With the recently CPO price decline, plantation stocks experienced big sell off on past few weeks. With the big sell, it provide a good opportunity for those keen to invest on plantation stocks. Besides KimLoong & SOP mentioned before in my blog, Kwantas and TSH are the plantation counters are worth to be accumulated when any further down slide on their share price.
Kwantas started small in 1995, it owned 10,000 ha of plantations. Today, it has a total landbankof 52K ha mainly located in LahadDatu, Sabah and Sarawak. It has planted 15K ha of palm oil (2007 data)and 13K ha are matured. The group has established a wide range of downstream business in China. It has fully equipped bulking and refinery plants in China and is expected to reap its maiden contribution from its oleo chemical business after it set up in China/
Oil palm plantation only contribute 40% of the operational profit in F07, and 21 % for the manufacturing and processing of the oil Palm products in Malaysia while China down stream activities contributed 30%. With continue expanding downstream activities in China, the contribution from downstream will continue to grow it buffers the company from purely depending on CPO prices.
The EPS of its 9 months end of FY08 is RM0.37, the FY08 full year result is estimated as around RM0.5 0 which will translated to PER value of 6 times only.
I will share more on Kwantas and TSH next time
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