at Rm2.56


Now after 10 years the Fundamental of Jtiasa has improved tremendously


See


10 year chart of CPO


Average prices for palm oil worldwide from 2014 to 2025 ...

A look at Chart Above can See PALM OIL PRICES NOW ABOUT THE SAME IN YEAR 2014


But look further and deeper


CPO is priced in USD


See USD to Ringgit Chart


20 years SGD-MYR chart. Singapore Dollar-Malaysian Ringgit


SEE VERY VERY VERY CAREFULLY


IN YEAR 2014 ONE USD IS EQUAL TO AROUND RM3.00

TODAY ONE USD IS MORE THAN RM4.70


So in USD term Ringgit has fallen by 36.1%


So Jtiasa is seeing CPO at Rm3898 (No more Rm2600)


See


CRUDE PALM OIL FUTURES

Market open
Continuous contract
FCPO1!
Bursa Malaysia
3898MYRD
+21+0.54%
As of today at 12:29 UTC+8



From Rm2600 to Rm3898 is up 49.9% increase in CPO price.


Even though Fertilizer & Labour Cost have also increased they have now softened to a rise of 20% to 25%


So there is a lot more profit for Jaya Tiasa now compared to year 2014


Moreover in year 2014 Jtiasa total net borrowings was 


Current Interest bearing loans and borrowings  Rm455,536,000 

Non Current: Interest bearing loans and borrowings  Rm411,208,000


Total debt Rm866.744 Millions

Less cash 

Cash and bank balances Rm81.037 Millions

Less Investment securities

Investment securities Rm124.741 Millions


= Net debt Rm660.9 Millions


Jtiasa current Net Debt has been pared down to Rm93 Millions only


SO THERE IS VAST IMPROVEMENTS


NOW SEE JTIASA VERY STRONG EANINGS IN TWO SETS OF RESULTS


Feb 2014 (refer Bursa)


SUMMARY OF KEY FINANCIAL INFORMATION

31/12/2013

INDIVIDUAL PERIOD
CUMULATIVE PERIOD
CURRENT YEAR QUARTER
PRECEDING YEAR

CORRESPONDING

QUARTER

CURRENT YEAR TO DATE
PRECEDING YEAR

CORRESPONDING

PERIOD

31/12/2013
31/12/2012
31/12/2013
31/12/2012
$$'000
$$'000
$$'000
$$'000
1
Revenue
271,950
286,222
517,418
560,562
2
Profit/(loss) before tax
29,689
2,219
55,698
20,367
3
Profit/(loss) for the period
20,456
3,172
39,930
17,928
4
Profit/(loss) attributable to ordinary equity holders of the parent
19,840
2,888
38,943
17,425
5
Basic earnings/(loss) per share (Subunit)
2.05
0.30
4.02
1.80
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 ($$)
1.8000
1.760




Earning per share was 2.05 sen 


Latest result



SUMMARY OF KEY FINANCIAL INFORMATION

30 Sep 2023

INDIVIDUAL PERIOD
CUMULATIVE PERIOD
CURRENT YEAR QUARTER
PRECEDING YEAR

CORRESPONDING

QUARTER

CURRENT YEAR TO DATE
PRECEDING YEAR

CORRESPONDING

PERIOD

30 Sep 2023
30 Sep 2022
30 Sep 2023
30 Sep 2022
$$'000
$$'000
$$'000
$$'000
1
Revenue
248,003
207,807
248,003
207,807
2
Profit/(loss) before tax
93,035
46,472
93,035
46,472
3
Profit/(loss) for the period
66,835
33,948
66,835
33,948
4
Profit/(loss) attributable to ordinary equity holders of the parent
66,833
33,985
66,833
33,985
5
Basic earnings/(loss) per share (Subunit)
6.90
3.51
6.90
3.51
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 ($$)
1.5100
1.4200


Latest result is 6.9 sen



so from 2.05 sen to 6.9 sen is up 236%


To sum it up


Rhb IB gave buy call in year 2014 & target price for Jtiasa at Rm2.56


At that time Cpo Rm2600 considered GOOD

Now CPO IS A HIGH OF RM3,898 )Up almost 50%


At that time Jtiasa Net Debt was Rm660 Millions

Now only Rm93 Millions

Or only 14% left of those high debt years


Last time EPS was 2.05 sen

Now 6.9 sen


At that Time Uncle KYY promoted JTIASA at Rm2.40

And IB BANKS BULLISH


Now Jtiasa is Rm1.13 (Less than half price)

And IB Bank gave neutral call?


IT IS VERY CLEARLY DEMONTRATED BY FACTS AND FIGURES


IB BANKERS SHOULD RERATE JTIASA HIGHER


Best regards

Calvin Tan


Please buy or sell after doing your own due diligence or consult your Remisier/Fund Manager

More articles on THE INVESTMENT APPROACH OF CALVIN TAN
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Be the first to like this. Showing 8 of 8 comments

investor77

After Utd Plt announce bumper profit, J Tiasa may catch up. CNY is wood Dragon. JTiasa has a large Forest Concession. As Calvin said, when CPO price low, RHB gave TP of RM 2.56, now with Cost of Production at RM 2400, and CPO around 3800, eps will be higher than last Quarter. Dont forget, all its large 100k over acres, are Prime growing trees, i.e. yielding maximum production per acre. May go up slowly to touch RM 1.48.

2 months ago

calvintaneng

JayaTiasa is a jumping 🐅🐯

2 months ago

calvintaneng

Fantastic Fertilizer News!

Natural Gas (Nitrogen Fertilizer) has dropped from US10.00 to US1.58

A Drop of almost 85% from year 2022 Peak

Tremendous Savings on Fertilizer For Oil Palm esp those with Growth Stage of Palm Fronts

This will translate to lower Cost of Cpo production

Best to Stay Safe in Palm Oil Stocks

https://tradingeconomics.com/commodity/natural-gas
(Click on 10 year price chart button)

2 months ago

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