R.E.A. holdings plc

besides bourse in malaysia,singapore, and indonesia, still have a small numbers of oil palm player list in london stock exchange. one of the dig out gem(contrary to hidden gem) is NBPOL (subsidiary of kulim bhd), other one is tiny player-Narborough Plantations PLC (Rview related company).

apart from above, let me introduce a bright star oil palm player listed in London Stock Exchange.

R.E.A. Holdings plc is indonesia-based plantation company ,80's in North Sumatra , in 1989, exit North Sumatra entirely , and start a new life in East Kalimantan.


in year 2007, R.E.A. made a extremely well in their plantation performance make all the bolehland planter jealous.

year	2007	2006	2005	2004	2003
ffb/hectare	29.6	25.5	23.8	22.4	16.8
extraction %	23.7	23.2	23.4	24.3	24.9
-
mature	13080	13080	13085	13142	13234
Immature	13328	11814	5250	3000	0
-
ffb produce	393217	334076	313355	293883	222713

source from R.E.A. annual report


Ioi corporation's selected figure from july cy03 to june cy08

fiscal year	08	07	06	05	04
ffb/hectare	28.54	26.72	26.93	27.57	23.91
extraction %	21.38	21.33	21.38	21.59	21.54

from the comparison above, no one win in this struggle, and remind that the results of extraction rate is in line with overall collected crop, but coincidentally the milling scale of them are same, just marginally enough cater to own use.

according to the R.E.A management prudent forecast, ffb production target to 421000tons in year 2008 . and yes, this target was conclusively achieved in the 1st half of 2008 report(1H08) released in the end August of 2008, totalled to 231120tons on the half way, even though this is negate by periodic low yield factor, undoubtedly, the full year target is achievable with no sweat.

after i work out some comparison, found that the "profit per hectare" from R.E.A. make twice money than some Bolehland companies.

the following is the figure of plantation segment from IOI Corporation which is the best plantation company widely known.
The figure is based on calander year ,not fiscal year.
currency is MYR (000)

the above profit is arisen from operating performance before(exclude) taxation ,financing cost, other income, exception income ,and unallocated expenses (i should place some but no idea) , and after(include) marketing and administration expenses.


i will make the same with R.E.A.

the above figure of "Net gain from revalued inventory" is not allowed in malaysia accounting standard (write profit in advance), hence i don't take in comparison, there is no denying that this is handicap game for R.E.A , if R.E.A able to clear inventory, you can write back the gain.



the REA is above 600pence made on May 2008.
compare to today, the price quote at 255.50p.

the number of ordinary shares is 32,574,000, which represent to USD123.533 millions in mkt cap, after deducting 30% tax by indonesia and deducting small amount of preference share dividend, R.E.A still able to trade low at 3.79 pe ratio (based on conservative forecast eps of 1 US dollar in year 2008.)

is it truth?

R.E.A. aggresively expand land in recent year, thought that the completion of acquisition of two estate made in July 2008 should believed a overcharging deal compare to the CPO prospect at that time, but this is all my conjecture.

another issue should pay close attention is feasibility of venturing into coal milling business schemed by management.


at least we can prove how R.E.A holdings playing well in estate work, this is ironic fable for the incompetent company those who bitterly retreat from indonesia such as boustead holdings, they are distorting and evasive ,too many excuse for their behaviour.

i suppose some of the malaysian company overcharge their cost in venture into indonesia, such as umcca(but project about), orient holdings, asiatic, and chintek-nsop JV.