hi Ricky Yeo, based on The Edge magazine publish article title 'CMS the big winner in Pan Borneo Highway Project' on Jan 18, 2016 stated that about 50% of the highway cost could be for material cost. http://paultan.org/2016/01/27/banting-taiping-west-coast-expressway-5-complete/ WCE construction cost about RM5B. Assume 50% for material cost, RM2.5B and assume 5% net profit margin, it will be RM125M. How much net profit for precast concrete player? i have no idea
i think is a reasonable assumption. Let say extraction rate 20%, CPO price RM2500, Total production cost RM1700 (i think usually production cost RM1300-1600). It means profit/tonnes RM800. 75,000 tonnes x 0.2 (extraction rate) x RM800 (profit)= RM12million expected profit
Why Bargain Exist? 14 October 2014 drop RM1.20 (previously around RM1.40) 1 Dec 2014 drop RM1 13 May 2014 drop RM1
Above situation mainly due to Alanya Marine Acquisition by issue 43.3M new ordinary shares (23 Dec 2014), about 10% outstanding share. Partly due to investor too focus on timber future prospect (legal claim or potential tarik lessen). Actually, this is NOT a bargain share. Cold eye bought it because he can see the future of company (business insight) just like the reason he invest in POHUAT, Furniture Company to export good to overseas. (US housing grow, increase US currency) He aims the plantation business to show profit!
DOWNSIDE PROTECTION Outstanding share: 481M Price: RM1.08/share MC: RM520M Based on Annual Report 2014, Current asset (536)-all debt (450) = 86M [confirm value] PPE (bank guarantee value, note 13) = 255M [confirm value] Balance value: 179M Timber PBT (e.g project area within License No. LPF/0032, note 13): 35M [less confirm value] Palm oil : 86.4M [less confirms value, 2016E]
Palm oil Analysis Assume CPO price: RM2300-2600 Production cost/ton: RM1300-1600 Monthly production FFB: 3000 mt Total production/year: 36,000 mt 炼油率：20% Profit/ton: RM800 PBT: 36,000 mt x 0.2x RM800=RM5.76M Palm oil value: RM5.76M x 15= 86.4M
RISK 1) Potential Tarik Lesen But at least take few years to proceed (appeal to high court). 2) Potential legal claim -S17(a) & (b) MACC act [5x nilai rasuah] -S4(1) Anti-money laudering, Anti-Terrorism Financing and Proceed of unlawful activities Act 2001 [Less than 5M] -Forest Bill 2015 [less than RM500K] 3) Potential Cash burner machine: Alanya Marine Acquisition Paid RM89M for 49% ownership Means 182M with potential PAT 11M [EV/PAT 16.5] 4) Bad Management Wrong Decision Continue invest in losing money business such as oil & gas, forest plantation But, it will be less likely to happen because high insider ownership 30.76%. However, still need to monitor management investment decision.
UPSIDE You pay RM520M worth for timber business and FREE plantation business.
Plantation Business Value at least worth 86.4M with a huge potential above 265M (palm oil biological asset value) NTA RM2.79, P/NTA=0.38 Goal to be P/NTA 1
SIGNAL Fong siling bought NEW position RM5M (around RM1/share) in this company. [VERY BIG POSITION, normally only 1-2M] Datuk Wong Kie Yik, Founder recently bought 420,000 share (Jan-June 2015) average price RM1.05/share. (Annual salary RM135k) Datuk Wong Kie Yik seldom buy share use his name except on 2001 year only (from 1999-2014).
hi Pak Lah, I already get feed back answer from 'The Edge' magazine.
'The RM60 million to RM80 million a year from the Indian power plant is an after tax estimate after paying taxes in India. For the Pahang solar energy venture however the estimated RM12 million is a revenue estimate. '
Refer NOBY's comment: THere is an easier way. If you have a fundamental screener like the one from CIMB traders, just use the screener (Capital IQ) to search his name and the list of stocks he own will appear.
hi sean_limkh, did u oledi received the book (valuegrowth investing) from bookdepository.com? just want to know the service of bookdepository.com. because i also plan to buy the book from bookdepository.com. thx