FIGURE 1: SARAWAK
PLANTATION BERHAD LAST 5 YEARS SHARE PRICE TREND
**analysis
based on 2018 annual report.
1.
GENERAL INTRO: SARAWAK PLANTATION is one of the
main oil palm plantations in Malaysia.
2.
NOTABLE POINTS:
a. In
2018 report, main business segments include operation of oil palm plantations
and palm oil mills
b. the
Group operates 20 oil palm estates in Sarawak, with a total planted area of
35,893 hectares and total annual fresh fruit bunches (FFB) production of
245,852 MT
c. the
group also operate 2 palm oil mills with a total processing capacity of 120 MT
FFB per hour.
d. in
terms of current development, Ta Ann Holdings Berhad undergone acquisition of a
significant stake in Sarawak Plantation to enable the Company to leverage on Ta
Ann's experience and expertise in plantation managements
e. in
terms of business operation, the Group implemented cattle integration project,
by letting cattle graze on vegetation that is otherwise considered weeds. This
in turn reduces the need for spraying of weedicide, saving costs and labour.
3.
IS THIS COUNTER A STRONG GROWTH STOCK?
a. REVENUE
RANGE (million): ~310.7 million in 2018 annual report, this is a medium revenue
company.
b. SHARE
PRICE: from 2015-2019, share price decreased from around RM2.25 to RM1.50, then
returned back to ~RM2.00 by end of 2019
c. EARNING
PER SHARE (EPS): earning per share in last 5 years fluctuated from 2.3 to 15.7sen
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 29.9
million, around 3% of total assets.
4.
IS THIS A STRONG DIVIDEND STOCK?
a. DIVIDEND
YIELD: in 2018 financial year, SARAWAK PLANTATION declared a dividend payout of
5 sen per share to shareholders. This amounts to dividend yield of 2.44%.
b. CONSISTENCY:
the dividend payout was not consistent, last five years (2014-2018) dividends
declared range between 0 to 9 sen per share.
c. DIVIDEND
PAYOUT RATIO: the dividend payout ratio for current financial year is 125%.
5.
IS THE MANAGEMENT PERFORMANCE GOOD?
a. RETURN
ON EQUITY (ROE): in 2018 financial year, SARAWAK PLANTATION achieved a low return
of shareholders’ equity, at 2.02%.
b. COST-TO-INCOME
RATIO: cost-to-income ratio is high, at 1878%.
6.
OTHER INDICATORS:
a. CASH
FLOW: cash flow is positive, around RM 101.9 million, equivalent to RM 0.36 per
share
b.
SUPPORT BY INSTITUTIONAL INVESTORS: this counter
is not well supported by institutional investors, there are only 16 institutional
investors at top 30 major shareholders list, including few insurance companies and
investment funds. Its major shareholder is TA ANN HOLDINGS BERHAD (30.39%) and STATE
FINANCIAL SECRETARY SARAWAK (25.47%).
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