last year Jtiasa main concern was high fertilizer cost and lack of fruit harvestors
by now fertilizer cost has come down by 30% and with land borders opened there is now sufficient fruit harvesters
one good positive is most of Jtiasa oil palms are located near their own mills and this will prevent selling Ffb at lower cost for those that do not own their own mills
This will capture the best price as Cpo prices are traded by daily indicators unlike Ffb sold to mills at their dictates
All round bright prospects in Jtiasa's growth now and at its best years to come
Looking ahead what are the positive supporting factors for Cpo?
Answer:
1. Palm oil is the most economical vege oil to produce it only take 1/7 of land to produce a ton of Cpo compared to soyoil, canola or sunflower seed oil
So palmoil will remain competitive and stay relevant
2. Palmoil is used in 50% of all Supermarket items like toothpaste, cooking oil, bread, biscuit, cake, ice- cream, hair cream, soap, shampoo, teh tarik creamer and many others like milo and maggee mee and as such it is recession proof
3. There is a shortfall in planting or expansion while more palm oil lands been converted to housing, industries and townships
4. World population growth will need more vege oil
5. Climate change and havoc impact shrubs like soybean or canola plant but palmoil being up to 60 feet tall can withstand and survive
6. Palm oil lands are appreciating assets which is very different from all others Residual value can spring a surprise bounty of value unlocking by very high prices of lands in the direction of growth
Overall palm oil companies never or seldom go bankrupt even during 1997/8 Asian Financial Crisis when 49 banks failed and shrunk to less than 8 tier one Banks left today
One more strong supporting factor is Indonesia's thrust into Biofuel
Indonesia wants to save on foreign exchange due to high crude oil imports
So it is diverting to Biofuel from fossil fuel
At current time B35 is implemented and millions of tonnes of Cpo are converted to energy
When B35 eventually reaches B100 they will take up over 70% of all Cpo produced in Indonesia
By then Cpo prices will remain elevated as supply not enough to meet demand
This is a fundamental long term structural support for a sun rising industry like clean green palmoil as biofuel without sulphur or other polluting danger
Palm oil demand boosted as rival oil prices jump on supply woes Vegoils
MUMBAI (Aug 10): Demand for palm oil has been increasing as its discount to soyoil and sunoil has grown, driven by the recent price rise in rival oils due to production concerns in the US and supply disruptions from the Black Sea region, industry officials said.
This surge in demand is expected to assist Indonesia and Malaysia in bringing down their palm oil inventories, simultaneously bolstering Malaysian palm oil futures.
"Aggressive pricing has been aiding palm oil as buyers are shifting toward palm oil from other oils for near-month shipments," said Sanjeev Asthana, chief executive officer at Patanjali Foods Ltd, India's top palm oil buyer.
India, the world's biggest buyer of edible oils, imported 1.09 million metric tonnes of palm oil in July, nearly 60% more than June and the highest in seven months.
India's imports would remain robust during August and September as well, Asthana said.
Crude palm oil is offered at US$910 (RM4,162) a tonne including cost, insurance and freight (CIF) to India for September shipments, compared with US$1,050 for crude soyoil and US$1,010 for crude sunflower oil, dealers said.
Soyoil prices jumped in the last one month on production concerns in the US and lower supplies from top exporting Argentina, while sunflower oil became expensive after Russia withdrew from the Black Sea grains deal, said a New Delhi based dealer with a global trade house.
The Black Sea region accounts for 60% of world sunflower oil output and 76% of exports.
"Palm oil prices didn't rise; instead, they came down due to rising stocks in the producing countries and become even more cheaper for buyers," the dealer said.
Price-sensitive Asian buyers traditionally rely on palm oil because of low costs and quick shipping times.
Along with India, China, Bangladesh and Pakistan have also been raising palm oil purchases for August and September shipments, said a Mumbai-based trader.
China's July vegetable oil imports, which mainly consist palm oil, jumped 48% from a year ago to 778,000 tonnes.
Palm oil's discount to rival oils is likely to come down gradually as rising exports would bring down the inventories in both Malaysia and Indonesia, the trader said.
Malaysia's palm oil exports rose 15.55% to 1.35 million tonnes in July, according to the Malaysian Palm Oil Board. In the first ten days of August, exports of Malaysian palm oil products rose 17.5% to 383,795 tonnes, AmSpec Agri Malaysia said on Thursday (Aug 10).
Read also: Malaysia's end-July palm oil stocks at five-month high
1) Future Wealth is represented by a young graduate fresh from School. Usually a young man in his mid twenties.
He is still young and yet to buy his own house. He might own an affordable car or just a motorbike.
What has he got? HE HAS HOPE. HE IS FULL OF DETERMINATION TO SUCCEED & FULL OF IDEAS!! But he has yet to make any real monies. His Wealth is Yet in The Future!
