KMLOONG (5027) - KMLOONG Updates – 11 Jul 2017

KMLOONG Analysis File – http://wp.me/a17Hxk-2He
In my opinion, KMLOONG is overvalued where its fair value range from 3.2 to 3.4.
At 3.9 (11 Jul 2017),

1. if based on fair value projection for FY17, investors assume CPO production of KMLOONG is 289,634MT and average selling price of CPO is 2,782-2,882. However, in FY17, the actual CPO production is 250,197MT and average selling price of CPO is 2,682. This is a strong signal of overvalue.
   
2. if based on fair value projection for FY19, investors assume CPO production of KMLOONG is 355,448MT which is unrealistic for the size of plantable area owned by KMLOONG. This is a strong signal of overvalue.

As of now, I won’t consider to accumulate KMLOONG, and offload KMLOONG gradually. CPO industry is cyclical, so no point to hold for long term.
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https://lcchong.wordpress.com/2017/07/11/kmloong-updates-11-jul-2017/