The key message is not the sale of the land. It is the usage of the proceed. 20mil for working capital and 11mil to invest in research for AI Smart speaker in a timeframe of 6-12 months. That mean there should be a very high potential of a order is coming to fpi for smart speaker

If you are LTAT, what is the price you will sell bplant as part of the privatisation plan for Boustead. This will be the indication price for bplant

He represent Wistron. As Wistron leadership change, it change the representative in FPI as well. This is normal.

But none of the above company has net cash, above 6% dividend yield and consistent grow without the impact of commodity price. This should be weighted into consideration as well

25 cent is 8% yield better than any bank or fd interest

In current environment of inflation and reduce consumer demand, it is expected to affect company in electronic consumer segment however FPI might be different, WHY?

1) inflation of labour cost has been offset with strong USD, 2nd qtr USD strengthen from 4.2to 4.40 and FPI benefit from it due to selling price in USD, reflected as RM12mil gain in forex. In the 2nd qtr. while material price like wood and copper has come down a lot will give a net positive margin to FPI.

2) reduce consumer demand, YES... by all mean we all know it however FPI benefit from the shift of order from CHINA to Malaysia due to 2 reason:
A) China zero covid policy has disable productivity therefore order come to Malaysia, Ronald, the key customer of FPI has production factory in Malaysia and China, as we know order flow from China to Malaysia especially on the Ronald keyboard production segment due to restriction in China covid policy and uncertain.
B) FPI customer is mostly Japanese company and the market is for US and EU, therefore due to geopolitical situation, it is benefiting FPI from the shift of order from China to Malaysia FPI).

In summary margin is protected with strong USD and softer commodity price while demand from order is not effected by consumer reduce demand as offset with FPI customer production footprint shift from China to Malaysia.

FPI is cash rich and generous in dividend payout therefore it is a good proxy to hedge against inflation, weakening of RM and dividend against interest rate hike.

Please take your own discretion decision and it is my opinion from the deep drive analysis.

If we look at first half comparison forex is only 3 cent eps extra. And this adjustment give the same earning as last year taking into consideration of high inflation and min wages. Conclusion is fpi is able to sustain the profitability even at high inflation and material environment. That mean they have achieve efficiency and better pricing to offset with raising cost. Revenue is also growing. All this is a good indication

FPI top 3 customer is Japan brand. Nothing to do with Taiwan .

Business still growing as revenue improve. Margin is affected on high raw material and labour. In AGM they do mention they have the mechanism to adjust price in the contract but I think there is some time gap before new ASP take effective against material price increase.

Key take away from AGM
1) vertical integration is working well and continue discuss with Wistron on potential new vertical integration since Wistron is expanding in Malaysia.
2) 20 acres of land next to wistron, discussion is ongoing with customer
3) some impact on labour cost but employee headcount reduce by 200 as compare to Dec 2021 so I assume some offset
4) there is mechanism on adjusting pricing with customer for inflation cost on material

By Aug 2022. It is all assumption and your believe whether investment book forecast is correct or your own prediction of what is the average CPO for 2022

Do remember share price is forward looking 6 months. If my August 2022 CPO average is still above rm6,000 the rerating will change. Rm4,300 to rm6,00 is 40% mean Taann will be rm7

The current price is base on investment bank forecast of average CPO price for 2022 at RM4,300. Now is at rm6,000 and unless you believe by year end average is rm4,300 which mean 7 month from jun to December average is rm3,00 as the average up to April is 5,800.
You make your own judgement accounting.

Fpi has another new customer. Denon

Should be better than Q1 last year

With the higher production of external business product which has higher margin than the wistron product and the CNY break of a week, net profit is at 25-30mil. Forex gain is minimum on the first quarter however if USD remain at current rate, there will be a big forex gain in 2nd qtr

While fpi major customers are all Japanese company and once you met their expectation, relation and loyalty to continue is their culture. With that I would focus more on how well fpi sustain their quality and integrity in their business. So far they deliver what is promise

Since last year almost all business urge for worker and even paying more than RM1.5k you would not get semi skilled worker. Therefore I do not think that many of FPI worker is lower than rm1.5k now in its workforce. This is how the recent worker and avoid training cost and production efficiency.
While whether is it material shortage, higher inflation cost and shipment challenge, we are all facing it regardless of industry since last year therefore looking at how fpi manage it , I am not too worry or focus on this areas.

