Another stock benefited from better CPO and their Gulf Lube biodiesel plant shall be ready by end 19. Palm oil segment shall start contributing in coming 1-2 quarters and compensate the weak segment in SPV.
CBIP has 3 core business 1.Oil mill one stop centre and a market leader in this field. 2.Retrofitting SPV 3.Palm oil plantation With NTA at 1.45 and a generous yearly dividend of 3.7%. 1.When CPO rises, more landbank will be planted, more mills would be needed. 2.For SPV , contracts are expected to be given after quiet years in 2017,2018. The star of the company is its palm oil plantation, which trees are 5-7 years old and are already yielding fruits. Its losses in this segment has been reducing over the years : FY2018 a loss of RM8.7mil, with latest Q narrowed to a loss of RM1.5mil. The CEO expects its plantation segment to break even at FY20 and profitable in FY21, when it was reported in June2019 when CPO hovering around rm1800. https://www.thestar.com.my/business/business-news/2019/06/03/cbip-counts-onplantation-ops With CPO price above RM3000 currently , its plantation segment is super undervalued. Its current share price is being assumed its plantation segment is still loss making/breakeven, which isn’t the case with this CPO rally. CBIP is a hidden gem, mainly because everybody overlooked its plantation segment. Majority of small-medium palm oil players had rallied >100% . CBIP share price hovers around RM2-2.5 when CPO prices are around RM2000-2500 in 2015-2018. A 100% increase would just bring it to where it was 4 years back , when its palm trees wasn’t even yielding fruits yet ! Remember,CBIP has a good management team which was recognised internationally .CBIP was awarded Forbes Best under a billion award for 2006,2007,2008 and 2013. Share volume is below 1mil, almost the same throughout 2019, indicating no big players is manipulating the price. Furthermore, management is supporting this price through share buy backs . You have 3 months to accumulate before the next quarter report, which will show tremendous improvement. By then the cat is already out of the bag.
“You can have my word that our production will catch up. In fact, it already has,” executive chairman Tan Sri Alex Chen (pictured) told The Edge Financial Daily. “Trees at our two main parcels are aged between six and 10 years, so about 90% of our trees are now bearing fruits.” 12nd Mar 2018
The stock price reflects the net profit at the end. When the net profit comes up, the P / E ratio becomes lower.
Zhai Lin has a boss who has integrity and has created wealth for shareholders for many years. The current share price of 118 is also a good opportunity for capital appreciation. To grasp the slump in the share price, the company has built 80 palm oil refineries worldwide. Modipalm patent, has strength.
Many investment banks must go home to buy 7076. In addition to not knowing the goods, they lack vision.
MKH is targeting an FFB output of 420,000 tonnes in FY18, along with an oil extraction rate of 22%, kernel extraction rate of 4% and CPO production of 94,000 tonnes. Its CPO selling price budget has been fixed at RM2,300 for the year.
Palm oil segment still on negative as of last quarter. It widen actually compared to 2018 (y2y). Just be caution where next QR can be just moderate. Revenue is still in falling stage. No need to rush but collect it slowly.
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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....