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Tuesday, February 28, 2012

Results of SOP, TWSP and TDM

Sorry for my absence. I was traveling around lately. Generally the quarterly results of plantation counters were more or less within my expectations. 4Q might not be as good as 3Q owing to lesser production caused by the rainy season and floods coupled with slightly lower CPO average price. Nonetheless, one of the more disappointing ones is SOP. 

SOP only managed to obtain net profit of only RM43mil in 4Q compared to RM75mil in 3Q. The reason for the huge drop was owing to a delay in delivery of CPO committed to a buyer, according to Maybank. However, the delivery will be recognized in 1Q2012 instead. SOP share price had risen substantially over the past few months, PER at around 11.2x currently. Further upside? Maybe, but seems quite fairly valued IMO, less upside. It's better to switch to other cheaper plantation counters instead. 

TWSP net profit was boosted by its one-off bargain purchase gain of RM18.4mil from acquisition of Mardec. Excluding that, net profit should be around RM80mil, lower than its 3Q net profit of RM99mil owing to lower palm oil prices and higher fertilizer costs. Assuming profit of RM317mil (excluding one-off gain) for FY2011, PER should be around 8.8x based on diluted EPS of 50 sen. Still attractive fundamentally, but shares are weak and illiquid for now, lacking in buyers. Can consider accumulating on weakness.

TDM quarterly results were better than TWSP and SOP. Net profit achieved was RM44mil for 4Q2011. Total net profit at RM157mil for FY2011 or EPS of 66.3 sen. PER 2011 is only at 7.2x coupled with net cash of more than RM220mil. Thus, there's still plenty of upside to come. By valuing TDM at PER of 10x, its stock price should exceed RM6.00 per share. 

Other stocks worth looking at: Mudajaya, Coastal, Kim Loong, BLD Plantation and Kfima owing to their attractive valuations. 

2 comments:

  1. Hi! I like to read your blog as your blog do give me a lot of knowledge. However, I do have one question regarding that TWSPlnt. Hopefully can obtain more information from you.
    "TWSP net profit was boosted by its one-off bargain purchase gain of RM18.4mil from acquisition of Mardec."
    How can we find that information? Is it in the cash flow section? But is it negative in value?

    ReplyDelete
  2. You have to read the notes to financial statements, not just the financial statements. They'll tell you many things.

    ReplyDelete