Posted by bigFAT > 2014-02-12 22:49 | Report Abuse

Plantation giants like IOI and Sime Darby are more resilient to overcome any difficult changes in Indonesian policies that can affect their investment. But Kfima...i don't think so.

I suggest to Kcchongnz ...i admire him very much with his data...yet i never see him writes about risks for kfima's business. why not write something valuable this time about risk management and downside probability with data like what he explained wonderfully, such as graham net-net or 5 criterias to invest in a stock.

Sometimes we must be optimistic ...not continuously ....sometime must be pessimistic. That's what u call fair and free from any interest.

Posted by bigFAT > 2014-02-12 22:53 | Report Abuse

as kcchong told us that it would be incredible for a company to record increase in profits/earnings/roe/roic...or whatever continuously...

so he should also be affirmative that kfima might also registers loss...but it doesn't mean that its a bad company...and that what we call investment. u lose some u win some.

Posted by pradeep > 2014-02-12 23:00 | Report Abuse

Do your homework and be patient on KFIMA,fundamental intact

Posted by chongkonghui > 2014-02-12 23:20 | Report Abuse

ESOS is 10% of total share capital. After so long.... it is only 3.69% and another 6.3% to go.

Posted by chongkonghui > 2014-02-12 23:24 | Report Abuse

Encik Mohd Khairi bin Mahamor, a Principal Officer of the Company had exercised shares of KFIMA pursuant to the Options granted under the Employees' Share Scheme (ESOS), 168,000 shares @ RM1.48 and he can pocket immediately ~ RM85,000 (RM1.97-RM1.98 vs RM1.48 * 168,000 shares).

Good for him.

Posted by bigFAT > 2014-02-12 23:45 | Report Abuse

good Lord !!!!

Posted by bigFAT > 2014-02-12 23:46 | Report Abuse

with that money ..he can exercise more unsubscribed ESOS

Posted by kcchongnz > 2014-02-12 23:56 | Report Abuse

Posted by bigFAT > Feb 12, 2014 10:49 PM | Report Abuse

I suggest to Kcchongnz ...i admire him very much with his data...yet i never see him writes about risks for kfima's business. why not write something valuable this time about risk management and downside probability with data like what he explained wonderfully, such as graham net-net or 5 criterias to invest in a stock.

Sometimes we must be optimistic ...not continuously ....sometime must be pessimistic. That's what u call fair and free from any interest.


Yes, risk management is very important in investing. But do you think there is much risks in this company, Kfima?

1) Do you see much risk in a company which continuously making profit for the past 40 quarters risky?
2) Do you consider a company which continuously having free cash flows (note not only cash flows from operations) for the last 10 years risky?
3) Do you consider a company with huge net cash and little borrowings risky?
4) Do you wish that i fabricate some risks for Kfima just to satisfy you?

Or are you thinking about alpha, beta, sigma and gamma? If so you can refer to the link below and have fun on them:

http://klse.i3investor.com/blogs/kcchongnz/44336.jsp
http://klse.i3investor.com/blogs/kcchongnz/44334.jsp

Posted by bigFAT > 2014-02-12 23:59 | Report Abuse

thank u kc..i'll check

Posted by wattapi > 2014-02-13 00:02 | Report Abuse

bisnes sure have risk..the person no understand said no or less risk

Posted by bigFAT > 2014-02-13 00:02 | Report Abuse

what the heck

beta?
sigma?

what science is this?
don't have a single clue

this is not what i asked

what about risk in indonesian operation?

Posted by wattapi > 2014-02-13 00:07 | Report Abuse

dun understand how to answer...talk number only

Posted by kcchongnz > 2014-02-13 09:09 | Report Abuse

Posted by wattapi > Feb 13, 2014 12:07 AM | Report Abuse

dun understand how to answer...talk number only


Don't understand what am I talking about? Am I obliged to educate you? Tell you what, I don't think you have the mentality to grasp simple investing concept.

