FIGURE 1: CEPATWAWASAN
GROUP BHD LAST 2 YEARS SHARE PRICE TREND
**analysis
based on 2018 annual report.
1.
GENERAL INTRO: CEPATWAWASAN 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 as well as biomass and biogas power plants.
b. The
Group operates oil palm estates in Sabah with a total planted area of 8,442
hectares and total annual fresh fruit bunches (FFB) production of 121,514 MT.
c. The
group also operates 1 palm oil mill that has a capacity of 90 MT FFB per hour
and produced 75,847 MT CPO in 2018. The reported average oil extraction rates
(OER) is 19.51%.
d. The
Group is also operating a 12 Megawatt Biomass power plant and a 4.0 Megawatt
Biogas power plant, both in Sandakan, Sabah
e. In
2018, the Group recorded a decrease in earning per share from 7.82 to 1.72 sen
per share compared to 2017, due to a decrease of FFB production, lower CPO
selling prices and decrease sales from its biomass power plant.
3.
IS THIS COUNTER A STRONG GROWTH STOCK?
a. REVENUE
RANGE (RM million): 240.6 million as reported in 2018 annual report, this is a medium
revenue company.
b. SHARE
PRICE: from 2018-2020, share price has been decreasing from around RM0.80 to RM
0.50, then increasing quickly to around RM0.65 by January 2020
c. EARNING
PER SHARE (EPS): earning per share in last 5 years fluctuated from 1.72 to 7.82
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 13.2
million, around 2% of total assets.
4.
IS THIS A STRONG DIVIDEND STOCK?
a. DIVIDEND
YIELD: in 2018 financial year, CEPATWAWASAN declared a dividend payout of 1.5
sen per share to shareholders, which amounts to a dividend yield of 2.31%.
b. CONSISTENCY:
the dividend payout was consistent, dividend paid to shareholders in last five
years (2014-2018) ranged from 1.5 to 2 sen per share.
c. DIVIDEND
PAYOUT RATIO: in 2018 financial year, CEPATWAWASAN paid out 87% of its earnings
to shareholders in the form of dividends.
5.
IS THE MANAGEMENT PERFORMANCE GOOD?
a. RETURN
ON EQUITY (ROE): in 2018 financial year, CEPATWAWASAN achieved a low return of
shareholders’ equity, at 1.39%.
b. COST-TO-INCOME
RATIO: cost-to-income ratio is very high, at 2603%, meaning that materials and operational
costs are very high and profit is low.
6.
OTHER INDICATORS:
a. CASH
FLOW: cash flow is positive, around RM 14.8 million, equivalent to RM 0.05 per
share
b.
SUPPORT BY INSTITUTIONAL INVESTORS: this counter
is not well supported by institutional investors, there are only 8 institutional
investors at top 30 major shareholders list, not including insurance companies and
investment funds. Its major shareholders is MHC Plantations Bhd (28.75%).
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