FIGURE 1: KLUANG RUBBER CO
(MALAYA) BERHAD LAST 5 YEARS SHARE PRICE TREND
**analysis
based on 2019 annual report.
1.
GENERAL INTRO: KLUANG RUBBER is one of the main
oil palm plantations in Malaysia.
2.
NOTABLE POINTS:
a. In
2019 report, stated that the Group's revenue was made up of the sale of fresh
fruit bunches (“FFB”), dividend income, rental income and interest income. It
is not involved in milling processing of FFB to crude palm oil.
b. The
Group owns three estates with a total planted area of 6502 hectares
c. in
current financial year, the Group reported losses of -22.9 sen per share. In
addition to weather and labour challenges, certain fields were attacked by
bagworms, resulting in a negative impact on production.
d. Although
faced with challenges of unpredictable weather conditions and labour concerns,
the Group continues to remain positive on the long term fundamentals of the oil
palm industry.
e. The
Group also have significant share investments in few listed companies: Kuchai
Development Berhad, Sungei Bagan Rubber Company (Malaya) Berhad and Singapore
Press Holdings Limited
3.
IS THIS COUNTER A STRONG GROWTH STOCK?
a. REVENUE
RANGE (million): ~22.6 million in 2019 annual report, this is a low revenue
company.
b. SHARE
PRICE: from 2015-2019, share price range between RM3.00 to RM4.50
c. EARNING
PER SHARE (EPS): earning per share in last 5 years fluctuated from -22.9 to 10.87sen
d. FUTURE
POTENTIAL/PROSPECTS: share price may drop in the next few years if continue to
make losses
e. CAPITAL
EXPENDITURE (CAPEX): spending on purchase of new fixed assets is RM 8.1
million, around 0.6% of total assets.
4.
IS THIS A STRONG DIVIDEND STOCK?
a. DIVIDEND
YIELD: in 2019 financial year, KLUANG RUBBER declared a dividend payout of 6 sen
per share to shareholders despite making losses. The dividend yield amounts to 1.77%
only.
b. CONSISTENCY:
consistent dividend payout, last five years (2014-2018) dividends declared range
between 1 to 6 sen per share.
c. DIVIDEND
PAYOUT RATIO: N/A
5.
IS THE MANAGEMENT PERFORMANCE GOOD?
a. RETURN
ON EQUITY (ROE): in 2019 financial year, KLUANG RUBBER achieved a negative
return of shareholders’ equity, at -1.23%, due to making losses.
b. COST-TO-INCOME
RATIO: cost-to-income ratio is negative at about -2015%.
6.
OTHER INDICATORS:
a. CASH
FLOW: cash flow is positive, around RM 135.8 million, equivalent to RM 2.15 per
share
b.
SUPPORT BY INSTITUTIONAL INVESTORS: this counter
is not well supported by institutional investors, there are only 4 institutional
investors at top 30 major shareholders list, not including major institutions
such as EPF, PERMODALAN NASIONAL BERHAD, SKIM AMANAH SAHAM BUMIPUTERA, KUMPULAN
WANG PERSARAAN, insurance companies and investment funds. Its major shareholder
is THE NYALAS RUBBER ESTATES LIMITED (43.68%).
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