COMMENTS ON HAP SENG PLANTATIONS HOLDINGS BERHAD (5138)
FIGURE 1: HAP SENG PLANTATIONS HOLDINGS BERHAD LAST 5 YEARS SHARE PRICE TREND
**analysis based on 2018 annual report.
1. GENERAL INTRO: HAP SENG 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 palm oil mills
b. the Group operates oil palm estates in Sabah, with a total
planted area of 35,957 hectares and total annual fresh fruit bunches
(FFB) production of 657,259 MT
c. the group also operates 4 palm oil mills with a total processing capacity of 180 MT FFB per hour.
d. in 2018 financial year, the Group reported lower revenue than
previous year due to lower average prices of crude palm oil (CPO) and
palm kernel (PK).
3. IS THIS COUNTER A STRONG GROWTH STOCK?
a. REVENUE RANGE (million): ~390.7 million in 2018 annual report, this is a medium revenue company.
b. SHARE PRICE: from 2015-2019, share price steady at around
RM2.50, in 2018 dropped to around RM1.50, then returned back to ~RM2.00
by end of 2019
c. EARNING PER SHARE (EPS): earning per share in last 5 years fluctuated from 3.64 to 16.04sen
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 76.8 million, around 3% of total assets.
4. IS THIS A STRONG DIVIDEND STOCK?
a. DIVIDEND YIELD: in 2018 financial year, HAP SENG PLANTATIONS
declared a dividend payout of 2.5 sen per share to shareholders. This
amounts to dividend yield of 1.17%.
b. CONSISTENCY: the dividend payout was consistent, last five
years (2014-2018) dividends declared range between 2.5 to 11 sen per
share.
c. DIVIDEND PAYOUT RATIO: the dividend payout ratio for current financial year is 68%.
5. IS THE MANAGEMENT PERFORMANCE GOOD?
a. RETURN ON EQUITY (ROE): in 2018 financial year, HAP SENG
PLANTATIONS achieved a low return of shareholders’ equity, at 1.78%. It
ROE ranged from 1.78 to 6.59% in the last five years.
b. COST-TO-INCOME RATIO: cost-to-income ratio is high, at 953%.
6. OTHER INDICATORS:
a. CASH FLOW: cash flow is positive, around RM 40.3 million, equivalent to RM 0.05 per share
b. SUPPORT BY INSTITUTIONAL INVESTORS: this counter is
moderately well supported by institutional investors, there are 20
institutional investors at top 30 major shareholders list, including EPF
(8.71%), few insurance companies and investment funds. Its major
shareholder is HAP SENG CONSOLIDATED BERHAD (53.04%) and INNOPRISE
CORPORATION SDN BHD (15.00%).
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