Posted by kcchongnz > 2014-02-13 09:11 | Report Abuse

Posted by bigFAT > Feb 13, 2014 12:02 AM | Report Abuse

what the heck

beta?
sigma?

what science is this?
don't have a single clue

this is not what i asked

what about risk in indonesian operation?


Obviously you don't have a clue what risk is and what I try to explain to you.

Posted by gark > 2014-02-13 11:22 | Report Abuse

hello fat brain... i am working in plantation sector in Indonesia... ALL CPO is transacted in USD and not in rupiah. However all labor, local costs and local transport is based on Rupiah. The depreciation of Rp is very beneficial to Indon based plantations.

Only higher royalty for mining company, no new taxes for CPO. In fact indon government is heavily promoting palm oil with it's new min 20% biodiesel initiative by 2020. At a economy projected to grow 6.5% a year, how can foreigners shun Indonesia.

Yous can see indon plantations such as BWPT, AAL has gained >30% within the last month or so...

Also the fat rain of yours cannot understand.. Kfima already earn 11 cents in 6 months, how can they earn LESS in 12 months, unless you are saying sudden loss, which is impossible as CPO is priced in USD in indonesia.

Posted by wattapi > 2014-02-13 18:01 | Report Abuse

zzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzz

Posted by musang_foxking > 2014-02-16 11:46 | Report Abuse

http://www.bloomberg.com/news/2014-02-12/palm-imports-by-india-seen-dropping-first-time-since-october-1-.html

Palm Oil Imports by India Plunging First Time Since October

By Swansy Afonso Feb 12, 2014 7:18 PM GMT+0800

Palm oil imports by India, the world’s biggest importer, probably declined for the first time in three months as farmers prepared to collect the largest winter oilseed crop in three years, a Bloomberg survey showed.

Shipments of the main crude and refined oils tumbled 26 percent to 650,000 metric tons in January from a year earlier, according to the median of estimates from five processors and brokers compiled by Bloomberg. Total vegetable oil imports, including those for industrial use, fell 17 percent to 960,000 tons, the survey showed. The Solvent Extractors’ Association of India will release the data this week.

Reduced demand may curb a rally in palm oil futures and boost inventories in Indonesia and Malaysia, the world’s largest producers. India increased a tax on refined cooking oils last month to protect oilseed growers and refiners from a surge in imports of processed palm oil. Winter-oilseed output may reach 10.5 million tons, according to the association.

“India had imported excess palm oil before the import duty was raised and now purchases are moderating,” said Ashok Sethia, executive director at Sethia Oils Ltd., and a former president of the association. “Imports may slow further as supplies increase because farmers may be prompted to sell old inventories ahead of a good rapeseed harvest.”

Imports surged to 1.07 million tons in December, the highest since January 2013, before the tax on refined cooking oils was increased to 10 percent from 7.5 percent.

Winter Impact

Palm oil for April delivery climbed 1 percent to 2,635 ringgit ($794) a ton on the Bursa Malaysia Derivatives, the highest price at close since Jan. 3. Futures advanced 9.1 percent last year. World exports of palm oil may decline for the first time in 16 years, dropping 2.3 percent to 43.2 million tons in 2013-2014, Oil World, a Hamburg-based researcher, estimates.

“Imports also decreased because of less domestic demand during the winter season,” said Govindlal G. Patel, managing partner at G.G. Patel & Nikhil Research Co. Crude palm oil imports may total as much as 500,000 tons this month, he said.

Cooking oil stockpiles at ports and due to arrive to India probably fell 7.5 percent to about 1.47 million tons at the start of February from 1.59 million tons a month earlier, said Sandeep Bajoria, chief executive officer of Sunvin Group.

Crude soybean oil imports probably gained 55 percent to 160,000 tons in January, while sunflower oil purchases were little changed at 130,000 tons, the survey showed.

India meets more than 50 percent of its cooking oil demand through imports. Purchases may climb 4.2 percent to a record 11.1 million tons this season, including 8.3 million tons of palm, Godrej International Ltd.’s Dorab Mistry said on Nov. 29.

