Posted by thundercat > 2013-11-05 10:19 | Report Abuse

Thanks for the sharing Mr Koon. I'll certainly take a deeper look into this stock tomorrow.

Posted by lotsofmoney > 2013-11-05 10:21 | Report Abuse

Jtiasa is one of the stupid counter I lost money. FGV is another loser.

Posted by Fortunebull > 2013-11-05 10:22 | Report Abuse

Jaya Tiasa! Riding on cpo uptrend!

Posted by ktrader > 2013-11-05 10:23 | Report Abuse

aiyaaa....old article maa.....appeared in dali's blog.....

Posted by leslieroycarter > 2013-11-05 12:03 | Report Abuse

quite a logical assumption . may take a look for this jtiasa counter. But I prefer cepat or rsawit coz their trading volumes are big and easy for trading.

Posted by Can Can > 2013-11-05 12:48 | Report Abuse

l dont buy jtiasa bcos Swak whitehair got interests in this counter. Never buy whitehair counter. Very dangerous. Buy it at your own risks.

Posted by JCool > 2013-11-05 12:53 | Report Abuse

Guys gays... luv luv.... Do chk tis thread out Wet dreams come true HOT TIPS! HOT TIPS! Posted by JCool at Nov 5, 2013 12:29 PM | Report Abuse  Once again, tis round Pmcorp... has proven beyond reasonable doubt... big fish / syndicate / gang.. rules BursaMalaysia......  Just remember; FOLLOW D TIPS... true for Harvest Luster Sersol Pmcorp n of cos many many more to come....  Remember to always remember d THREE important things in stocks mkt....... FOLLOW D TIPS... FOLLOW D TIPS... FOLLOW D TIPS...... n coupled wit excess liquidity now it wld b a total wet dream comes true... ahhhh ahhh yes yes.... no doubt  So do keep d tips coming.... wat counters wld be next? Do give d tips.... m waiting! Seriously bull mkt is short.. so thr is really no harm in making a fast killing.  ALL TIPS IS WELCOME.... N NONE WLD BE BLAMED... STRICTLY ON A WILLING TELLER WILLING FOLLOWER BASIS. Tkvm

Posted by Ooi Teik Bee > 2013-11-05 13:00 | Report Abuse

This stock is going to move up once 2.29 is crossed convincingly. The worst is over for this stock.
Thank you.
Ooi

Posted by paparazi > 2013-11-05 17:59 | Report Abuse

but mr. koon also strongly recommended xingquan and evergreen which resulted many lost their pants! is mr. koon still holding xingquan????

Posted by rlch > 2013-11-05 18:25 | Report Abuse

JTiasa latest quarter EPS 0.60sen hardly inspiring.
http://klse.i3investor.com/servlets/anpth/933141.jsp

Posted by tonylim > 2013-11-05 20:28 | Report Abuse

IF you care to look at the price graph jtiasa has bottomed out some time ago.

Good punt if cross over 2.30

Posted by lmenwe > 2013-11-05 20:37 | Report Abuse

http://malaysiafinance.blogspot.com/2013/07/rebuttal-by-mr-koon.html
http://malaysiafinance.blogspot.com/2013/07/koon-yew-yin-on-jaya-tiasa.html
please go to the links there are quite a number of concrete negative comments on jtiasa. Jtiasa's debt is more than RM800 million and their cash on hand of around RM 200 million but it need RM 235 million to build 3 palm oil mills. It is well known that sarawak's peat soil are not suitable for planting oil palm. Bottoming of CPO? Please CPO price in the 2012-13 considered as depress? Please go sime darby's website to check what kind of profit margin they are enjoying? With more expansion in Africa and Indonesia I will never be bullish on CPO. Furthermore I believe the commodity super cycle started from 2002 had stopped.

Posted by Ooi Teik Bee > 2013-11-05 21:31 |

Post removed.Why?

