FIGURE 1: KIM LOONG
RESOURCES BERHAD LAST 2 YEARS SHARE PRICE TREND
**analysis
based on 2019 annual report.
1.
GENERAL INTRO: KIM LOONG RESOURCES is one of the
main oil palm plantations in Malaysia.
2.
NOTABLE POINTS:
a. In
2019 report, main business segments include operation of oil palm plantations
and palm oil mills
b. the
Group operates oil palm estates in Johor, Sabah and Sarawak, with a total
planted area of 14,901 hectares and total annual fresh fruit bunches (FFB)
production of 304,732 MT
c. the
Group also operate 3 palm oil mills with a total processing capacity of 1.5
million MT per annum.
d. the
mills are installed with biogas engines, which are capable of converting
methane gas to electricity, which supplies power to the milling operation as
well as the grid.
e. The
drop in earnings in 2019 compared to 2018 was mainly due to lower palm oil
prices and FFB production
3.
IS THIS COUNTER A STRONG GROWTH STOCK?
a. REVENUE
RANGE (million): ~872.9 million in 2019 annual report, this is a medium revenue
company.
b. SHARE
PRICE: from 2015-2019, share price dropped abruptly from around RM4.00 to
RM1.30, due to 3 for 1 share splitting, then it maintained same price till end
of 2019, where share price increased slightly to ~RM 1.60
c. EARNING
PER SHARE (EPS): earning per share in last 5 years fluctuated from 6 to 10sen
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 26.6
million, around 2% of total assets.
4.
IS THIS A STRONG DIVIDEND STOCK?
a. DIVIDEND
YIELD: in 2018 financial year, KIM LOONG RESOURCES declared a dividend payout of
6 sen per share to shareholders. This amounts to dividend yield of 3.75%.
b. CONSISTENCY:
the dividend payout was consistent, last five years (2015-2019) dividends
declared range between 4 to 8 sen per share.
c. DIVIDEND
PAYOUT RATIO: the dividend payout ratio for current financial year is 107%.
5.
IS THE MANAGEMENT PERFORMANCE GOOD?
a. RETURN
ON EQUITY (ROE): in 2019 financial year, KIM LOONG RESOURCES achieved a low return
of shareholders’ equity, at 7.23%. It ROE ranged from 7.23 to 14.67% in the
last five years.
b. COST-TO-INCOME
RATIO: cost-to-income ratio is high, at 889%.
6.
OTHER INDICATORS:
a. CASH
FLOW: cash flow is positive, around RM 191.84 million, equivalent to RM 0.21
per share
b.
SUPPORT BY INSTITUTIONAL INVESTORS: this counter
is moderately well supported by institutional investors, there are 14 institutional
investors at top 30 major shareholders list, including few insurance companies and
investment funds. Its major shareholder is SHARIKAT KIM LOONG SDN BHD (63.27%).
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