COMMENTS ON TH PLANTATIONS BHD (5112)

FIGURE 1: TH PLANTATIONS BHD LAST 2 YEARS SHARE PRICE TREND

**analysis based on 2018 annual report.

1.       GENERAL INTRO: TH 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 milling operations.

b.      The Group operates 36 oil palm estates in Johor, Pahang, Negeri Sembilan,  Terengganu, Sabah, Sarawak and Kalimantan (Indonesia) with a total planted area of 58,069 hectares and total annual fresh fruit bunches (FFB) production of 910,316 MT.

c.       The group also operates 7 palm oil mills that produced 185,623 MT CPO in 2018. The reported average oil extraction rates (OER) is 19.94%.

d.      In 2018, the Group reported a great loss before tax of RM678.1 million, which translated to a loss per share of 67.27 sen. This was attributed to impairment losses from its subsidiaries.

3.       IS THIS COUNTER A STRONG GROWTH STOCK? 

a.       REVENUE RANGE (RM million): 519.3 million as reported in 2018 annual report, this is a medium revenue company.

b.      SHARE PRICE: share price decreasing from around RM1.50 to RM0.25, then increasing sharply to around RM0.60 by January 2020.

c.       EARNING PER SHARE (EPS): earning per share in last 5 years fluctuated from -67.27 to 16.64 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 71.8 million, around 2% of total assets.

4.       IS THIS A STRONG DIVIDEND STOCK?     

a.       DIVIDEND YIELD: in 2018 financial year, TH PLANTATIONS did not declared a dividend payout to shareholders.

b.      CONSISTENCY: the dividend payout was not consistent, dividend paid to shareholders in last five years (2014-2018) ranged from 0 to 6 sen per share.

c.       DIVIDEND PAYOUT RATIO: N/A

5.       IS THE MANAGEMENT PERFORMANCE GOOD?

a.       RETURN ON EQUITY (ROE): in 2018 financial year, TH PLANTATIONS reported a low return of shareholders’ equity, at -60.12%.

b.      COST-TO-INCOME RATIO: N/A

6.       OTHER INDICATORS:

a.       CASH FLOW: cash flow is positive, around RM 51 million, equivalent to RM 0.06 per share

b.      SUPPORT BY INSTITUTIONAL INVESTORS: this counter is moderately well supported by institutional investors, there are 24 institutional investors at top 30 major shareholders list, including few insurance companies and investment funds. Its major shareholders are LEMBAGA TABUNG HAJI (73.84%) and EPF (7.00%).

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