FIGURE 1: SIME DARBY
PLANTATION BERHAD LAST 2 YEARS SHARE PRICE TREND
**analysis
based on 2018 annual report.
1.
GENERAL INTRO: SIME DARBY is one of the main oil
palm plantations in Malaysia.
2.
NOTABLE POINTS:
a. In
2018 report, SIME DARBY claims to be the world’s largest producer of Certifed
Sustainable Palm Oil (CSPO) with a production capacity of 2.46 million MT.
b. stated
total planted area of approximately 633,000 hectares (250 estates), including
oil palm, rubber, sugarcane and grazing pasture. It is also operating 73 mills,
5 R&D centres, 11 refineries and 3 innovation centres.
c. Operations
across 15 countries and supported by a workforce of more than 95,000 employees,
comprising production as well as the sales and marketing of oils and fats
products, oleochemicals, biodiesel, and other palm oil derivatives
3.
IS THIS COUNTER A STRONG GROWTH STOCK?
a. REVENUE
RANGE (million): ~6542 million in 2018 annual report, this is a high revenue
company.
b. SHARE
PRICE: from 2018-2019, share price remain steady at around RM5.00
c. EARNING
PER SHARE (EPS): earning per share in last 5 years fluctuated from 5.1 to 52.2sen
d. FUTURE
POTENTIAL/PROSPECTS: share price expect to be steady
e. CAPITAL
EXPENDITURE (CAPEX): spending on purchase of new fixed assets is RM 791.2
million, around 2% of total assets.
4.
IS THIS A STRONG DIVIDEND STOCK?
a. DIVIDEND
YIELD: in 2018 financial year, SIME DARBY declared a dividend payout of 1.7 sen
per share to shareholders. The dividend yield amounts to 0.32% only.
b. CONSISTENCY:
consistent dividend payout, last five years (2015-2019) dividends declared range
between 1.7 to 150 sen per share.
c. DIVIDEND
PAYOUT RATIO: in 2018 financial year, SIME DARBY paid out 33% of its earnings
to investors in the form of dividend.
5.
IS THE MANAGEMENT PERFORMANCE GOOD?
a. RETURN
ON EQUITY (ROE): in 2018 financial year, SIME DARBY achieved a low return of
shareholders’ equity, at 3.7%. The ROE in last five years ranged from 3.7 to 28.2%.
b. COST-TO-INCOME
RATIO: cost-to-income ratio is high at about 1331%.
6.
OTHER INDICATORS:
a. CASH
FLOW: cash flow is positive, around RM 490.9 million, equivalent to RM 0.07 per
share
b.
SUPPORT BY INSTITUTIONAL INVESTORS: this counter
is very well supported by institutional investors, there are 30 institutional
investors at top 30 major shareholders list, including EPF (12.69%), PERMODALAN
NASIONAL BERHAD (4.32%), SKIM AMANAH SAHAM BUMIPUTERA (43.66%), KUMPULAN WANG
PRSARAAN (4.56%), SOCSO (0.21%) insurance companies and investment funds.
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