Posted by imoogi99 > 2013-11-05 22:13 | Report Abuse

Even though the cpo price had rebound but it is still will be selling at a discount to soy oil. Base on yesterday closing, CPO price is still at US100 discount of soy oil. There's a talk of ample supply of soy oil and if soy oil does not move, CPO cant move much. No doubt population growth and so is demand in oil also grow but then who going to stop America, Brazil, Argentina and others from continue to plant more of soy. They will continue to grow, so is ours palm plantation. Unless the weather comes into play and disturb the growth of soy or palm and we could see cpo price move higher or else it will be tough for these few months. Soy oil had been on a downtrend since Sep 2011 and it will continue the downtrend until there's an interruption to the supply. At this moment, there's growth in the supply.

Posted by lmenwe > 2013-11-06 07:19 | Report Abuse

If we are using a price between RM 2,200 and RM 2,600. Do you think jaya tiasa still worth a buy? Plantable area at 70,200 ha. I assume they can achieve a yield of 23 tonnes/ha. The FFB will be 1,614,600 tonnes. With OER of 21% the CPO produced will be 339,066 tonnes. Assume CPO at RM 2,600/tonne the revenue will be RM 881,571,600. With a profit margin of 25% the net profit will be RM 220,392,900. EPS will be RM 0.23. With a P/E of 10 it will only worth RM 2.30. With a P/E of 15 it will worth RM 3.45. An upside of 56.81%. P/S i am excluding the timber's profit because I have no clue how it will perform. I believe another 8-9 years are needed to achieve full capacity. Assuming an inflation rate of 4% the return will be 14.58%. The annualized return will be less than 2%. Of course I might be over pessimistic on this counter however even you use a more optimistic view on it the counter doesn't look attractive. However if you believe that commodity boom doesn't end and CPO can prosper than it will be a different story.

Posted by rlch > 2013-11-06 07:26 | Report Abuse

Wait for next year and see whether JTiasa financial result improve is still not too late.

Posted by bsngpg > 2013-11-06 07:35 | Report Abuse

@Imenwe : Thanks for the very good write up from one perspective. Wish to see more postings from Imenwe. Thank you.

Posted by JT Yeo > 2013-11-06 10:18 | Report Abuse

just my take, I can be wrong. From my understanding, plantation and timber companies operate in an extremely challenging commodity business and one that require very heavy CAPEX. ROE for JTiasa has been around 1-4% since 2008, yet JTiasa is pouring a lot of money in CAPEX thus having negative cash flow for most of the years. This can be a potential value destruction over the long term, however I have not checked if marginal ROC is higher than marginal WACC.

Posted by Koon Yew Yin > 2013-11-06 12:17 | Report Abuse

Hi

I must thank all the people who have commented on my article 'How to be a super investor?'. My intention for writing the piece is honourable because I believe Jaya Tiasa is really undervalue and I wish I have enough money to buy up all the shares, provided all the shareholders will sell their shares to me. As I said, you must buy when it is on cheap sale and it is vitally important to look at the profit growth prospect if you want to be a super investor to make huge profit.

I wish to invite all those who have made commentaries including anyone who is interested to meet me this Saturday 9th Nov at 5 PM at Meru Golf Resort, Club House, Jelapang, Ipoh. After the chat, I will give you all a good diner in the club house. Please SMS 017-5577822 asap so that I can reserved some Wagyu Beef for you.

Please remember, I am not asking you to buy JT. I just like to meet people. I am nearly 81 years old and I have written in my will to give away all my wealth to charity when I die. Almost all my wealth is from the stock market. You can google my name if you want to know more about me.

Koon Yew Yin

Posted by MG9231 > 2013-11-06 12:28 | Report Abuse

Mr Koon Yew Yin, You have my due respect and at your this age you are not just concern abt yourself and those who wish enrich themselves via investment but our beloved country as i used to read some of your articles is malaysiakini.

Posted by Ooi Teik Bee > 2013-11-06 12:29 |

Post removed.Why?

Posted by inwest88 > 2013-11-06 12:35 | Report Abuse

# Mr. Koon - many thanks for your generosity in inviting us a meal. If only it's in KL / PJ but the main reason is to meet you in person who is so successful in life and who has done so much for charity. You are a living example !

Posted by lmenwe > 2013-11-06 17:11 | Report Abuse

JT Yeo pls note that the plantation counters have to fork out a lot of capital to plant the trees and build the mills. And there are no fruits produced in 3 years time. 4-7 years the tree will be bearing fruit but it is hard for planters to break even during this period. The trees will enter high growth phase after 7 years and reach their prime at around 10 years old. Hence it is normal for new planter to fork out tonnes of money in the initial phase.

