Valuation of plantation stocks - ranking from lowest PER to highest PER
| Stock | Market Cap RM mil | Net profit | Trailing PER | DPS sen | Dividend yield (%) |
|
SWKPLNT |
633 |
61 |
10.4 |
10 |
4.4 |
|
TAANN |
1,352 |
82.5 |
16.4 |
10 |
3.3 |
|
CHINTEK |
637 |
36 |
17.7 |
11 |
1.6 |
|
TSH |
1,534 |
79.1 |
19.4 |
1.5 |
1.4 |
|
IJMPLNT |
1,647 |
71.3 |
23.1 |
2 |
1.1 |
|
KLK |
24,993 |
962.8 |
26 |
50 |
2.2 |
|
SIMEPLT |
33,528 |
1,185 |
28.3 |
9.44 |
1.9 |
|
IOICORP |
26,586 |
872 |
30.5 |
8 |
1.9 |
|
GENP |
8,247 |
254.4 |
32.5 |
17 |
1.8 |
|
BPLANT* |
1,344 |
-157 |
- |
0.5 |
0.8 |
* Other lossmaking plantation stocks are FGV, UMCCA, JTIASA, TDM and RSAWIT
Most undervalued plantation stocks by PER
1. SWKPLNT at 10.4x
2. TAANN at 16.4x
3. CHINTEK at 17.7x
Most undervalued by dividend yield
1. SWKPLNT at 4.4%
2. TAANN at 3.3%
3. KLK at 2.2%
Windfall profits for plantation stocks
Plantation companies are very likely to make windfall profits in first 6 months of 2021.
Monthly average CPO prices are ~RM3,800 per tonne in Jan-Feb. Prices in Mar is now >RM4,000 per tonne.
Safe to say CPO prices will average >RM3,800 in 1Q21, 41% more than the average RM2,700 per tonne in 1Q20.
| CPO@RM2,700 | CPO@RM3,800 | Change % | ||
| Sales | 2,700 | 3,800 | +41% | |
| Operating cost | 2,000 | 2,000 | ||
| Operating profit | 700 | 1,800 | +157% (3.8x sales growth) |
For example, a plantation company will see operating profit increase 157% at average CPO prices of RM3,800 per tonne, assuming all-in operating cost of RM2,000 per tonne. Operating profit increase 3.8x sales growth because all the increase in CPO prices flow directly to the bottomline.
Monthly average CPO prices are ~RM2,300 per tonne in 2Q2020. As long as CPO prices remain above RM3,000 per tonne, plantation stocks will continue to make windfall profits.
Monthly average CPO prices
http://mpoc.org.my/monthly-palm-oil-trade-statistics-2021/
Disclaimer
All information provided here should be treated for informational purposes only. This is NOT a buy or sell recommendation. Do your own research or consult your investment advisor before you invest. It is solely reflecting author's personal views and the author should not be held liable for any actions taken in reliance on information contained herein.
