According to the trend of monthly FFB production for last 10 years, this year 2023 Jtiasa FFB production would be increased by 15% to 20% in comparison with year 2022.

What if CPO price drop to RM 3k level? I am merely a small potato but i would keep playing squeezing game with the Mr. Market. The next stop would be 62 cents and follow by 57 cents and go for the extreme 47 cents. See who would suffer more paper loss in the end. lolz

Squeezing game again. See how low it can go. I would make it slightly more... Be aware of margin.

Fed rate hike is peaking and max would be adding another 0.25% in the next meeting. No matter how, pausing rate hike and starts cutting interest rate are the only way out to safe the economy. QE will be the only possible way to save banks.

Fed rate hike is peaking and max would be adding another 0.25% in the next meeting. No matter how, pausing rate hike and starts cutting interest rate are the only way out to safe the economy. QE will be the only possible way to save banks. Go for MSC!

When the CPO price is very high then the company would turn into Jaya Tiada and vice versa.

Jaya Tiada and Jtiasa works in cyclical. It depends when we catch it up to wait it turn from Tiada to Tiasa or vice versa. Lol

Risks is inevitable in investing and therefore, what we can do is to minimize it through more understand the company itself, comparison within its peers, the development of the industry and the macro environment especially QE/QT and how Fed lead the direction of Interest rates. It doesn't mean i would ignore entirely CPO prices and the story might be different when CPO prices were hovering between 5k to 6k.

Average age profile of Malaysia palm old trees is deteriorating as more than 2 million hectare of the trees over 22 years old. Replanting costs is between MYR 20k to MYR 30k per hectare.

Malaysia planted area was at the peak of 5.9 million hectare in year 2019. The planted area is getting smaller year by year and dropped until 5.67 in year 2022 or the planted area has contracted by 3.8%. It could be due to replanting exercise is being carried out at slow pace.

QE has resumed following short life QT of 10 months. Fed implemented QT from May 2022 until Feb 2023 and US 630 billion had been withdrawn from the market. In mere 1 week, an indirect QE US 308 billion was pumped into the market. "the Fed sharply increased its lending to banks—to the tune of $308 billion, up by $303 billion from the prior week. Only $12 billion of that was through the emergency Bank Term Funding Program (BTFP), while $153 billion was through the traditional discount window and $143 billion was tied to Silicon Valley Bank and Signature. "

As at Dec 2021 or 2022
FGV (Year 2021)- Mature Area 279,141 hectare ( old trees 97,531 or 35% of mature trees ) Immature area 56,660 hec
IOICorp (Year 2022) - Mature Area 143,787 hectare ( old trees 54,310 or 28% of mature trees) Immature area 31,505 hec
KLK (Year 2022) - Mature Area 253,870 hectare ( old trees 72,782 or 29% of mature trees) Immature area 35,780
SimePlnt (Year 2020) - Mature Area 490,005 hectare ( old trees 156,802 or 32% of mature trees) Immature area 93,334 hec

Few overseas oil palm upstream big players are encountering high rate of old trees. It may cause supply disruption in the next 3 years as the trees getting older at the faster pace and immature areas unable to catch up the shortfall.

As at Dec 2022
Golden Agri - Mature Area 497,353 hectare ( old trees 179,047 or 36% of mature trees ) Immature area 39,788 hec
First Resource - Mature Area 195,575 hectare ( old trees 52,205 or 27% of mature trees) Immature area 15,834 hec
Wilmar - Mature Area 213,729 hectare ( old trees 37.738 or 18% of mature trees) Immature area 17,968 hec

Plantation giants are too facing the similar problem of high proportion past prime trees in their portfolio due to delay in replanting programs ie FGV, KLK, IOICorp & SimePlnt. Old trees have exceeded 30% of their mature areas. Some even opt to drop disclosing age profile of the trees in the AR last year.

Therefore, Malaysian Palm Oil Association (MPOA) has recently called for mass replanting in Sabah.

Some bigger size reputable plantation companies cannot help of seeing their share prices from falling. GenP is a good example as 30% of its mature trees more than 21 years old as at year 2021. SOP is another one has entered old trees cycle since 3 years ago. More will be seen in the next 3 years. Many companies are unable to do replanting for past 6 years due to the sliding of CPO prices (2017 - 2019). 3 years Covid period had caused shortage of labour to do harvesting an replanting exercise was entirely out of question.