Posted by lmenwe > 2013-11-06 17:15 | Report Abuse

Opps I thought this is a dummy account. I admit that some of my posts in dali's blog are a bit over but I am not intended to assault you. I just want to share that people will never appreciate someone's hard work for some multi begger but they will insult you when your recommendation fail. Btw nice to meet you. hope that you will post more.

Posted by JTFX > 2013-11-06 17:28 | Report Abuse

Mr. Koon, i salute u and ur many charitable work n efforts to help the poor n needy.in return, i wish u a vry healthy n happy life..cheers..

Posted by sense maker > 2013-11-07 00:57 | Report Abuse

Mr Koon has my respect and a good model for everyone to emulate. Thanks for dropping in.

Posted by bsngpg > 2013-11-07 09:38 | Report Abuse

Open New Thread to Share Your Great Investment Philosophy and Life Experience.

Hi the Great Mr Koon:

I started to know you during the incident of Kampar TAR-30 million for hostel and since then have followed you till today. I can understand why your good deed was rejected to protect their self interest. If they have great heart as you, they would not be abandoned by Chinese community at least in Kampar area. Do you know that till today, my heart is still painful whenever this incident pops up into my mind like now? In fact I have only 3 letter words for them on this incident.

From many of your posted articles, I can feel your sincerity and passion in bringing goodies to the community, be it on society fairness, corporate efficiency, direction of the country building and not to forget the investment and etc.

JTiasa :
I am an old fashion Chinese who see trust as one of the very important elements in the life core value. I trusted you till just followed you jumping into JTiasa at its height at RM3.20 in Apr 2012, even thought JTiasa did not meet most of my criteria on share selection at that time and even today. Not only that, I even bought in more 2 months ago and also reminded others who believe in you to follow suit. We (at least myself) take our own risk and responsibility on our action.

Wish :
Dear Mr Koon, I really hope you can open a thread in i3 to share your great investment philosophy and also life experience. Through your thread, many can post question to get your opinion or guidance. I see this is another area you can pour in your great knowhow and charity heart.

Thanks :
I met Mr(Wu)胡萬鐸 of Shen Jai in Kledang Hill, I miss the opportunity to meet another Tiger in Meru hill this weekend as I am in oversea now, sooo unfortunate. Thank you very much for the great invitation.
I visit Ming Kok frequently, hopefully one day I can meet you somewhere.

Have a good health to see the “Old Horse”to go first, OK ?

Thank you.

Posted by Tracy Jia Wen > 2013-11-07 09:54 | Report Abuse

Thank you for your great sharing. Your twsplant article impressed me.

Posted by Koon Yew Yin > 2013-11-07 11:08 | Report Abuse

I refer to Tan KW's comment. He wishes to know my view on the CAPEX and Free Cash Flow on Jaya Tiasa. Sorry, I really do not understand the meaning of these two accounting terms because I am only a 80 years old retired civil engineer. I selected Jaya Tiasa basing on my common sense as a businessman.

Although my article looks very professional because of the 2 charts showing the FFB production for various palm ages and the planting programme which I copied from an article by CIMB Bank analyst report and I calculated the FFB production for the current year and for 2016 like any engineer or anyone with some elementary knowledge of mathematics. My calculation shows that JT has tremendous profit growth prospect which I consider the most important stock selection criterion.

Moreover, JT owns about 2400 sq kilometre of forest and operates one of the largest if not the largest plywood and sawn timber businesses in Malaysia. They have been cutting down the forest and use the proceeds to plant 62,200 ha of oil palms and more than 32,000 ha of fast growing trees. That is why they are currently not showing much profit in the last several years and professional fund managers and normal investors do not buy this share. That is why its share price is on cheap sale in the last few years. But I know the company is undervalued.

As I said before, just basing on Boustead Holdings, one of the leading and highly respected Malaysian company's buying 2410 ha of oil palm plantation at Rm 77,000 per ha and IOI, the richest Malaysian Chinese controlled plantation company's buying Harn Len's plantation at Rm 79,000 per ha Jaya Tiasa's 62,200 ha is worth more than twice its market capitalization. I wish I have all the money to buy all the issued shares of JT.

