COMMENTS ON BOUSTEAD PLANTATIONS BERHAD (5254)

FIGURE 1: BOUSTEAD PLANTATIONS BERHAD LAST 5 YEARS SHARE PRICE TREND

**analysis based on 2017 annual report.

1.       GENERAL INTRO: This counter core business is oil palm plantation and processing.

2.       NOTABLE POINTS:

a.    total 41 estates and 10 palm oil mills. Located in peninsular Malaysia, Sabah and Sarawak, total 83,400 hectares (ha), 65,000 ha under cultivation, mature and immature areas are 59,100 ha and 5,900 ha, respectively

b.    the 2017 report show good earnings due to sale of (high development potential) plantation land 678 hectares, the received fund is applicable to purchase 11,600 hectares land at another location, considerably increase land available for oil palm plantation. The proposed purchase of land is in close proximity to existing estates, which increases overall economies of scale.

c.     employing efficiency enhancing technologies in oil palm plantation, including using high oil yield clones of oil palm, use of beneficial microbes for reducing fertilizer usage, utilise GPS and drone technologies in field mapping, palm census and monitoring.

3.       IS THIS COUNTER A STRONG GROWTH STOCK? 

a.       REVENUE RANGE (million): ~ 760 million in 2017 annual report, this is a medium revenue company.

b.      SHARE PRICE: share price in last few years constant at around RM1.50, in mid 2018, a sharp drop of share price to lowest point of around 70sen, it has since recovered slightly to 90sen.

c.       EARNING PER SHARE (EPS): earning per share in last 5 years are fluctuating, from 4.3 to 41.6 sen per share, the most recent two quarters in 2018, reported losses of 0.99 and 0.98 sen per share, respectively.

d.      FUTURE POTENTIAL/PROSPECTS: future challenges faced include the increased supply of alternative vegetable oils and reduced demand for biodiesel, and competition from Indonesia. Other influence e.g. Indian government increasing import tax on vegetable oils, EU phasing out palm oil from EU biofuel

e.      CAPITAL EXPENDITURE (CAPEX): spending on purchase of new fixed assets is 34 million, around 1.2% of total assets.

4.       IS THIS A STRONG DIVIDEND STOCK?     

a.       DIVIDEND YIELD: in 2017 report, dividend of 19.5sen per share payout declared, amount to dividend yield of 21.9% based on current share price.

b.      CONSISTENCY: in last five years have consistent dividend payout to shareholders, from 2013-2017 dividend payout range from 6 to 72 sen per share, average 25sen per share.

5.       OTHER INDICATORS:

a.       CASH FLOW: cash flow is positive, around 15.8 million

b.      SUPPORT BY INSTITUTIONAL INVESTORS: there is presence of 11 institutional investors at top 30 major shareholders list, including Lembaga Tabung Angkatan Tentera, EPF and few investment funds and insurance funds.

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