COMMENTS ON INNOPRISE PLANTATIONS BERHAD (6262)

FIGURE 1: INNOPRISE PLANTATIONS BERHAD LAST 2 YEARS SHARE PRICE TREND

**analysis based on 2018 annual report.

1.       GENERAL INTRO: INNOPRISE 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 palm oil mills

b.      the Group operates 6 oil palm estates in Sabah with a total planted area of 11,990 hectares and total annual fresh fruit bunches (FFB) production of 209,936 MT.

c.       the group also operates 1 palm oil mill that has a capacity of 60/90 MT FFB per hour and produced 46,542 MT CPO in 2018.

3.       IS THIS COUNTER A STRONG GROWTH STOCK? 

a.       REVENUE RANGE (million): ~114.2 million in 2018 annual report, this is a low revenue company.

b.      SHARE PRICE: from 2018-2020, share price has been decreasing from around RM1.20 to RM0.60, then raised to around RM1.00 by end of 2019

c.       EARNING PER SHARE (EPS): earning per share in last 5 years fluctuated from 1.27 to 8.79sen

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 22.1 million, around 5% of total assets.

4.       IS THIS A STRONG DIVIDEND STOCK?     

a.       DIVIDEND YIELD: in 2018 financial year, INNOPRISE declared a dividend payout of 3 sen per share to shareholders, which amounts to a dividend yield of 3.09%.

b.      CONSISTENCY: the dividend payout was not consistent, dividend paid to shareholders in last five years (2014-2018) ranged from 0 to 4 sen per share.

c.       DIVIDEND PAYOUT RATIO: in 2018, INNOPRISE paid out 151% of its earnings to shareholders in the form of dividend.

5.       IS THE MANAGEMENT PERFORMANCE GOOD?

a.       RETURN ON EQUITY (ROE): in 2019 financial year, INNOPRISE achieved a low return of shareholders’ equity, at 3.07%.

b.      COST-TO-INCOME RATIO: cost-to-income ratio is high, at 815%.

6.       OTHER INDICATORS:

a.       CASH FLOW: cash flow is positive but quite low, around RM 1.53 million, equivalent to RM 0.003 per share

b.      SUPPORT BY INSTITUTIONAL INVESTORS: this counter is not well supported by institutional investors, there are only 9 institutional investors at top 30 major shareholders list, not including insurance companies and investment funds. Its major shareholder are Innoprise Corporation Sdn Bhd (50.22%) and TSH Resources Berhad (21.94%).

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