As a businessman looking at JT, the company has almost unlimited supply of timber from its large forest and its reforestation to generate cash which it has been using to plant oil palms since 2002,11 years ago. On top of this cash, it has been borrowing from banks to accelerate its planting.

Again as a businessman, I consider borrowing money to do more business is good if the management is able to make more profit than the interest rate for borrowing. For any small cap company, it must borrow money to do more business; otherwise I consider it inefficient.

Lending money is the banks' main business and banks will lend money to only good companies. I consider Jaya Tiasa is a very efficient company and many banks would like to have this type of customer.

You must remember, oil palms will bear fruits after 4 years of planting and will continue to bear fruits even after 25 years and the average production cost is about Rm 1,400 per ton of crude palm oil while the selling price in the last few years ranges between Rm 2,300 - 3,500 per ton. What business can give you more than 100% return per year, over a long period ?

Koon Yew Yin

Posted by bsngpg > 2013-11-07 11:57 | Report Abuse

Dear Mr Koon :
Wow! You first statement admitting that you do not understand CAPEX and Free Cash Flow has surprised, touched my heart and gained my highest respect already. In our society, many people pretend they know everything and infallible, let alone admitting any shortcoming especially people like you carrying high level of reputation in business circle. Salute you and will behave as you in this perspective.

But “Taiko”, honestly as the founder of 4 largest construction companies, how to convince me that you do not understand CAPEX and FCF ?

Thank you.

Posted by sense maker > 2013-11-07 12:18 | Report Abuse

I spent half an hour on Jtiasa last night. Here is my view:

The current concern: Jtiasa is in net current liability position of RM180m, mainly because of its RM408m short-term borrowing. So, the company has to refinance or reschedule repayment of this short-term borrowing to a long-term borrowing, or makes a cash call at its shareholders or do another private placement, rather soon.

For FYE ending 2012 when CPO was good, its oil palm biz recorded 30% Profit before tax. However, when CPO plunged in the past 12 months, its oil palm biz went into loss before tax.

In 2015, the produciton volume of oil palm will increase by 200% from 2013. Given the expected production cost increase in coming years, profit margin may recover 50% in 2015 i.e at a level between now and 2012, the company should register RM450m PBT. At effective tax rate of 25%, we will have RM337m PAT in 2015. At a market capitalisation of RM2.24b, it is a PE of 6.6.

So, Jtiasa is really a CPO play. 6.6 times of PE is quite fair. Beyond 2015, there would be some replanting capex coming in, I guess roughly cancelling the effect of further expansion of prime mature area.

Posted by tonylim > 2013-11-07 12:27 | Report Abuse

Mr Koon, great to see you here giving time to fellow malaysians.

Your thoughts be it philantrohic or business investment touches my heart every time I read about your contribution to society.

Posted by mlg123 > 2013-11-07 12:29 | Report Abuse

mr.koon

you used to be one of the largest shareholder in GUH.
may i know your reasons for exiting from GUH

thanks

Posted by GL Khoo > 2013-11-07 12:35 | Report Abuse

Dear Mr.Koon: I first heard about you from an email concerning the hostel that you wanted to donate to Utar in Kampar and have since been one of your admirer. I have read a few articles written by you especially during the recent elections. I followed your recommendation to buy coastal but unfortunately I chased after it has risen quite high.This world definitely need more generous, caring and outspoken people like you.I am from Penang and would love to meet you in person but I am just an ordinary person and I am wondering whether the Meru Golf resort has any dress code or regulations which may be intimidating to ordinary folks like me.Lastly allow me to wish you a long and healthy and happy life as we need you to be around for a long,long time. Bless you!

Posted by bsngpg > 2013-11-07 12:36 | Report Abuse

Sense Maker: appreciate your hard work and contribution. Thks

Posted by messi > 2013-11-07 13:57 | Report Abuse

Mr Koon, are you the real Mr Koon Yew Yin who offered to donate RM30 million to UTAR to build a hostel? Is there a way to autheticate ?

Sorry for my suspicion because there could be impostors in i3. Messi is a good example.

