FIGURE 1: BOUSTEAD
PLANTATIONS BERHAD LAST 5 YEARS SHARE PRICE TREND
**analysis
based on 2018 annual report.
1.
GENERAL INTRO: BOUSTEAD PLANTATIONS 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 milling operations. In addition, the Group is also involved in the
provision of mill design and consultancy services.
b. The
Group operates 46 oil palm estates in Peninsular Malaysia, Sabah and Sarawak
with a total planted area of 75,000 hectares and total annual fresh fruit
bunches (FFB) production of 966,134 MT.
c. The
group also operates 9 palm oil mill that has a capacity of 405 MT FFB per hour
and produced 211,847 MT CPO in 2018. The reported average oil extraction rates
(OER) is 21.2%, which is higher than MPOB's national average of 19.9%.
d. The
Group also currently operates one biogas plant that captures methane gas produced
from milling processes.
e. The
Group posted a loss before tax of RM51 million for the financial year 2018.
This was primarily as a result of significantly lower palm product prices which
impacted its bottom line. High start-up expenses for the acquisition of 11,579
hectares of land in Sabah and the rehabilitation and improvements for these
estates also contributed to the deficit.
f.
As part of the Group’s efforts to reduce labour
dependency, maximise effciency and optimise productivity, it continued with the
mechanisation of its operations, including utilised harvesting tools such as
lightweight graphite poles for tall palms, mini tractor grabbers with bin
systems, motorised wheelbarrows (for hilly areas) and smart fertiliser
spreaders.
3.
IS THIS COUNTER A STRONG GROWTH STOCK?
a. REVENUE
RANGE (RM million): 584 million as reported in 2018 annual report, this is a medium
revenue company.
b. SHARE
PRICE: from 2015-2018, share price has been steady at around RM1.50 , then on
decreasing trend to around RM0.70 by around January 2020
c. EARNING
PER SHARE (EPS): earning per share in last 5 years fluctuated from -2.3 to 27.7
sen
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 82.6
million, around 2% of total assets.
4.
IS THIS A STRONG DIVIDEND STOCK?
a. DIVIDEND
YIELD: in 2018 financial year, BOUSTEAD PLANTATIONS declared a dividend payout of
7 sen per share to shareholders, which amounts to a dividend yield of 9.72%.
b. CONSISTENCY:
the dividend payout was consistent, dividend paid to shareholders in last five
years (2014-2018) ranged from 6 to 19.5 sen per share, with a dividend yield
range from 4.1 to 11.8 %.
c. DIVIDEND
PAYOUT RATIO: N/A
5.
IS THE MANAGEMENT PERFORMANCE GOOD?
a. RETURN
ON EQUITY (ROE): in 2018 financial year, BOUSTEAD PLANTATIONS achieved a low return
of shareholders’ equity, at -1.8%. Last five years ROE ranged from -1.8 to 21.7%.
b. COST-TO-INCOME
RATIO: N/A
6.
OTHER INDICATORS:
a. CASH
FLOW: cash flow is positive, around RM 52.6 million, equivalent to RM 0.02 per
share
b.
SUPPORT BY INSTITUTIONAL INVESTORS: this counter
is well supported by institutional investors, there are 18 institutional
investors at top 30 major shareholders list, including EPF (4.76%), insurance
companies and investment funds. Its major shareholders are Boustead Holdings
Berhad (57.42%) and Lembaga Tabung Angkatan Tentera (12.1%).
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