Posted by Hiu Chee Keong > 2016-05-01 15:13 | Report Abuse

But they can't just sell their land, it is a plantation land not commercial land. And their ROE EPS is falling, PE also extreme high. Maybe El nino will boost them up this quarter, so i trust you, i will put it in my watch list.

Posted by calvintaneng > 2016-05-01 15:23 | Report Abuse

Hiu Chee Keong But they can't just sell their land, it is a plantation land not commercial land. And their ROE EPS is falling, PE also extreme high. Maybe El nino will boost them up this quarter, so i trust you, i will put it in my watch list.
01/05/2016 15:13

Calvin replies:

Last time I SEE Perak Corp got 1,000 acres prime land in Lumut. And Perak Corp was only 60 cents with NTA over Rm2.00.

So I called my Friend Mr Lee of Sitiawan, Sri Manjung to buy some Perak Corp shares. Mr Lee then called his Remisiers in Sri Manjung and Perak to get their "expert" opinions.

They poured cold water on Perak Corp as they saw nothing good in Perak. All young people already left Perak for the bright lights of KL. Only old people and young children left in Perak. As for Lumut - there is a naval base there - so nothing good will come out of it.

Surprise of surprises! Perak Corp powered up to Rm3.60. And Company wanted to take it private. But shareholders opposed it and think Perak Corp is worth much more than Rm4.00. At those times Perak Corp traded between 40 cts to 60 cts only.

And that WAS THE TIME TO BUY! NOT NOW!

THE TIME TO BUY MHC PLANTATIONS IS NOW!!

BY THE TIME MR MARKET DISCOVERS MHC PLANT IT WILL BE TOO LATE TO BUY CHEAP!

Posted by Hiu Chee Keong > 2016-05-01 15:36 | Report Abuse

Persk corp is commercial lands different value with plantation lands. When properties and commercial lands shot up in 2014, it price also shot up. I will keep my eye on MHC, thanks.

Posted by calvintaneng > 2016-05-01 16:23 | Report Abuse

Posted by Hiu Chee Keong > May 1, 2016 03:36 PM | Report Abuse

Persk corp is commercial lands different value with plantation lands. When properties and commercial lands shot up in 2014, it price also shot up. I will keep my eye on MHC, thanks.


Do you know any plantation lands going at Rm3,739 per acre?

Not possible. Why not?

At first all lands are wild jungle lands, desert or swamp lands.

Too swampy? You can't plant any Oil Palms. Too dry like Sahara desert. Also useless. Too steep mountainous terrain? Not accessible.

So you must first clear then lands by cutting down trees and vegetation. Then you must build roads, drainage and other accesss to the lands. After that you must buy seelings. 8 months old to 1.3 year old young oil palm trees cost anywhere from Rm15 to Rm25 per plant.

So they call these biological assets.

Now Plantation lands with mature oil palm trees cost anywhere from Rm40,000 to Rm500,000 an acre in Peninsular Malaysia.

Those pure Oil Palm lands go for Rm40,000 to Rm80,000 per acre. And those with potential for conversion to residential or commercial or industrial use might range from Rm100,000 to Rm1 millions or more an acre - depending on its location.

So MHC Plantation lands with its biological assets will be worth Rm40,000 per acre at the very least or more than 10x the book value price of Rm3,739 per acre.

Now book value of MHC Plant is revalued should be more than Rm5.00 to Rm10.00 or more NTA!

So MHC Plant should be a screaming buy?

Only deep value investors (maybe less than 1 per cent will buy. The rest will still going on chasing hot stocks of the day like "Transmile, Megan Media, Kenmark, Maemode or Patimas.

I hope you will take heed.

Posted by SALAM > 2016-05-01 18:43 | Report Abuse

Calvin, What is your opinion of KSeng then?

Posted by calvintaneng > 2016-05-01 18:50 | Report Abuse

Posted by SALAM > May 1, 2016 06:43 PM | Report Abuse

Calvin, What is your opinion of KSeng then?

KSeng is good.

