THE INVESTMENT APPROACH OF CALVIN TAN

Rimbunan Sawit to beef up crop production and yield, By JACK WONG (Calvin Tan comments)

calvintaneng
Publish date: Sat, 06 Apr 2024, 03:13 PM
calvintaneng
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Hi Guys,

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

Dear friends of i3 forum


This is an excellent article on RIMBUNAN SAWIT. All the revealed facts are by the recently Appointed MD 


See

KUCHING: Rimbunan Sawit Bhd will undertake a series of short-to-medium term measures to beef up crop production and yield of its loss-making oil palm plantations.

Managing director Tiong Chiong Ie said the group plans to implement a recovery and rehabilitation programme to improve the conditions of these plantations.

Among the measures is the deployment of additional resources, such as machinery, equipment and human resources, to maximise fresh fruit bunch (FFB) crop recovery in the most productive blocks of the oil palm estates.The group will upgrade, repair and carry out maintenance works on the main and field roads to facilitate accessibility to and from the plantations.

To attract more workers to its plantations, Tiong said Rimbuan Sawit would establish attractive field work piece rates plus incentives, as well as refurbish or renovate the existing workers’ quarters to upgrade their amenities and facilities or construct new workers’ accommodation.

Rimbunan Sawit group owns 16 oil palm estates in Kuching, Sibu and Miri with a total planted area of 42,478ha, representing about 60.76% of the group’s total landbank of 69,909ha.

As at Dec 31, 2022, about 49% or 20,849 ha of the oil palms were in prime mature age cluster (eight to 19 years), 17,794ha or nearly 42% were old mature (over 20 years), 1,259 ha (young mature) and 2,576 ha (immature).


The group also owns and operates three palm oil mills.

Via wholly-owned subsidiaries R.H. Plantations Sdn Bhd and Jayamax Plantation Sdn Bhd, Rimbunan Sawit has entered into sales and purchase agreements with Mahawangsa Sungai Bok Plantation Sdn Bhd (formerly known as Hua Seng Plantation Sdn Bhd) (MSBPSB) to dispose of two loss-making oil palm plantations known as the Selangor Estate and Jayamax Estate in Miri Division, northern Sarawak for a total of RM165mil in cash.

The Selangor Estate covers 4,857ha and Jayamax Estate 5,077.66ha, which also include buildings.

In a circular to shareholders on the proposed disposal of the Selangor Estate and Jayamax Estate, Tiong said besides these two estates, the group has other loss-making oil palm plantations.

However, he did not disclose the number and size.

Rimbunan Sawit shareholders will vote on the proposed disposals at an EGM on April 8.

According to Tiong, the Selangor Estate and Jayamax Estate had been loss-making for three consecutive financial years up to 2022.

This was mainly because of shortage of oil palm harvesters as a result of travel restrictions and border closures imposed by the federal government to curb the spread of Covid-19 pandemic, as well as adverse weather conditions arising from the El Nino phenomenon in 2020.



This, he pointed out, had resulted in low FFB production and yield of the estates.

As both the Selangor Estate and Jayamax Estate are located at the boundary of the group’s oil palm estates in Miri, Tiong said their disposals are expected to cause minimal disruption to the operations of the group’s other oil palm estates within the region.

“Furthermore, given that the Selangor Estate and Jayamax Estate are adjacent to each other, disposing them together would enable MSBPSB to achieve economies of scale by operating the Selangor Estate and Jayamax Estate together,” he added.

The sales of the Selangor Estate and Jayamax Estate would reduce Rimbunan Sawit group ‘s total planted landbank by 17.99% or 7,643 ha.

Rimbunan Sawit group had suffered net losses for five consecutive years to 2022 but the losses had been reduced substantially from RM148.7mil in 2018 (revenue: RM338.7mil) to RM62.8mil (RM284.7mil) in 2019, to RM56.1mil (RM385.5mil) in 2020,to RM6.98mil (RM541.5mil) in 2021 and RM5.8mil (675.9mil) in 2022.

In 2023, the group made a turnaround and returned to the black with profit of RM24.5mil on revenue of RM507.8mil.

Tiong said the proposed disposals of the Selangor Estate and Jayamax Estate represents an opportunity for the group to unlock the value at a premium to their respective market value.