If it is truly you, Mr Koon, it goes to show that you are a very humble tycoon to participate in i3 interacting with other forummers. My salute to you.

Posted by lmenwe > 2013-11-07 17:10 | Report Abuse

Dear Sense maker, first you are using a ridiculously high yield of 28 tonnes/ha for jtiasa. Please be alert that Sarawak’s peak soil is well known to the world for not suitable for planting oil palm. As far as I know there is only 1 counter in the world that are able to achieve this kind of fabulous yield that is united plantation. Sorry to insult you that jtiasa’s management and soil quality is no way comparable to the great united plantation. It will be a miracle if their yield is above 26 tonnes/ha over the long run. Moreover you are using another ridiculous assumption of CPO price at RM 3600 per tonne. Please be alert that currently there is no shortage of palm oil. The previous boom was caused by extremely bad soybean production due to the worst weather pattern in a few decades time in South and North America. Furthermore during the past 10 years there are a lot of expansions in Indonesia and they are still expanding. To make the matter worst, some tycoons will plant oil palm in Africa. Please have a look on long term price level of palm oil and other crops. The most important thing is have a look on price chart of deeply depress crops like sugar and coffee to get a clue that how depress the price can go when the supply totally outpace demand! Last base on management guideline there are only 51.09% of the trees enter the prime stage of 7 years old or more. It is impossible for them to achieve a yield of 28 tonnes/ha. Hence my conclusion is you are using some ridiculous assumption to make jtiasa looks attractive. Sorry for the nasty words that I use but I just wish to point out all the flaws in your assumption.

Posted by lmenwe > 2013-11-07 17:15 | Report Abuse

I disagree with Mr Koon's valuation base on market price/ha. First liquidation will not happen on Jtiasa. Next even liquidation did happen I don't think there will be planters willing to pay the hefty price tag. Indonesia's land are less than 1/10 of Malaysia's price and their land are more fruitful than ours. The brilliant planters are KLK and Sime Darby. They had enter Indonesia many years ago and that's before others go for planting frenzy in Indonesia.Now KLK and Sime already change the expansion target from Indonesia to Africa. I can foresee more and more tycoons will follow their footstep as the cost are always lower than Malaysia.

Posted by sense maker > 2013-11-07 17:47 | Report Abuse

Imenwe, as I said, I spent just half-an-hour on it last night. As you can see, I use very broad generalisation based on pubished financial information. I did not even look at the yield.

I said the current price is quite fair based on 2015 projected profit. I did not say it is attractive. It has concerns on short-term borrowing and lack of dividend, not least.

I think my review is fair, unbiased.

Posted by lmenwe > 2013-11-07 18:30 | Report Abuse

nope your view are totally bias and you believe that cpo will have a boom. the yield are totally ridiculous for a counter with more than 48% of their trees below prime. If you price it at RM 2,800 - RM 3,000 per tonne even though I will say it is over optimistic but it is not ridiculous. however a price tag above RM 3,600 I can only say this is totally ridiculous without a severe weather change that cause shortage of supply. Last the labour cost of jaya tiasa definitely will be higher than 2012 due to minimum wage rate hence the profit margin definitely will be lower than 2012.

Posted by bsngpg > 2013-11-07 19:31 | Report Abuse

Hi sense maker and Imenwe : pls continue your high quality discussion as the deeper you discuss, the clearer picture is painted for readers. I like your discussion very much as there are some points I knew before and some are new to me that make it very interesting.

I wish to participate but my knowhow is too far below, so bad.

I guess background of Sense maker is not related to plantation industry and his opinion is derived from biz common sense whereas Imenwe may come from the industry with insight.

Whatever it is, both of you are greatly appreciated. Thank you very much.

Posted by sense maker > 2013-11-07 22:18 | Report Abuse

Imenwe clearly did not read properly. I wrote that profit margin may recover 50% in 2015 from now, not CPO price recovers 50%. If he was discerning, he also knows I referred profit margin here to profit before tax level. I hope he can differentiate the difference between profit margin and CPO price before jumping to his foregone conclusion.

