COMMENTS ON RIMBUNAN SAWIT BHD (5113)

FIGURE 1: RIMBUNAN SAWIT BHD LAST 5 YEARS SHARE PRICE TREND

**analysis based on 2018 annual report.

1.       GENERAL INTRO: RIMBUNAN SAWIT 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.

b.      The Group operates 17 oil palm estates in Sarawak with a total planted area of 48,765 hectares and total annual fresh fruit bunches (FFB) production of 345,709 MT.

c.       The group also operates 3 palm oil mill that has a capacity of 185 MT FFB per hour and produced 116,689 MT CPO in 2018. The reported average oil extraction rates (OER) is 20.21%.

d.      The Group experienced considerable losses (-6.54 sen per share) in year 2018. The reduction was mainly due to significant cut in CPO price despite improving revenue on the back of higher sales volume.

3.       IS THIS COUNTER A STRONG GROWTH STOCK? 

a.       REVENUE RANGE (RM million): 338.7 million as reported in 2018 annual report, this is a medium revenue company.

b.      SHARE PRICE: from 2015-2019, share price has decreased from ~ RM0.50 to RM0.15, then increasing sharply to ~RM0.40 by January 2020, due to recent uptrending of CPO price.

c.       EARNING PER SHARE (EPS): earning per share in last 5 years fluctuated from -6.54 to 0.23 sen, making losses in 4 out of last 5 years.

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 66.8 million, around 5% of total assets.

4.       IS THIS A STRONG DIVIDEND STOCK?     

a.       DIVIDEND YIELD: in 2018 financial year, RIMBUNAN SAWIT did not declare a dividend payout to shareholders.

b.      DIVIDEND PAYOUT RATIO: N/A

c.       CONSISTENCY: the dividend payout was not consistent, there was no dividend paid to shareholders in all of last five years.

5.       IS THE MANAGEMENT PERFORMANCE GOOD?

a.       RETURN ON EQUITY (ROE): in 2019 financial year, RIMBUNAN SAWIT reported a very low return of shareholders’ equity, at -30.5%.

b.      COST-TO-INCOME RATIO: N/A

6.       OTHER INDICATORS:

a.       CASH FLOW: cash flow is negative, around RM -17.3 million, equivalent to RM -0.01 per share.

b.      SUPPORT BY INSTITUTIONAL INVESTORS: this counter is not well supported by institutional investors, there are 21 institutional investors at top 30 major shareholders list, including few insurance companies and investment funds. Its major shareholders is Tiong Toh Siong Holdings Sdn Bhd (18.16%).

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