FIGURE 1: TA ANN HOLDINGS BERHAD
LAST 2 YEARS SHARE PRICE TREND
**analysis
based on 2018 annual report.
1.
GENERAL INTRO: TA ANN HOLDINGS is one of the
main oil palm plantations in Malaysia.
2.
NOTABLE POINTS:
a. In
2018 report, reported main business segments include timber related and oil
palm plantations.
b. for
its logging segment, the Group has implemented an environmentally friendly
terrace/zebra tree planting and logging methodologies where the natural
vegetation between terraces are left undisturbed to minimise ground
disturbance. Its Timber Division is going through a challenging period, mainly
due to rising production cost, emergence of substitute products and stiff
competition from timber producing countries like Indonesia and Vietnam. The
Group will also continue to review its product mix with the usage of plantation
logs to produce other value added products. Currently its main export country
is India (87%), Taiwan (11%) and Japan (2%).
c. for
its plantation segment, the Group has 13 oil palm estates across Sarawak with
total planted area of over 47,000 hectares and operates two (2) crude palm oil
(‘CPO’) mills with a combined annual processing capacity of 1.3 million tonnes
of fresh fruit bunches. Lower pre-tax
profit in current financial year was due to lower seling prices of FFB
and CPO
d. for
its plywood division, the Group implemented a semi-automated processing system
to reduce workers dependency while maintaining productivity level. Plywoods are
mainly exporting to Japan.
3.
IS THIS COUNTER A STRONG GROWTH STOCK?
a. REVENUE
RANGE (million): ~967.2 million in 2018 annual report, this is a medium revenue
company.
b. SHARE
PRICE: from 2018-2019, share price decreasing from around RM3.50 to RM2.00,
then raised back to RM3 by end of 2019.
c. EARNING
PER SHARE (EPS): earning per share in last 5 years fluctuated from 17.05 to 54.55sen
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 94.2
million, around 3% of total assets.
4.
IS THIS A STRONG DIVIDEND STOCK?
a. DIVIDEND
YIELD: in 2018 financial year, TA ANN HOLDINGS declared a dividend payout of 10
sen per share to shareholders. The dividend yield amounts to 2.87% only.
b. CONSISTENCY:
consistent dividend payout, last five years (2015-2019) dividends declared range
between 10 to 20 sen per share.
c. DIVIDEND
PAYOUT RATIO: TA ANN HOLDINGS paid out around 58% 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, TA ANN HOLDINGS achieved a low return
of shareholders’ equity, at 5.4%. Its ROE range from 5.4 to 16.5% in the last
five years.
b. COST-TO-INCOME
RATIO: cost-to-income ratio is high at about 755%.
6.
OTHER INDICATORS:
a. CASH
FLOW: cash flow is positive, around RM 127.6 million, equivalent to RM 0.29 per
share
b.
SUPPORT BY INSTITUTIONAL INVESTORS: this counter
is moderately well supported by institutional investors, there are 15 institutional
investors at top 30 major shareholders list, including EPF (6.8%), SOCSO
(1.64%), insurance companies and investment funds. Its major shareholders are MOUNTEX
SDN BHD (21.22%) and DATUK WAHAB BIN HAJI DOLAH (9.64%).
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