Posted by Koon Yew Yin > 2013-11-07 23:20 | Report Abuse

Response to comments on ‘How to be a super investor?’
I refer to Tan KW's comment. He wishes to know my view on the CAPEX and Free Cash Flow on Jaya Tiasa. Sorry, I really do not understand the meaning of these two accounting terms because I am only a 80 years old retired civil engineer. I selected Jaya Tiasa basing on my common sense as a businessman.
Although my article looks very professional because of the 2 charts showing the FFB production for various palm ages and the planting programme which I copied from an article by CIMB Bank analyst report and I calculated the FFB production for the current year and for 2016 like any engineer or anyone with some elementary knowledge of mathematics. My calculation shows that JT has tremendous profit growth prospect which I consider the most important stock selection criterion.
Moreover, JT owns about 2400 sq kilometre of forest and operates one of the largest if not the largest plywood and sawn timber businesses in Malaysia. They have been cutting down the forest and use the proceeds to plant 62,200 ha of oil palms and more than 32,000 ha of fast growing trees. That is why they are currently not showing much profit in the last several years and professional fund managers and normal investors do not buy this share. That is why its share price is on cheap sale in the last few years. But I know the company is undervalued.
As I said before, just basing on Boustead Holdings, one of the leading and highly respected Malaysian company's buying 2410 ha of oil palm plantation at Rm 77,000 per ha and IOI, the richest Malaysian Chinese controlled plantation company's buying Harn Len's plantation at Rm 79,000 per ha Jaya Tiasa's 62,200 ha is worth more than twice its market capitalization. I wish I have all the money to buy all the issued shares of JT.
As a businessman looking at JT, the company has almost unlimited supply of timber from its large forest and its reforestation to generate cash which it has been using to plant oil palms since 2002,11 years ago. On top of this cash, it has been borrowing from banks to accelerate its planting.
Again as a businessman, I consider borrowing money to do more business is good if the management is able to make more profit than the interest rate for borrowing. For any small cap company, it must borrow money to do more business; otherwise I consider it inefficient.
Lending money is the banks' main business and banks will lend money to only good companies. I consider Jaya Tiasa is a very efficient company and many banks would like to have this type of customer.
You must remember, oil palms will bear fruits after 4 years of planting and will continue to bear fruits even after 25 years and the average production cost is about Rm 1,400 per ton of crude palm oil while the selling price in the last few years ranges between Rm 2,300 - 3,500 per ton. What business can give you more than 100% return per year, over a long period ?
Plywood and sawn timber: As I said earlier, JT is one of the largest plywood and sawn timber producer in Malaysia and it has almost unlimited raw material supply from its own forest. How Chinese, Korean, Taiwanese or Indian manufacturers compete with JT? Koon Yew Yin 7th Nov 2013

Posted by lmenwe > 2013-11-08 01:21 | Report Abuse

Dear sense maker come on have u really make a calculation for your assumption? FFB jump 200% in 2015 that mean 657,000 x 3 = 1,971,000 tonnes. OER of 21% = CPO of 413,910 tonnes. Assume a profit before tax margin of 30% and PBT of RM 450 million. So revenue will be RM 450 million/0.3 = RM 1.5 billion. CPO price =RM 1.5 billion/ 413, 910 = RM 3,623.98 per tonne. If your PBT margin is lower to 25% it will be even worst! The revenue will become RM 1.8 billion and CPO per tonne will be RM 4,348. If PBT margin was up to 40% (at which I think is impossible for jaya tiasa who fail in their cost management) the revenue will be RM 1.125 billion and CPO per tonne at RM 2,717. CPO at RM 2,700 per tonne sounds more reasonable but do you think Jaya Tiasa able to get PBT margin at 40%? If you are talking about a ridiculous high PBT margin of 50% the revenue will be RM 450 million/0.5 = RM 900 million and CPO price will be RM 900 million/ 413,910 = RM 2,174. Oops the price is even lower than now. At this price tag I believe all planters profit margin will be even lower. At a price of RM 2,174 Jaya Tiasa still get a PBT margin of 50% than this will be a miracle! I hope that I don’t have to be a math teacher next time.

Posted by tsurukame > 2013-11-08 02:07 | Report Abuse

Dear Mr Koon Yew Yin,

Greetings to you and family members and wishing you best of health , longevity and happiness.