Sarawak upstream plantation players are not able to fetch higher planted/hectare as most of the palm oil trees are planted in peat soils land. However, few companies (BldPlnt, BPlant, Cepat & MHC ) traded between MYR 23k to 28k/planted hectare mainly attributed to high portion of the old trees in the plantation portfolio.

Some upstream plantation companies are traded much higher planted/ hectare.

ChinTek - MYR 47k
HSPlant - MYR 42k
Inno - MYR 57k
NSOP - MYR 35k
PLS - MYR 41k
TSH - MYR 35k
Umcca - MYR 42k
GenP - MYR 34k

Don't expect fast money from Jtiasa like what had happened last year, a sudden super bullish CPO price rally turbo charging to boost the price. Therfore, It could take 6 months to 12 months to see results of rerating.

Without the involvement of big players actively to lead the market , volume and price are certainly dull alike dead water. Don't expect them to defy the movement of the whole market trend in short term. Many people can lead to price movement in short term (1 day to week). Syndicate is needed to lead the price in the longer period as they have more funds to do the job.

If I were the big players, I might create more volitality to squeezed more short term traders. How can let them enjoy easy money so much. Hahaha

Back to the price 70 cents before ex dividend. I thought the big players would have dumped until 64 cents this morning for us to pick up at market cap MYR 9k/ planted hectare.

Just browsed the lands ownership of Jtiasa, SOP, SwkPlnt and TAAN. More than 90% of their palm oil land is under leasehold.

Now, Jtiasa is traded at market cap MYR 9.6k/ planted hectare. Both SOP & SwkPlnt are fetched at MYR 27k/ planted hectare ( excluding old trees ) whilst TAAN is hovering around MY 30k/ planted hectare.

Replanting costs are between RM 20k to 30k now.
https://www.thevibes.com/articles/business/87605/one-third-of-sabahs-oil-palm-trees-old-prompting-call-for-mass-replanting

Jtiasa left the debt-laden niche plantation club (FGV, NPC, Rsawit, TDM, ThPlnt & Subur). The company is marching back to the healthy balance sheet Sarawak plantation club ( SOP, SwkPlnt & TAAn )

Blueblues. What I meant is let us see whether Jtiasa would turn into a net cash company after 9 months.

Jtiasa will turn into a net cash company within 9 months. The Company would save at least MYR 20 million/ year interest payment. Besides profit itself, Non cash flow item Depreciation provides cash inflow around MYR 130 million/year. Low capex is another plus point. See how it goes 9 months later.

Jtiasa quarterly FFB production yield (annualised) per hectare was maintained slight above 16 tonnes at least from beginning 2018 until 2nd quarter 2020. The yield has slid to 10.5 tonnes in 2 years time until 1st quarter 2022. Most probably due to lack of money to buy fertilizer and shortage of labour while the CPO prices hitting low level during covid period. Now, the yield has been going up gradually to 12.5 tonnes while the company made a good profits for year 2022. Expect the FFB yield will be returned to 16 tonnes level within 24 months.

KPJ still got legs to move up further in comparison with IHH &TMCLife.

Testing time. Getting rid of short term traders.

Jtiasa will go out of wood in high gearing plantation group (NPC, Rsawit, TDM, THplant & GLBhd) traded at market cap MYR 10k/planted hectare. Upgrading to low gearing group is imminent to reflect great improvement in its financial position.

Huge reduction in borrowing in last 12 months. Rerating on the way.

EPF plays yoyo game and preventing share price from going wild. .

JTIASA is the cheapest market cap among the plantation companies. Market cap MYR 10k per planted hectare remains undemanding. Most of the plantation companies are traded more than MYR 20k

ESG is being misused by the certain group of people. When a sector is making good money then then market manipulators dish out ESG problems. Soon or later, every sector will be facing ESG issues.

It is quite straight forward to work out the profit of INNO based on the disclosure of TSH since INNO is the only associate ( stakes: 21.79% ) to TSH. It won't run way much.

1.883m/0.2194 = 8.6m

TSH stakes:
42% - RT Plantation ( classified under subsidiary )
50% - TSH - Wilmar ( JV )

SwkPlnt's FFB production has been increasing double digit for the past 2 years after acquiring by TAAN through focusing into enhancement and clearing encumbered areas left by the previous management.

FFB production volume:
Year 2020 - 341,065 MT ( + 22% )
Year 2019 - 280,649 MT (+ 14% )
Year 2018 - 245,852 MT (+ 5% )
Year 2017 - 234,109 MT

On top of higher CPO prices, FFB production volume for 2nd Qtr 21 will be higher than 1st Qtr 21.

