FIGURE 1: KRETAM HOLDINGS BHD
LAST 5 YEARS SHARE PRICE TREND
**analysis
based on 2018 annual report.
1.
GENERAL INTRO: KRETAM HOLDINGS 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, milling and refinery.
b.
The Group operates oil palm estates in Sabah
with a total planted area of 19,567 hectares and total annual fresh fruit
bunches (FFB) production of 338,204 MT.
c.
The group also operates 3 palm oil mills that
has a capacity of 135 MT FFB per hour and produced 108,216 MT CPO in 2018. The
reported average oil extraction rates (OER) is 20.23%.
d.
The Group is also operating a refinery with a
processing capacity of 1,500 metric tonnes of crude palm oil per day and a
biodiesel plant to produce 300 metric tonnes of PME per day. The Group also has
two fertiliser plants, one in Tawau and the other in Sandakan with a total
production capacity of 60,000 metric tonnes.
e.
In terms of revenue, a 21.6% drop was mainly
attributed to the low palm products prices in 2018. As for the Group, it
recorded a loss of RM38.5 million. The loss before interest and tax compared to
revenue generated was a result of the downtrend in commodity prices, where
products were sold at a lower profit margin.
3.
IS THIS COUNTER A STRONG GROWTH STOCK?
a. REVENUE
RANGE (RM million): 508.9 million as reported in 2018 annual report, this is a medium
revenue company.
b. SHARE
PRICE: from 2015-2019, share price ranged between RM0.40 to RM0.60, except for
a spike to ~RM0.80 in 2018
c. EARNING
PER SHARE (EPS): earning per share in last 5 years fluctuated from -1.66 to 0.87
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 35.6
million, around 4% of total assets.
4.
IS THIS A STRONG DIVIDEND STOCK?
a. DIVIDEND
YIELD: in 2018 financial year, KRETAM did not declare a dividend payout to
shareholders.
b. DIVIDEND
PAYOUT RATIO: N/A
c. CONSISTENCY:
the dividend payout was not consistent, the dividend paid to shareholders in the
last five years (2014-2018) ranged from 0 to 1 sen per share.
5.
IS THE MANAGEMENT PERFORMANCE GOOD?
a. RETURN
ON EQUITY (ROE): in 2019 financial year, KRETAM reported a low return of shareholders’
equity, at -6.27%.
b. COST-TO-INCOME
RATIO: N/A
6.
OTHER INDICATORS:
a. CASH
FLOW: cash flow is positive but very low, around RM 17 million, equivalent to
RM 0.01 per share
b.
SUPPORT BY INSTITUTIONAL INVESTORS: this counter
is not well supported by institutional investors, there are only 6 institutional
investors at top 30 major shareholders list, not including insurance companies and
investment funds. Its major shareholders are Datuk Lim Nyuk Sang @ Freddy Lim (47.18%)
and Santraprise Sdn Bhd (19.84%).
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