Based on the monthly production figures, the 4Q of FY2018 is the best quarter so far in terms of FFB harvesting and production of CPO/PK. So I would anticipate a significant improvement in their FY2018 results together with a projected final dividend 9 sen/share (announced ca 29 March), and hope the further announcement of share split and bonus warrant will bring some cheers to our loyal investors.
Target price around 2.60 to 2.70.. it already went up.. but worth holding.. For me.. next target will be hsplant.. TP for hsplant 3.20...=)
http://youtu.be/VBZloK52RVU
took a peek into IOI management's comments, they are expecting cpo price to be able to sustain at current levels and may further increase in the 2nd qr as inventory is expected to go down..
I predict China will buy a lot more of CPO from us, ie Malaysia... under government of Tun... And this is definitely a good thing for kmloong, price will shoot up in 2019
4Q19 result of only RM3mil profit to shareholder was below most investors expectation. This brings the full year 2019 profit to only RM52mil. At the current share price, the company is being valued at a high PE of 22x.
I don't think that the palm oil industry will reverse their down cycle trend anytime soon given the general demand of the commodity is expected to go down in the future. China for example, is negotiating with US to take in more agriculture products from US which would potentially include soybean (or soybean oil). In general, Chinese consumption of oil would not actually grow that much. Any increase of soybean oil import from the US would actually means lower import for other types of oil from other countries (in particular palm oil from Indonesia and Malaysia).
Another issue is on the European demand of palm oil which is expected to go down exponentially given the proposed ban of palm oil use in food and biofuels industries in the future. They have already agreed to phase out the use of palm oil in transport fuel by 2030. Some countries like France, Finland and Norway have already started to move away from palm oil. Europe is the 2nd export market for Malaysia palm oil. Half of the import of palm oil into Europe are for Biodiesel use while the other half is for food related use.
With this in mind you need to have a slightly long-term investment horizon when buying into oil plantation companies like Kim Loong as the return to upcycle might not be in the near future.
If you are looking to hedge your portfolio outside of Kim Loong (due to its weak earnings outlook and relatively high valuation), I would recommend you to look at MBMR. (https://klse.i3investor.com/servlets/stk/pt/5983.jsp)
MBMR is a direct proxy to Perodua via its 22.6% interest in the company. Valuation is cheap at only 6.4x PE based on FY18 profit of RM166mil. PB is low at only 0.7x BV.
FY19 should deliver another profit growth year to the company. Profit growth will again be driven by the performance of Perodua (via MBMR 22.6% holdings in Perodua) from the still strong sales of new Myvi, sales of SUV Aruz and the introduction of the newly revamp Alza sometime in the 2H19. Aruz which commands a higher margin compared to other models, will help improve the total profit margin of Perodua (which will flow to MBMR’s bottom line as well).
MBMR is expected to achieve a profit of RM200mil in 2019. At the current share price, the company is being valued at only 5.3x which is a lot lower than the industry average of 15x PE. As an example, UMW (another company with exposure to Perodua) is currently trading at a PE multiple of almost 20x.
june's production numbers came in below May's across all FFB, CPO and PKs, apart from the low production season, is it due to the fire incident earlier?
KIM LOONG RESOURCES's main business segments include oil palm plantations and milling.
Its earning performance has been overall unstable in last five years, whereby its earning per share overall fluctuated from 6 sen to 10sen. In 2019 financial year, the company declared a dividend of 6 sen per share, which amounts to a dividend yield of 3.75%. In 2019 financial year, KIM LOONG RESOURCES reported lower revenue than previous year due to lower average prices of crude palm oil (CPO) and lower fresh fruit bunches (FFB) production.
Based on comparison of 44 plantation counters listed in Bursa Malaysia, it is found that currently KIM LOONG is not ranked as one of the TOP 8 plantation counters worthy to pay attention to and potentially invest in. However, KIM LOONG stands out in performance indicators such as having mostly steady earning per share (~ 5 sen per share and above).
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....
kpolee22
30 posts
Posted by kpolee22 > 2017-12-28 23:47 | Report Abuse
PUC (0007)HTF BREAKOUT, BUY NOW BEFORE FLY... CHECK THE CHART URSELF!!