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It is good now that fpi focus on automation although a bit late. However it has proof that their automation plan is producing result rather than many organisation has invested a lot in automation but not really effective. To support my opinion fpi has reduce 20% workforce in 2021 with a big increase in sale. The automation only cost them 20 mil. All this information is in the latest 2021 annual report

I can answer Desmond query. Cash is reserve for expansion on a 20 acre land it bought in klang, it bought the land from govt for 40 acres JV with wistron, wistron has use 20 acres to build a factory and was in production for the past 3 years while fpi portion is still vacant land.
Fpi has a new customer Yamaha guitar. Sonos is wistron customer therefore don't expect fpi will have direct dealing with Sonos. Fpi has enough customer of their own now to occupy their factory capacity which is running 24/7 now

Fpi has low PE , it is because the boss do not believe in giving investor briefing and sharing. Traditional businessman, focus is on growing the business rather than singing in the town promoting FPI. GOOD result tell the achievement is their believe. That is why many do not know fpi and you will never able to search online if u want to know fpi. You need the hard work to perform your search outside of virtual space. Go and survey their klang factory at midnight and you may notice how active is the factory at this hours

Fpi has been actively hiring for local worker in late March early April, more line is working on 24 hours. Consumer is looking for smaller but high quality speaker and fpi has the technology

Fpi second largest customer is Roland. Roland factory is next to fpi. Fpi lease half of the factory to Ronald.

It is 40 cent for the FY2021

Tesla value is not in the car manufacturing but their technology and the software and data behind the scene therefore Tesla is deem to be a software company can can grow in sale without any CAPEX or min OPEX therefore it should not be compare with NTA to price. While plantation is asset base revenue generation. To produce more palm oil you need multiple time CAPEX on land and the 4-5 year cost of investment before the tree start producing revenue therefore it is an asset revenue grow type.
Comparing Apple to Apple to give us the understand why some stock is high or low in ratio but does not mean good or bad.
Looking at orient business, plantation is proofen good business now and with country reopening worldwide, hotel business will start generating profit while car sell will back to normal cycle. In summary this is the time where orient will have 3 segment business growing at the same time and this is why fund manager is reconsidering orient and start accumulating.

The AE has grand opening last week, so applied engineering is expected to start contribution to QES from 2nd qtr onward with a progress picking up till end of the year as peak

When inflation and interest is high while economy is toward stagnation, potential recession is a expectation, rotation play will move to value investing from growth investing. To hedge against recession and bankruptcy value stock with huge net cash is the nature hedge from safety asset like gold and USD. Insas value trap will soon end if the economy environment remain unchanged in the next 6 months therefore I think it will not trap for 5 years. Max is 6-9 months

I am not sure where you get the info that fpi client is sonos. The management has mentioned in last year agm that sonos is not their client but it is their parent company client. However I am not sure whether Sonos is under the RPT with wistron. Sony sound bar and Yamaha catalyst box is the only 2 existing ODM product of fpi other is OEM therefore you will not see direct shipping by FPI. OEM include Ronald their main client and etc.

Yamaha guitar is the new client secure

https://www.seair.co.in/us-import/e-formosa-prosonic-industries-bhd.aspx

Fpi was working on 24/7 at their factory on strong order book and the start of the new product from the client that they secure last year. Expected good earning result in 1st quarter. This is supported with strong shipping of Sony sound panel in 1st qtr 22 vs 4th qtr 21. USD strengthening will benefit to offset some cost inflation in MYR. Therefore margin is not impacted while the new product secure has a better margin.

In summary, it is similar to what Pmetal is enjoying, high metal price and low production cost due to energy cost cap price with bakun dam electric supply.

For those who has miss plantation cpo bull , you might want to catch the manganese bull soon because Ukraine has a 40% mining producer of manganese for the world. Manganese price is raising and it benefit OMH who has manganese mining business. On top of this, due to the oil price is not above USD120, many high energy smelter will not able to cover their cost of production therefore further reduce the manganese alloy production and OMH is not affected as it has a cap energy price with bakun dam.