To contact the reporter on this story: Swansy Afonso in Mumbai at safonso2@bloomberg.net

To contact the editor responsible for this story: James Poole at jpoole4@bloomberg.net

Posted by musang_foxking > 2014-02-16 11:49 | Report Abuse

http://www.bloomberg.com/news/2013-09-12/mistry-sees-palm-weakening-as-prices-set-for-worst-run-since-96.html

Mistry Sees Palm Weakening as Prices Set for Worst Run Since ’96

Palm oil may extend a decline as supply of the most used cooking oil from Indonesia and Malaysia climbs and biodiesel demand peaks, said Dorab Mistry, director at Godrej International Ltd., signaling a third year of losses.

A rally in futures since the end of July is over and prices will drop from now, Mistry said in remarks prepared for a conference in Singapore today, without giving a forecast. Prices rebounded 9.5 percent from a three-year low of 2,137 ringgit ($656) a metric ton in July as the spread between palm and gas oil created demand for biodiesel, he said. Mistry predicted in May a drop to 2,000 ringgit from July, citing a buildup in stockpiles during the peak-production cycle.

Futures have lost 4 percent this year, extending the combined 36 percent slump in 2011 and 2012, and a third year of losses would be the worst run since at least 1996, according to data compiled by Bloomberg. Prices of the oil used in everything from candy to detergents posted the biggest monthly gain since December 2010 in August as crude oil rallied to a two-year high and a weaker ringgit boosted exports.

“I believe the rally in CPO prices has just about run its course and will face downward pressure from here,” said Mistry, who has traded vegetable oils for more than three decades. “It would not surprise me to see new lows in vegetable oil and particularly in palm and lauric oil in early January.”

Palm for delivery in November ended the morning session at 2,340 ringgit on Bursa Malaysia Derivatives in Kuala Lumpur today. The Standard & Poor’s GSCI gauge of 24 commodities jumped to a six-month high on Aug. 28, led by a rally in crude oil, soybeans, cocoa and cotton.

Peaked Markets

“Markets look like they have peaked and that the path of least resistance will be sideways to lower,” Mistry said. “This applies to grains, oilseeds, meal as well as vegetable oils. I am flagging some uncertainties with regard to demand for edible vegetable oils in countries like India which have suffered from currency degradation.”

The weakness in currencies of emerging-market economies will act as an import tax and will be disruptive for commodities demand, Mistry said. Barring any weather disruptions, palm oil is set to trade lower on a bleaker economic outlook as the U.S. Federal Reserve may taper stimulus, he said.

Global palm stockpiles will surge 21 percent to a record 9.7 million tons by the end of 2013-2014, while demand expands 4.6 percent, the least in 12 years, the U.S. Department of Agriculture estimates.

Production in Indonesia and Malaysia is expanding as the high output season begins and trees are in a more productive biological cycle, Mistry said. The new cycle is just starting and may last at least until April, he said.

Energy Correlation
The outlook for vegetable oil prices is linked to prospects for the energy market as uncertainty in Syria may lead to a spike in crude, Mistry said. Concerns over disruptions in Middle East oil exports amid conflict in Syria has pushed Brent crude oil to four weeks of gains. Use of palm oil for fuel is expected to advance 11 percent to 6.34 million tons in 2013, according to Hamburg-based research company Oil World.

“We must consider energy demand and how competitive palm and other oils are likely to be,” Mistry said. “Palm will have to expand its discount to soya oil in order to remain competitive. Winter may cloud some of this competitiveness.”

The tropical oil clouds in cooler temperatures, which leads to consumers looking for alternatives in the winter. Soybean oil, a substitute in food and fuel uses, was at a premium of about $233.68 a ton over palm oil today, compared with an average of $301.33 in the past year.

“The only factor that can make me bullish will be adverse weather,” said Mistry. “The odds are evenly poised for a weather disturbance sometime in 2014. Without such a development, I am afraid we are looking at lower prices.”