This is represented by a very young company. Management is full of ideas, ventures & mergers. Full of energy & hope. Lots of enthusiasm during IPO. See how many write up to promote this newly listed company. Gullible people are chasing. But the stock is yet untested. Business yet to prove itself. All hype and hope for Wealth still in the future!
Calvin rarely invest in this type of company. Better avoid.
Why avoid?
See this
Most Start-up Businesses Fail in the First Five Years, Myth or Reality? Starting up a new business is proving to be a hard task for most of the entrepreneurs across the business world. The rate of failure within the first five years of business operations is still debatable and is said to be different from one economic zone to another. This is said to be depending on the various internal and external environmental forces operating in different industries. According to Griffith (2014), he postulates that over 60% to 70% of start-ups cannot survive beyond their first five years. Yes! More than 50% of all new businesses will fail within the 1st five years That is why Calvin generally avoid buying new unproven stocks. I need at least 3 years after listing to read its yearly Annual Reports before buying. Or else wait or give it a pass. In real life Established Companies will only look for qualified workers with proven experience & skill with real results or testimonies of good performance from his previous companies. They don't hire you by what you claim. They only hire proven results from skill & qualifications
2) Present Wealth.
Represented by Growing Companies with Proven Income. Usually healthy PRESENT Growth that is visible. This is like a mature man in his 30s to 40s. He has bought his house & car. But the bulk of his monies still invested in his growing business.
So his wealth is still being generated in the present.
This is popular growth stocks.
Calvin will buy some. On one condition. He looks for a fair price to enter. Best is during a market crash or overlooked by the market.
BUT CALVIN WON'T PAY A HIGH PRICE FOR THEM WHEN PRICES ARE INTO OVERVALUATION. IF YOU OVERPAY FOR ANYTHING. CHANCES ARE THEY WILL UNDERPERFORM THE MARKET FOR A LONG TIME TO COME LATER.
3) Past Wealth.
This is an old matured person in his 50s, 60s, 70s or even 80s
He once was a young graduate with Vision. He moved on to be a very successful businessman in his prime. So he has used his earnings to buy lots and lots of Assets like Lands, properties, warehouses, shophouses & other investments of Value. CASH OR EARNINGS CONVERTED TO REAL GOOD SOLID ASSETS - SO HIGH NTA REFLECTED IN BOOK VALUE.
As he is already old he slows down. He takes less risk. He looks for Capital Preservation First with a View to Growth. But usually things are more settled as he is no longer as hungry like he was as a fresh graduate once.
So I avoid buying stocks with "future growth" hype. Selectively buying Present Growth Stock if I SEE VALUE. And love buying into PAST WEALTH STOCKS OF IMMENSE VALUE SELLING AT DEEP DEEP DISCOUNT
I avoid the young man company with hope of future wealth. I will buy some (only selectively) the mature company of present wealth if they sell at reasonable prices. I concentrate on Deep Value Stocks of PAST ACCUMULATED WEALTH SELLING AT DEEP DISCOUNT
E.g. Accounting may require you to recognise an income this year, cos you EARNED it this year But under Income Tax rules, you will only be taxed when you receive payment (cash) for that
So you have a mismatch here
So let's say the income is 1m 24% tax is 240k
U pay no tax this year. Current tax = 0 But you need to recognise something called DEFERRED TAX = 240k So total tax expense this year is 0+240k=240k
Then next year u sold nothing, did absolutely nothing But you received that 1m cash
Current tax=240k (1m x 24%) Deferred tax (reversing the expense last year)=-240k Total tax expense this year=240k-240k=0
Complicated? That's why you need your accountants! 😁😂🤣
@Save to answer your question, JTiasa accounts this quarter have a deferred tax CREDIT. See the 2nd part of my example above. It's a REVERSAL credit/income
Taking out Income Tax Expense (Credit reversal) still very decent profit of more than 4 sen profit. annualised 16 sen and at 71 sen Jtiasa P/E only 4.43
Moreover, Its debts now pared down further from Rm200 millions only Rm93 millions
NAV (NTA) best
NTA up 12 sen from Rm1.31 to Rm1.43
A nice dividend (second interim) of 1.7 sen
Well done! Jtiasa!
Resounding Success!
Standing ovation!!
All round applause!!!
JAYA TIASA: THE MOST OUTSTANDING RESULTS OVERALL!!!
This book is the result of the author's many years of experience and observation throughout his 26 years in the stockbroking industry. It was written for general public to learn to invest based on facts and not on fantasies or hearsay....
sunnyguy
143 posts
Posted by sunnyguy > 2023-07-30 11:17 | Report Abuse
now not sure when it's timber operation can contribute back some profit... definitely it's palm oil operations is superb now. 😃😃