The group is expected to record a pro forma gain on disposal of about RM77.94mil.

From the proceeds of the sales, he said the money would be utilised for partial repayment of the group’s interest-bearing borrowings of about RM86.11mil.

This is expected to result in an interest cost savings of about RM3.99mil per annum and lower the group’s gearing level to 0.61 times from 0.99 times.

“In addition, part of the proceeds of the proposed disposals will be channelled towards the group’s business operations, as it will be utilised to fund new planting and replanting of oil palms. In that regard, the group will be able to conserve its internally generated funds to strengthen its financial position.”Going forward, Tiong said the group will seek opportunities to replenish and expand its plantation assets.

“The group takes cognisance that the foreign worker availability in Malaysia is gradually improving and expects healthy soil moisture conditions and lower-flooding disruptions to support output of its palm oil products, which bodes well for the performance of its oil palm estates in the longer term.

“Furthermore, with expectations of firmer palm oil prices and greater demand of palm oil products from the market, coupled with the group’s continuous efforts to optimise its operations and costs to drive greater efficiency and productivity, the group is cautiously optimistic on the outlook of the oil palm plantation segment as well as the financial performance of the group,” he added.


Calvin comments:


From the above let us do a detailed break down


As a result of lack of workers Rsawit has suffered 5 years of losses

See

Rimbunan Sawit group had suffered net losses for five consecutive years to 2022 but the losses had been reduced substantially from RM148.7mil in 2018 (revenue: RM338.7mil) to RM62.8mil (RM284.7mil) in 2019, to RM56.1mil (RM385.5mil) in 2020,to RM6.98mil (RM541.5mil) in 2021 and RM5.8mil (675.9mil) in 2022.


Managing director Tiong Chiong Ie said the group plans to implement a recovery and rehabilitation programme to improve the conditions of these plantations.

"Above are very positive words."


Among the measures is the deployment of additional resources, such as machinery, equipment and human resources, to maximise fresh fruit bunch (FFB) crop recovery in the most productive blocks of the oil palm estates.The group will upgrade, repair and carry out maintenance works on the main and field roads to facilitate accessibility to and from the plantations.


"Can expect increased collections of FFB just like Jtiasa, its sister Company"

And this was what Jtiasa did. THEY GAVE INCENTIVES TO WORKERS TO WORK OVERTIME & COLLECT AS MUCH FFB AS POSSIBLE.


Harvesting FFB begins at 6am daily and ends at 2.00pm (8 hours daily) . By exending "OVERTIME" from 2pm  to 6pm daily there will be an extra 4 daylight harvesting hours or 50% more. In this way JTIASA FFB production jumped by 50%


What Jtiasa did will now be done in RSAWIT as well"

Rimbunan Sawit group owns 16 oil palm estates in Kuching, Sibu and Miri with a total planted area of 42,478ha, representing about 60.76% of the group’s total landbank of 69,909ha.


NOTE: RSAWIT LANDS ARE LOCATED IN PRIME AREAS OF


1. KUCHING

2. SIBU

3. MIRI


These well located Lands are all along THE PAN BORNEO HIGHWAY. Their prices are now increasing day by day as NEW HIGHWAY will unlock their Land Value by ACCESS.

A TOTAL OF 69,909 Hectares

Convert to Acres by Multiplying with 2.471

= 172,745 Acres!


How Big is 172,745 Acres

About 2.36 Times the Land Size of Penang Island!

2 Penang Islands Plus 1/3 More to Spare?


See


Penang Island (source Google map) | Download Scientific Diagram


WOW! RSAWIT OWNS LOTS AND LOTS OF LANDS

Share price is a mere 27 Sen only?


Today many are going over GaGa over Property Stocks. Many of they do not even own more than 1,000 Acres

Imagine: Rsawit has 172,745 Acres Strong!


 a total planted area of 42,478ha


or 104,963 acres are Planted with OIl Palms


Now FCPO is over Rm4,300 a ton

Cost of Cpo production for most only half its price

So there will be a 100% gross profit.



Can you SEE how Rsawit will reap a golden windfall if it could get to harvest all its FFB?


According to Tiong, the Selangor Estate and Jayamax Estate had been loss-making for three consecutive financial years up to 2022.

