u see I'm right.Please hold for 3-5 trading day more. Jaya Tiasa blog 88 cents Michael Kwok 1075 posts Posted by Michael Kwok > Dec 16, 2019 7:35 PM | Report Abuse X
High prices for CPO, tho might only be for 3qtr, would mean maybe 500m profit. Listed newfields come up with inital debt of hundreds of millions,preparing & buying and and planting is not cheap! Esp if it's well planned for efficient harvesting and yield.
The company becomes wildly profitable after the loans are paid off. Which takes years of "good" prices, but a windfall year could settle it all early. What's left is owning a share in a debt free, brand new, top notch, cash flow generating plantation.
Market cap of 1b now? It's at least more than 2.5b spent on capex & assets alone. It's like you go buy a 100 acre plantation with palm oil mill that he build for 10m, and u buy for 5m.
And this is owned by the king of sarawak. He'll keep getting more land..
Fyi - capex historical was 5b and more. So here is a wonderful company, that did everything right. Planted 86k ha, wait till they mature, service their debts until the time is ripe. And it's for sale for 1 Billion. And at 3100 CPO price, 82k CPO production -> 255m revenue @ 153m profit just from CPO. In 5 months they can pay all their hutang and the corrosive interests.
and all cash flow then can use to plant their forest concession with more and more plants.
All selling for 1 Billion now. Why is the world so mean?
Don't mean to push - yes many plantations, the older ones. I think overvalued, at the right value, or yeah maybe a bit cheaper than it should be, definitely not multiple baggers.
But jayatiasa..
But would you buy KLK if its 80% down with same cashflow n fundamentals? Now that's a sure 5 bagger.
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smallfisher
85 posts
Posted by smallfisher > 2019-12-19 12:21 | Report Abuse
drop drop drop…… wait and see