QR is not really good after excluding gain in biological assets due to lowest FFB volume in 1st Qtr 2021 but production has started showing an increasing trend in Apr 2021.

60% of the palm oil plantation mature areas is contributed from Indonesia segment . The companies won't be able to profit much during the CPO price rally for the operation in Indonesia due to heavy tax and export duty.

Ijmplnt planation area in AR 2020:

Mature areas :
21,576 hac (Malaysia )
32,793 hac (Indonesia)

Immature areas:
3,322 hac (Malaysia )
3,275 hac (Indonesia)

Extracted from PublicInvest :

Not all players will fully benefit from the CPO price gains. Despite stronger CPO prices, not all players will enjoy the full benefit of CPO price rally as upstream plantation players in Indonesia are subject to hefty CPO export duty (USD144/mt) and CPO excise levy (USD255/mt), there would be huge income losses for them as they are only able to recognize a net CPO price of RM3,000/mt based on the current spot level of RM4,700/mt). This is significantly lower compared to Malaysia’s RM4,324/mt (after netting of 8% CPO export tax). Only players with refinery plants would be able to capture the full market price of CPO given the hedging nature.

Extracted from PublicInvest :

Not all players will fully benefit from the CPO price gains. Despite stronger CPO prices, not all players will enjoy the full benefit of CPO price rally as upstream plantation players in Indonesia are subject to hefty CPO export duty (USD144/mt) and CPO excise levy (USD255/mt), there would be huge income losses for them as they are only able to recognize a net CPO price of RM3,000/mt based on the current spot level of RM4,700/mt). This is significantly lower compared to Malaysia’s RM4,324/mt (after netting of 8% CPO export tax). Only players with refinery plants would be able to capture the full market price of CPO given the hedging nature.

TSH operation is much dependent on Indonesia segment . The companies won't be able to profit much during the CPO price rally for the operation in Indonesia due to heavy tax and export duty.

TSH planation area in AR 2020:

Mature areas :
4,522 ha (Sabah)
24,380 ha (Indonesia)

Immature areas:
1,653 ha (sabah)
901 hac (Indonesia)

TSH is indirectly disclose the profit of its associate, Inno Plantation. With the sharing of the profit from the associate 1.883m, Inno Profit can be worked backwards... roughly about 8.5m in 1st Qtr 21. Hardly see any company announce QR before announcement make by their subsidiary or associate.

TSH is indirectly disclose the profit of its associate, Inno Plantation. With the sharing of the profit from the associate 1.883m, Inno Profit can be worked backwards... roughly about 8.5m in 1st Qtr 21. Hardly see any company announce QR before announcement make by their subsidiary or associate.

TAAn and Swkplnt will be benefited more from the commodity ride since the companies don't have the policy to hedge their sales or the palm oil is sold at spot prices. Furthermore, they don't have any plantation landbank in Indonesia.

https://klse.i3investor.com/blogs/PublicInvest/2021-05-19-story-h1565126530-Plantations_A_Super_Cycle_Coming_to_the_End_Soon.jsp

https://klse.i3investor.com/blogs/PublicInvest/2021-05-19-story-h1565126530-Plantations_A_Super_Cycle_Coming_to_the_End_Soon.jsp

TAAn and Swkplnt will be benefited more from the commodity ride since the companies don't have the policy to hedge their sales or the palm oil is sold at spot prices. Furthermore, they don't have any plantation landbank in Indonesia.

By looking at the CPO production for the past 6 years, it is obviously the decreasing trend was formed in 2020. The downtrend remains for first quarter 2021 with a reduction of 2% on the back of production quantity 14.55 million ton.

CPO production (Indonesia & Malaysia)

2020 - 70.8 million ton (-1.3%)
2019 - 71.7 million ton (+7.1%)
2018 - 66.9 million ton (+7.0%)
2017 - 62.5 million ton (+13.1%)
2016 - 55.3 million ton (+7.6%)
2015 - 51.4 million ton (+4.6%

By looking at the CPO production for the past 6 years, it is obviously the decreasing trend was formed in 2020. The downtrend remains for first quarter 2021 with a reduction of 2% on the back of production quantity 14.55 million ton.

CPO production (Indonesia & Malaysia)

2020 - 70.8 million ton (-1.3%)
2019 - 71.7 million ton (+7.1%)
2018 - 66.9 million ton (+7.0%)
2017 - 62.5 million ton (+13.1%)
2016 - 55.3 million ton (+7.6%)
2015 - 51.4 million ton (+4.6%