But THESE ARE Better!

DAIMAN (Company is now pro active)
PLENITUDE (IKEA Coming to Plenitude's Tebrau City)

Posted by ykloh > 2016-05-01 19:07 | Report Abuse

KLK has thousands of acres between Ipoh and Batu Gajah. Part of which has been developed but the area is grossly overdeveloped and hundreds of houses and shops begging for buyers.

Posted by ykloh > 2016-05-01 19:09 | Report Abuse

Also, MHC only listed not too long ago. Why should they go public with so much cheap land?

Posted by calvintaneng > 2016-05-01 19:10 | Report Abuse

Posted by ykloh > May 1, 2016 07:07 PM | Report Abuse

KLK has thousands of acres between Ipoh and Batu Gajah. Part of which has been developed but the area is grossly overdeveloped and hundreds of houses and shops begging for buyers.


If there is overbuilding the best option is to go for agriculture.

And with El Nino going into 2017 & 2018 CPO prices will soon cross Rm3,000 a tonne

Posted by Alphabeta > 2016-05-01 21:39 | Report Abuse

I would use these parameters to benchmark valuation of pure upstream players:
a> Enterprise Value per hectare,
b> FFB yeild per hectare - Plantation operation,
c> CPO oil extration rate - % per mt of FFB on milling operation,

If we benchmark MHC (FY12/14) performance with Genting Pltn (FY12/14), IJM Pltn (FY 03/15), TH Pltn(FY12/14) and Kretam (FY12/14)

Figures are calculated based on Plantation operation data published in MHC co. Website. MHC's EV/Ha(Planted area) is not cheap compared to other upstream players.


MHC RM 83.6 mil/Ha, 20.50 mt/Ha, 20.28%/mt of FFB
Genting RM 60.9 mil/Ha, 20.10 mt/Ha, 22.10%/mt of FFB
IJM RM 55.8 mil/Ha, 25.60 mt/Ha, 20.90%/mt of FFB
TH RM 43.7 mil/Ha, 20.52 mt/Ha, 20.19%/mt of FFB
Kretam RM 46.9 mil/Ha, 22.46 mt/Ha, 21.23%/mt of FFB

Posted by calvintaneng > 2016-05-01 22:19 | Report Abuse

Posted by Alphabeta > May 1, 2016 09:39 PM | Report Abuse

I would use these parameters to benchmark valuation of pure upstream players:
a> Enterprise Value per hectare,
b> FFB yeild per hectare - Plantation operation,
c> CPO oil extration rate - % per mt of FFB on milling operation,

If we benchmark MHC (FY12/14) performance with Genting Pltn (FY12/14), IJM Pltn (FY 03/15), TH Pltn(FY12/14) and Kretam (FY12/14)

Figures are calculated based on Plantation operation data published in MHC co. Website. MHC's EV/Ha(Planted area) is not cheap compared to other upstream players.


MHC RM 83.6 mil/Ha, 20.50 mt/Ha, 20.28%/mt of FFB
Genting RM 60.9 mil/Ha, 20.10 mt/Ha, 22.10%/mt of FFB
IJM RM 55.8 mil/Ha, 25.60 mt/Ha, 20.90%/mt of FFB
TH RM 43.7 mil/Ha, 20.52 mt/Ha, 20.19%/mt of FFB
Kretam RM 46.9 mil/Ha, 22.46 mt/Ha, 21.23%/mt of FFB

Calvin answers:

MHC FFB is not too bad compared to others.

However, that was not the investment angle I want to highlight.

For dividend yield BPlant will be the best overall.

My Focus is on 2 particular points

1) MHC Plant has deep hidden value unknown to casual readers.
2) Insiders are buying like no tomorrow.

This was what happened to Perak Corp between 40 cts to 60 cts. So many remisiers have missed Perak Corp by looking at the wrong benchmark then

Same goes for Pm Corp when it was only 9 cents. For whole year of 2012 Pm Corp was traded around a flat price of only 9 cents.

So many stock brokers, accountants & "experts" I spoke to then totaaly rejected PM Corp at 9 cents.