Valuation. Net cash, yearly operating cashflow is 400mil at cpo avg price rm4,900. Now rm8,000. Do your math

Cpo break rm8,000 , opportunity to buy taann now

Operating cashflow for Sarawak plantation is rm50mil or 17 cent per share. This is true value.

With the pay down of loan from land sale, borrowing will be at comfortable level and that mean Bplant can afford to pay 6-8 cent dividend per quarter from it operation cashflow. I see high possibility it will frank high dividend as Boustead holding need cash

Land sale proceed is to pay off loan as per the prospectus. However quarterly operating cashflow is 150mil per quarter at CPO price 5k.
Now is 6k and with quarterly production of 40,000 ton, it is an extra 40mil cash and profit in 2022. Plus 3mil interest saving on loan repayment from land sale offset with 10mil extra makmur tax, it is still generating 180mil free cashflow per quarter or equal to 8 cent per quarter. This is super cycle

For those who miss the plantation theme recently, cepat can be the laggard play opportunity for you to join the palm oil boat

Fpi has been discussing with wistron for a vertical integration production. As wistron is an OEM, she is not interested in the manual or lower margin finishing step of the product, therefore fpi fit into this category. It is yet to see if this deal will come through and perhaps we will know in the near future once Wistron digested its expansion capability on the PJ factory. If this happen, it is a major grow catalyst for fpi on top of its own business grow now.

The related party transaction that wistron have with fpi for supplying speaker is actually a customer of fpi. It is fpi that get the contract however as it is an ODM there is a part that fpi do not have and it will require to have a heavy CAPEX on machinery if fpi would to do it itself.
In regard to this, fpi has asked wistron to provide the part of which wistron has the machinery and was producing for other customer in China.
To get the contract and to minimise the working capital, fpi offer wistron to sign the contract with the customer while wistron at as a main ODM.

If you analysis the detail you will notice that the supply of wistron part to fpi is lower than the work delivery by fpi as finish product.

Hope my sharing clear the doubt of the matter since so many is interested in the fact while some are providing own self opinion to the public.

In 3rd qtr average cpo is rm4,300 Bplant is making 95mil profit. So in 4Q avg will be at least 4.5k to 4.6k therefore profit will be higher than 95mil. It is expectation to delivery 120mil profit using the a comparison between 2 and 3 q profit differences

Fpi factory in klang not affected by flood

With the production activity running at peak in fpi to catch up with order book, fpi is estimate to have a eps of at least 10 cent in the 4th quarter. Also the price is affected with overall market bearish and concern of force labour, fpi is at the low tier risk as they take care of employee and their client portfolio is quite diverse with mostly Japanese and Taiwanese customer where force labour driver is limited as company to US and Europe.
If the eps estimation turn out at 10 cent we are expecting dividend to improve to at least near 20 cent.
Accumulate with risk as opportunity during the market bearish cycle is recommended.

Rm139mil fair value on inari adjusted to reserve instead of going through profit and loss account therefore NTA up to 3.23,

With the gain on disposal offset with esos expense adjustment net profit of 25.6mil vs preceding year of 25.8m in view of July and Aug production capacity was cap to 80% due to fmco, fpi is deem to exceed expectation result. With the prospect of prevailing sale order book, the 4th quarter is expected to be the record quarter earning. Target price is adjusted upward to above RM5. The target price is take into consideration that fpi is now running on 24/7 since September 2021.

Share buyback is when you are in net cash and no future investment plan. OMH is net debt and if they can generate operating cashflow, it should go for debt repayment. The interest saving go back to shareholder value indirectly. Hope it clarify that one strategy do not fit all

Differentiating goreng counter and fundamental grow stock need different understanding. Do not apply the wrong approach thinking that all counter that go up is a goreng stock.

2mil esos share listed today and the market absorb the first day well. This again proof that esos is not a tool to push down price and disappoint investor but a motivation for employee to share the gain of the company when they grow the company together.
Lesson learn from voices over they fundamental basis of esos.