This was mainly because of shortage of oil palm harvesters as a result of travel restrictions and border closures imposed by the federal government to curb the spread of Covid-19 pandemic, as well as adverse weather conditions arising from the El Nino phenomenon in 2020.


Why did Rsawit underperformed?


The answer 


This was mainly because of shortage of oil palm harvesters as a result of travel restrictions and border closures




now no more

as such it is time for Rsawit to buckle up and double up its effort in getting the last bunch of FFB at the furthest reaches to GET MAXIMUM YIELD!



Rimbunan Sawit group had suffered net losses for five consecutive years to 2022 but the losses had been reduced substantially from RM148.7mil in 2018 (revenue: RM338.7mil) to RM62.8mil (RM284.7mil) in 2019, to RM56.1mil (RM385.5mil) in 2020,to RM6.98mil (RM541.5mil) in 2021 and RM5.8mil (675.9mil) in 2022.


Look again at these figures VERY VERY CAREFULLY




While Revenues Have Increased Losses are getting less & lesser 


 2018

(Revenue: RM338.7mil)

Losses: RM148.7mil 


2019 

Revenue  (RM284.7mil)

Losses: RM62.8mil

2020 

Revenue  (RM385.5mil)

Losses: Rm56.1 Mil


2021

Revenue (RM541.5mil)

Losses:   RM6.98mil

2022

Revenue: (675.9mil)

Losses : RM5.8mil

Read again the FIGURES!!

In 2018 (Revenue: RM338.7mil)

Losses: RM148.7mil 


By  2022

Revenue: (675.9mil)

Losses RM5.8mil

EXCELLENT! EXCELLENT INDEED


Now SEE year 2023

In 2023, the group made a turnaround and returned to the black with profit of RM24.5mil on revenue of RM507.8mil.

FINALLY LAST YEAR

A TURNAROUND PROFIT OF RM24.5 MILLIONS!


Well Done!

Well Done!!


And no wonder MD also put his money where his mouth and heart is


See how he bought & bought Rsawit shares


Aha! I once bought RSawit as high as 60 sen but "Cutloss" 
Now Rsawit has fallen to 27 sen and with such good turnaround prospects with

VERY HIGH CPO PRICES OVER RM4,300 MT

LEADERSHIP OF RSAWIT IS CHANGING FOR THE BETTER

HOLDING VAST PALM OIL LANDBANKS IN PRIME APPRECIATING REAL ESTATE ZONES OF KUCHING, SIBU & MIRI

PLUS THE NEWLY ENERGIZED ABANG JO IN CHARGE OF INDUSTRIALIZING SARAWAK

THERE WILL BE A TWIN PLAY OF

1) HIGH PALM OIL PRICES WHICH GIVE US THE BEST PROFITS

2) APPRECIATING LAND ASSETS AS THESE LANDS OWNED BY RSAWIT GOT POTENTIAL TO BE CONVERTED INTO COMMERCIAL USE LIKE DATA CENTRE, SOLAR FARMS & OTHER INDUSTRIES WHICH WILL UNLOCK ITS "GOLD MINE" LANDS JUST LIKE BPLANT UNTIL BPLANT WAS TAKEN PRIVATE BY LTAT

RSAWIT NOW 27 SEN

WHAT WILL BE THE TARGET PRICE OF RSAWIT IN ONE, THREE OR FIVE YEARS TIME WHEN PAN BORNEO HIGHWAY IS FULLY COMPLETED?

WITH KIND REGARDS

Calvin Tan

Please buy or sell after doing your own due diligence or consult your Remnisier/ Fund Manager
More articles on THE INVESTMENT APPROACH OF CALVIN TAN
Discussions
Be the first to like this. Showing 5 of 5 comments

calvintaneng

JAYA TIASA = JUMPING TIGER

IT JUMPED FROM 63 SEN TO RM1.39!

RIMBUNAN SAWIT = THE RUNNING STALLONE!

RUN! RSAWIT RUN!!

1 month ago

calvintaneng

Jaya Tiasa
🐯🐅

Rsawit
🐴 🐎

1 month ago

Ytl2023

Thplant or rsawit better

1 month ago

Ytl2023

Or tdm

1 month ago

calvintaneng

Rsawit and Thplant are both Assets play


Rsawit lands, unlike Thplant, has no restriction in selling to non Bumi entity

1 month ago

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