Thank you for graciously sharing the info and your thoughts on valuation of JTiasa's palm oil cum timber plantation business from a businessman's fundamental investment point of view which I do appreciate immensely. Your articles have opened up my views on the basic critical approach and baisc info required in looking at investment from a business man point of view and I do concur with your views.

Every Investor have their preferred approach on Investment but I prefer to approach Investment based on fundamental analysis to decide on company to invest and technical analysis to determine appropriate time of entry

I must communicate forthright to you that I am not an expert on valuation of palm oil cum timber plantation business as in JTiasa and others. However I am very keen to know on current relative performance of plantation companies in Malaysia and Indonesia and the future drivers that will result in quantum profit leaps and increasing cash generation on yearly basis in the future.

I understand from the info supplied that the future drivers of increasing profits for J Tiasa is the increasing number of trees reaching maturity age of 7 years onward as current crop of trees are still very young assuming palm oil price rages between RM 2,500 to say RM 3,000 per ton. Having said that, what is the relative competitive yield per acre, acreage planted of JTiasa compared to its peers say TSH in Sabah, TDM in Peninsular Malaysia? I understand that there are several factors that influence yields per acre such as type of soil(peat versus volcanic based), the age profile of trees, the type of oil palm trees being planted, the acreage area being planted, proximity of planted areas, consistent fertilization programme, the management efficiency in bringing fruits for processing in palm oil mills, type of weather are important causal factors that determine yields per acre and future profits.

It has been reported that Indonesian soil is much more fertile for oil palms to yield easily 20% to 30% fruits per acre. Besides the soil, I understand that TSH and others had cloned Oil Palms that yield easily 30% more fruits and I assume that this oil palm variety is also planted on Indonesian soil as well.

I concur with your view that JTiasa per se will have fantastic profit growth in the future years due to increasing acreage and increasing maturity of oil palm trees although it has an additional profit contributor from its timber business. However as a long term investor, one must also be mindful of the relative competitiveness of JTiasa to emerging threats from new players from Malaysia, Indonesia that have more acreage, better soil condition , lower labour and production cost, lean and better management and other competitive factors that drives up Total profits and increasing Earnings per share....

I will appreciate very much your feedback views on the above.

Thank you, Good night und "schalfen sie gut"

Posted by lmenwe > 2013-11-08 05:42 | Report Abuse

Dear Mr Koon I believe your profit margin is way too optimistic. Let us use some of the more efficient counters to compare. For united plantation their net profit margins from 2007 – 2012 only at a range between 26.72% – 34.39%. First Resources are well known for its cost control however their profit margins also range between 29% - 35%. For the timber business industry sorry I have a different view. There is no branding in Jaya Tiasa’s product. The consumer won’t say they will only buy Jaya Tiasa’s product. If timber is so good like what you claim they will never enter palm oil business. For your info Jaya Tiasa are not the beloved darling of banks. Cash cow like MCD, Yum Brands, Nestle are some of the darlings of banks. Their interest can go below the market rate. And last for trees above 25 years old the yield will drop significantly and this is what Felda are facing now.

Posted by sense maker > 2013-11-08 09:00 | Report Abuse

Imenwe, Jtiasa also has log and wood processing biz which are quite profitable. I am not sure the prospect of these 2 sectors. As I said, in the half an hour, I just used a generalisation or extrapolation based on latest quarterly results.

Posted by Jonathan Keung > 2013-11-08 09:24 | Report Abuse

Mr Koon thoughts on JT is highly interesting. Nonetheless, the forecast is on the Company future performance ( i.e.next 3-4 years ) we need to be aware of the future changes( eg. Company Management, demand and supply etc ) which will have an impact. Buy at your own risk and do not blame anyone. Once again, thanks for sharing your thoughts

Posted by inwest88 > 2013-11-08 09:27 | Report Abuse

# Very informative and beneficial views from Imenwe and sense maker. Both have their points and so does Mr. Koon. No one can judge who is right or wrong. whatever said, it cannot be denied that the price is inching up slowly and surely with increased volumes. That's the most important to the holders of this stock.

Posted by bsngpg > 2013-11-08 10:19 | Report Abuse

All of them have very good points, I learnt a lot from them on palm oil industry. As I come from technical field(not in share), I give my vote to Imenwe.