To contact the reporter on this story: Ranjeetha Pakiam in Kuala Lumpur at rpakiam@bloomberg.net

To contact the editor responsible for this story: James Poole at jpoole4@bloomberg.net
---
so all they small rallies before are just stocking at lower price...so the oil palm will tumble again!!!

Posted by gark > 2014-02-17 11:17 | Report Abuse

hello musang.. why give stale news? already more than 1/2 year old de...

Posted by gark > 2014-02-17 11:18 | Report Abuse

why not talk about indonesia biodiesel palm oil initiative that makes all the analyst bullish on palm oil again?

Posted by yfchong > 2014-02-18 21:25 | Report Abuse

I have forgo my under perform unit trust n make accumulation.. So with all the good comments let predict for good dividend say 9 cts......

Posted by VIWizard > 2014-02-19 09:15 | Report Abuse

pe less than 10, net cash,dividend yield more than FD

Posted by yfchong > 2014-02-19 13:22 | Report Abuse

Still solid,eh..... this counter wont drop much if occurs correction just another hovering at this pivoting point. Just emotional play only lah.... sedap gerak hati je........if good at 1.90 just support my roti canai & nescafe tarik le....

Posted by bigFAT > 2014-02-19 16:58 | Report Abuse

again now 180,000 units of ESOS at RM 1.48 to be sold at RM 1.97

bravo!!!

http://www.bursamalaysia.com/market/listed-companies/company-announcements/1541997

Posted by gark > 2014-02-20 18:31 | Report Abuse

Fimacor report excellent profit today... kfima is hopefully to do the same as it owns 60+% of fimacor

Posted by yfchong > 2014-02-21 08:18 | Report Abuse

Yeah, Good Q fr FimaCorp..

Posted by yfchong > 2014-02-21 09:30 | Report Abuse

Just a small word bingo...

Posted by 逍遥子 > 2014-02-21 10:33 | Report Abuse

FimaCorp results give KFima eat Viara.......up up up !!

Posted by susuan > 2014-02-21 11:29 | Report Abuse

When do you expect K Fima results??

Posted by Overweight > 2014-02-21 11:36 | Report Abuse

hopefully this evening, expected good result too.

Posted by 逍遥子 > 2014-02-21 12:19 | Report Abuse

Hopefully the PAT will be at $22 mils +/- , with the EPS around 8 cents.

Posted by Overweight > 2014-02-21 12:26 | Report Abuse

my projection of dividend payout this year will further improved to 10 sen and might surprise with special dividends, also with huge cash in hand should come out some bonus or expansion plan.

Posted by yfchong > 2014-02-21 12:59 | Report Abuse

Mr Market has reacted..... need to say thanks to kcchongnz on this views and analysis, and those bloggers who have written and drops few lines of kind analysis...

Posted by KowChye > 2014-02-21 13:36 | Report Abuse

Already gone up by 0.16 before lunch.

Posted by pradeep > 2014-02-21 14:01 | Report Abuse

Will fly high

Posted by tonylim > 2014-02-21 14:28 | Report Abuse

Good

Posted by zhenguyee > 2014-02-21 14:33 | Report Abuse

anyone have a target price??

Posted by yfchong > 2014-02-21 15:49 | Report Abuse

Possibility can refer to kcchongnz, chengyk, green dragon and chyithong as referece only., on their assumption.,

Posted by bigFAT > 2014-02-21 15:51 | Report Abuse

must take profit 1st...this has happened before...your share your choice

Posted by aunloke > 2014-02-21 16:05 | Report Abuse

LOL ! we all know what to do.

Posted by zhenguyee > 2014-02-21 16:09 | Report Abuse

thx yfchong and bigFat.. its true

Posted by tonylim > 2014-02-21 16:19 | Report Abuse

Hahhaa my sifu aunloke is here

Posted by aunloke > 2014-02-21 16:22 | Report Abuse

Please Tony ,is the other way round , I view you as my sifu.

Posted by pradeep > 2014-02-22 20:43 | Report Abuse

I think it is profit taking time overall the market will take a rest.

