FIGURE 1: KIM LOONG RESOURCES BERHAD LAST 2 YEARS SHARE PRICE TREND
**analysis based on 2019 annual report.
1. GENERAL INTRO: KIM LOONG RESOURCES is one of the main oil palm plantations in Malaysia.
2. NOTABLE POINTS:
a. In 2019 report, main business segments include operation of oil palm plantations and palm oil mills
b. the Group operates oil palm estates in Johor, Sabah and
Sarawak, with a total planted area of 14,901 hectares and total annual
fresh fruit bunches (FFB) production of 304,732 MT
c. the Group also operate 3 palm oil mills with a total processing capacity of 1.5 million MT per annum.
d. the mills are installed with biogas engines, which are
capable of converting methane gas to electricity, which supplies power
to the milling operation as well as the grid.
e. The drop in earnings in 2019 compared to 2018 was mainly due to lower palm oil prices and FFB production
3. IS THIS COUNTER A STRONG GROWTH STOCK?
a. REVENUE RANGE (million): ~872.9 million in 2019 annual report, this is a medium revenue company.
b. SHARE PRICE: from 2015-2019, share price dropped abruptly
from around RM4.00 to RM1.30, due to 3 for 1 share splitting, then it
maintained same price till end of 2019, where share price increased
slightly to ~RM 1.60
c. EARNING PER SHARE (EPS): earning per share in last 5 years fluctuated from 6 to 10sen
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 26.6 million, around 2% of total assets.
4. IS THIS A STRONG DIVIDEND STOCK?
a. DIVIDEND YIELD: in 2018 financial year, KIM LOONG RESOURCES
declared a dividend payout of 6 sen per share to shareholders. This
amounts to dividend yield of 3.75%.
b. CONSISTENCY: the dividend payout was consistent, last five
years (2015-2019) dividends declared range between 4 to 8 sen per share.
c. DIVIDEND PAYOUT RATIO: the dividend payout ratio for current financial year is 107%.
5. IS THE MANAGEMENT PERFORMANCE GOOD?
a. RETURN ON EQUITY (ROE): in 2019 financial year, KIM LOONG
RESOURCES achieved a low return of shareholders’ equity, at 7.23%. It
ROE ranged from 7.23 to 14.67% in the last five years.
b. COST-TO-INCOME RATIO: cost-to-income ratio is high, at 889%.
6. OTHER INDICATORS:
a. CASH FLOW: cash flow is positive, around RM 191.84 million, equivalent to RM 0.21 per share
b. SUPPORT BY INSTITUTIONAL INVESTORS: this counter is
moderately well supported by institutional investors, there are 14
institutional investors at top 30 major shareholders list, including few
insurance companies and investment funds. Its major shareholder is
SHARIKAT KIM LOONG SDN BHD (63.27%).
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as well as follow up latest update information before making any
investment decisions.
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