9M20 unit cost was at MYR1,600/tonne (from MYR1,700/tonne in FY19). This marked improvement stemmed from SOP’s ongoing cost cutting initiatives (via staff cuts and mechanization). In addition, SOP has applied 85% to 90% of its fertilizer requirements during 9M20 and, as such, we expect unit costs to come down in the remaining 4Q20.
Higher downstream profit. Given its downstream lead time of c.2 months, SOP is likely to have captured feedstock at lower prices and this trading profit further boosted the performance of its downstream operations. Moving forward, we expect SOP to benefit from the pick-up in demand from key markets as business operations resume post-lockdowns. Its biodiesel capacity expansion to 200,000 tonne pa is expected to be completed in FY21.
The plantation companies fared well in 3Q20 too, thanks to the rebound on crude palm oil prices. Genting Plantations Bhd’s quarterly profit leaped 241.8% y-o-y, Sarawak Oil Palms Bhd (138.8%), IOI Corp Bhd (86.5%) and United Plantations Bhd (58.3%). Meanwhile, both Sime Darby Plantation Bhd and FGV Holdings Bhd have turned profitable.
Positive factors are all here but...but the price never moves stuck at 4.00+. SOP needs a booster to kick start an upgrade { higher dividend will fits in nicely } Board should heed the advice { special dividend pay outs}
Malaysia may keep duty free palm exports for January-March next year.if it is true,palm oil price may rally to rm4000/my in January all palm oil counter should also rally to all time high 2nd half december 2020 should start moving up if free export duty.
just imagine.last year november 2019 rally to january to above 2.5 when palm price rm3100 only..now already rm3400 to rm3500.and if export duty free extension to march 2021,price of palm touch rm4000 in january 2021 with strong economy recovery play,sop prices should exceed rm7
very clear juncture, there is a terrible 'squeeze' in palm oil market, demand much higher then supply, at least for next six months, any thing could happen in the future
SOP underperformed { compared to its smaller counterparts } SOP bigger in size, output and earnings yet substantially lower compared to smaller United Malacca { 5.20 } or Chin teck { 6.90 }
plantation stocks usually good run in beginning of the year. q4 bull run just more on speculating...if FCPO bull effect sustainable and the effect spill over next year...the bull will start 2019 price drop after hit 4.2 bcos the above didnt happen. this round...cpo bull due to structural changed (back by fundamental). u guys can check the stock price of sop or any other plantation companies since 2010 and read together with fcpo.
New IPO: Building management systems (BMS), solar thermal systems and energy-saving services provider, Solar District Cooling Bhd aims to list on the Ace Market!
MQ Trader 352 views | 2 d ago
0:17
New IPO: The onshore and offshore support services provider for the O&G industry, Steel Hawk Bhd aims to list on the Ace Market!
MQ Trader 11670 views | 10 d ago
0:17
New IPO: The largest mini-market player and a leading groceries retailer in Malaysia, 99 Speed Mart Retail Holdings Bhd aims to list on the Main Market!
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....
Plantermen
2,203 posts
Posted by Plantermen > 2020-11-30 08:08 | Report Abuse
SOP slow moving but underrated counter compared to its peer. Look at chinteck, United Malacca, smaller acreage but price much higher