Posted by digiuser016 > 2014-02-23 00:32 | Report Abuse

Hi Kcchong,

For example you intend to invest in a high growth plantation stock which has planted a lot of trees. You know the age profile of the trees, and you can estimate the production quite closely. From there you have to estimate your normalized gross profit, and then deduct operating expenses to arrive at your normalized operating profit for a number of years. From there you have to deduct what is due to the debt holders, the minority interest etc, to arrive at what is due to the common shareholders.

I read the little book of valuation written by Aswath Damodaran and can link his approach to yours. For me investing in a growth stock or a pioneer stock is more challenging than a mature stock because I need to make more assumptions about operating margin, growth rate, roc, and hence reinvestment rate.

Recently I read a book called Security analysis and business valuation on Wall Street written by Hooke, Jeffrey and realize the investment bankers have taken many variables into account when calculating the stock value. E.g. Top down approach, economic>capital market> industry> specific company. Lets says the biodiecel policy increase demands of crude palm oil and every 10 percent increase of price of palm oil will translate to +5% eps, Then they also look at supply curve and make different assumptions on scenario(optimistic, neutral,pessimitic) and etc......Like playing chess, they take into account every possibility.

Anyway I prefer your framework. Simple yet effective.

Posted by kcchongnz > 2014-02-23 08:45 | Report Abuse

Aswath Damodaran's book is excellent to learn about valuation. Don't know about the other one mentioned by you.

It is the analyst rice bowl in security analysis. The way they do in US is very detail. They have specialist analysts for each and sub-set of each industry. Not sure if the local analysts are as professional. This is definitely beyond what a retail investor like you and me can and able to do.

There is this law of diminishing returns. I kind of prefer to be approximately right than precise correct in anything finance because you can’t make an art into an exact science. The following are some of the sayings of some great proven investors, I mean real super-investors.

Peter Lynch
1. “Nobody can predict interest rates, the future direction of the economy, or the stock market. Dismiss all such forecasts and concentrate on what’s actually happening to the companies in which you’ve invested.”
2. . “The way you lose money in the stock market is to start off with an economic picture. I also spend fifteen minutes a year on where the stock market is going.” and “If you spend more than 13 minutes analyzing economic and market forecasts, you’ve wasted 10 minutes.”
3. “The GNP six months out is just malarkey. How is the sneaker industry doing? That’s real economics.”

Howard Marks
1. “We don’t know what lies ahead in terms of the macro future. Few people if any know more than the consensus about what’s going to happen to the economy, interest rates and market aggregates. Thus, the investor’s time is better spent trying to gain a knowledge advantage regarding ‘the knowable’: industries, companies and securities. The more micro your focus, the great the likelihood you can learn things others don’t.”
2. “We can make excellent investment decisions on the basis of present observations, with no need to make guesses about the future.”
3. “You can’t predict. You can prepare.”
4. “In both economic forecasting and investment management, it’s worth noting that there’s usually someone who gets it exactly right… but it’s rarely the same person twice. The most successful investors get things ‘about right’ most of the time, and that’s much better than the rest.”

Want to hear more about Howard marks view on macro? Read here:

http://klse.i3investor.com/blogs/kianweiaritcles/43793.jsp

Posted by digiuser016 > 2014-02-23 10:57 | Report Abuse

Yeah. I know what you mean. Basically the investors you mention adopt the approach of bottom up instead of top down. Currently I also follow their path. Anyway no harm to know other strategies when it comes to investing in the stock market.

It just comes to my surprise when the book mentions that some investment bankers put more emphasis on relative valuation instead of dcf.......

Posted by yfchong > 2014-02-24 13:36 | Report Abuse

Nothing can be done just hold tight to KFima

Posted by KAHFIEHLAI > 2014-02-24 21:38 | Report Abuse

hopeful something big on going to fly company portfolio to higher level...

Posted by aunloke > 2014-02-24 21:53 | Report Abuse

If Fimacorp moves up another 10% then we can expect some good news from Kfima.