COMMENTS ON KLUANG RUBBER CO (MALAYA) BERHAD (2453)
FIGURE 1: KLUANG RUBBER CO (MALAYA) BERHAD LAST 5 YEARS SHARE PRICE TREND
**analysis based on 2019 annual report.
1. GENERAL INTRO: KLUANG RUBBER is one of the main oil palm plantations in Malaysia.
2. NOTABLE POINTS:
a. In 2019 report, stated that the Group's revenue was made up
of the sale of fresh fruit bunches (“FFB”), dividend income, rental
income and interest income. It is not involved in milling processing of
FFB to crude palm oil.
b. The Group owns three estates with a total planted area of 6502 hectares
c. in current financial year, the Group reported losses of
-22.9 sen per share. In addition to weather and labour challenges,
certain fields were attacked by bagworms, resulting in a negative impact
on production.
d. Although faced with challenges of unpredictable weather
conditions and labour concerns, the Group continues to remain positive
on the long term fundamentals of the oil palm industry.
e. The Group also have significant share investments in few
listed companies: Kuchai Development Berhad, Sungei Bagan Rubber Company
(Malaya) Berhad and Singapore Press Holdings Limited
3. IS THIS COUNTER A STRONG GROWTH STOCK?
a. REVENUE RANGE (million): ~22.6 million in 2019 annual report, this is a low revenue company.
b. SHARE PRICE: from 2015-2019, share price range between RM3.00 to RM4.50
c. EARNING PER SHARE (EPS): earning per share in last 5 years fluctuated from -22.9 to 10.87sen
d. FUTURE POTENTIAL/PROSPECTS: share price may drop in the next few years if continue to make losses
e. CAPITAL EXPENDITURE (CAPEX): spending on purchase of new fixed assets is RM 8.1 million, around 0.6% of total assets.
4. IS THIS A STRONG DIVIDEND STOCK?
a. DIVIDEND YIELD: in 2019 financial year, KLUANG RUBBER
declared a dividend payout of 6 sen per share to shareholders despite
making losses. The dividend yield amounts to 1.77% only.
b. CONSISTENCY: consistent dividend payout, last five years
(2014-2018) dividends declared range between 1 to 6 sen per share.
c. DIVIDEND PAYOUT RATIO: N/A
5. IS THE MANAGEMENT PERFORMANCE GOOD?
a. RETURN ON EQUITY (ROE): in 2019 financial year, KLUANG
RUBBER achieved a negative return of shareholders’ equity, at -1.23%,
due to making losses.
b. COST-TO-INCOME RATIO: cost-to-income ratio is negative at about -2015%.
6. OTHER INDICATORS:
a. CASH FLOW: cash flow is positive, around RM 135.8 million, equivalent to RM 2.15 per share
b. SUPPORT BY INSTITUTIONAL INVESTORS: this counter is not well
supported by institutional investors, there are only 4 institutional
investors at top 30 major shareholders list, not including major
institutions such as EPF, PERMODALAN NASIONAL BERHAD, SKIM AMANAH SAHAM
BUMIPUTERA, KUMPULAN WANG PERSARAAN, insurance companies and investment
funds. Its major shareholder is THE NYALAS RUBBER ESTATES LIMITED
(43.68%).
http://louisesinvesting.blogspot.com/2019/12/comments-on-kluang-rubber-co-malaya.html
