FIGURE 1: RIVERVIEW RUBBER
ESTATES BERHAD LAST 2 YEARS SHARE PRICE TREND
**analysis
based on 2018 annual report.
1.
GENERAL INTRO: RIVERVIEW is one of the main oil
palm plantations in Malaysia.
2.
NOTABLE POINTS:
a. In
2018 report, main business segments include oil palm plantations and investment
holdings. Not involve in fresh fruit bunches (FFB) milling to produce crude
palm oil (CPO).
b. the
Group owns four estates in Perak, Malaysia, with total planted area of 2544
hectares
c. decreased
production in current financial year was due to the palms going through a
recovery period after a record production in 2017. Labour shortage also
contributed to some crop losses.
d. the
investment properties are held in two locations in Perth, Australia, which
generate rental income.
3.
IS THIS COUNTER A STRONG GROWTH STOCK?
a. REVENUE
RANGE (million): ~28.66 million in 2018 annual report, this is a low revenue
company.
b. SHARE
PRICE: from 2018-2019, share price decreasing from around RM3.50 to RM3.00, probably
due to decreasing earnings.
c. EARNING
PER SHARE (EPS): earning per share in last 5 years fluctuated from 1.34 to 26.83sen
d. FUTURE
POTENTIAL/PROSPECTS: share price expect to be stable in the next few years
e. CAPITAL
EXPENDITURE (CAPEX): spending on purchase of new fixed assets is RM 2.52
million, around 0.8% of total assets.
4.
IS THIS A STRONG DIVIDEND STOCK?
a. DIVIDEND
YIELD: in 2018 financial year, RIVERVIEW declared a dividend payout of 6 sen
per share to shareholders. The dividend yield amounts to 2.03% only.
b. CONSISTENCY:
consistent dividend payout, last five years (2015-2019) dividends declared range
between 3 to 18 sen per share.
c. DIVIDEND
PAYOUT RATIO: RIVERVIEW paid out around 76% of its earnings to shareholders in
the form of dividends in the current financial year.
5.
IS THE MANAGEMENT PERFORMANCE GOOD?
a. RETURN
ON EQUITY (ROE): in 2018 financial year, RIVERVIEW achieved a low return of
shareholders’ equity, at 1.71%.
b. COST-TO-INCOME
RATIO: cost-to-income ratio is high at about 318%.
6.
OTHER INDICATORS:
a. CASH
FLOW: cash flow is positive, around RM 37.83 million, equivalent to RM 0.58 per
share
b.
SUPPORT BY INSTITUTIONAL INVESTORS: this counter
is not well supported by institutional investors, there are only 11 institutional
investors at top 30 major shareholders list, including few insurance companies and
investment funds. Its major shareholders is SUNGEI REAM HOLDINGS SDN BHD (63.01%).
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