My Awning Boss Friend Bought Pm Corp at 9 cents. His 700,000 shares cost Rm63K then. On May 16th 2016 he will receive a nice RM56K Cash Pay out.

After that his Cost of Pm Corp is only 1 cent. (9 cents cost minus 8 cents cash pay out). If he decides to sell at 28 cts he would have grossed 200% profit

For those who bought Perak Corp at 40 cents did even better. At Rm3.60 it was a 800% profit.

At the end of the day it is not how well we calculate or how clever is our investment knowledge.

IT IS THE BOTTOM LINES THAT COUNT!

And So I will Buy Even if 99.9% of the Remisiers, Accountants or expert Fund Mangers disagree. It doesn't matter at all.

I want to be in the Top 1%

The Top 1% in the World owns half the world's wealth

Only Top 10% make money

Another 10% will just break even

And the majority 80% of day traders, gamblers & those who chase hot stocks of the day, of the hour, of the minutes will all end up as losers

On that I am sure as statistics have proved it. Again and again lambs are led to the slaughter.

Posted by Alphabeta > 2016-05-01 22:28 | Report Abuse

Sorry, the EV/Ha are denominated in Thousand not mil.

Posted by calvintaneng > 2016-05-01 22:33 | Report Abuse

Alphabeta Sorry, the EV/Ha are denominated in Thousand not mil.
01/05/2016 22:28

It's Ok

I suggest you buy this book

THE INTELLIGENT INVESTOR

By Benjamin Graham

Then just read the Last Chapter Called

THE SUPER INVESTORS OF GRAHAM & DODDSVILLE by Warren Buffet himself.

Read this chapter again and again and again 100 times till you get the message.

Good luck

Posted by speakup > 2016-05-01 23:05 | Report Abuse

MHC & Cepat are same owners. If MHC up, Cepat up.

Posted by shareinvestor88 > 2016-05-02 09:41 | Report Abuse

Dear Calvin thank u for this article. What do u think of Innoprise plant ?

Posted by shareinvestor88 > 2016-05-02 09:48 | Report Abuse

Is innoprise a value buy ?

Posted by calvintaneng > 2016-05-02 10:17 | Report Abuse

Shareinvestor88,

Good morning,

Innoprise 52 weeks low and high are 55 cents & Rm1.63.

It went through a capital exercise of share split of one share into 2 with 1 rights for 4 split shares. The right is priced at 50 cents.

At the current closing price of 67 cents if we worked it backward it should be

67 cts x 2 = Rm1.34 (Add 4.25 for further dilution of rights) = Rm1.37.25

So comparing Rm1.37.25 to year high of Rm1.63 shows a 16% discount.

I think Innoprise current price is not cheap.

However, as a rising tide lifts all boats Innoprise will also move up by the power of El Nino. It should be ok.

Posted by SALAM > 2016-05-02 11:57 | Report Abuse

The question is unless Directors are planning some corporate moves beneficial to minority shareholders, retail investors are not going to get anything extra in capital appreciation even though the shares are deep deep in value esp plantation companies. Look at KSeng and recently Delloyd and more....
Am I right Sifu Calvin?

Posted by calvintaneng > 2016-05-02 12:14 | Report Abuse

SALAM,

Price can move due to these factors:

1) Sudden or gradual surge in earnings. Like export stocks due to US Dollar spike
2) Revaluation of assets. Like EG, Seacera, HapSeng. They revalue assets and book them as profits.
3) Revaluation of assets and book them as profits then give dividend like OKA.
4) Revaluation of Assets. Then Dispose them & book them as profits like Pm Corp selling Singapore Warehouse to Sing Loong.
5) Company so undervalue that there is a buy out like Kulim & TMakmur being taken private with 30% to 60% windfall.

Of all the above the best is still number 1

El Nino will greatly increase the profits of MHC Plant. And since MHC Plant is so undervalue I won't be surprise to see it being taken private like my 2 other recommended stocks - Kulim & TMakmur.