Read through few years of report, my purpose of study is to takeover 10-20% of shares few years later when it is dirt cheap. Wait for me ya, haha!
Management has very limited knowledge in planting, its naive to survive in this complicating world. (Its like they think raising a human being need only food, they don't provide education, social, vegetables, vitamins, fresh air, entertainment, internet etc) In their mindset, they only need to put in fertilizer for them to get cooking oil.
As a result, lower and lower yield over the years, I think their oil palm yield starts dropping as soon as it reaches the prime years (7 year), instead of 15 years.
Their planting area has labour shortage problem, doesn't look like management want to mechanise.
Cost is so high because yield is so low.
Probably a sizable area got ganodermia already, as management talks about replanting.
In my opinion, please stay away from this counter, however is your choice to invest in this company or not. The reason is very simple, just look at the annual report 2017 page 15, this company was only able to obtain 7.94 MT per HA. This is literally one hell of joke for a public listed plantation company. However people who wish to "goreng" or whatsoever, all the best and good luck to you =D
The problem with this counter is that it has high borrowings ard 860 million.You will notice that most of KLSE 's counters that have high borrowings drop badly.With the amount of cash it has less than 1 million a/r of 13.5 million,just imagine how much you have to pay interest for about $578 million! It probably has to call right issue and some kind of restructuring ,just my opinion.
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....
Koh Wee Kiat
37 posts
Posted by Koh Wee Kiat > 2017-05-29 08:07 | Report Abuse
I do forsee if they didnt sell the asset they will raise money from share market... So call profit i don think