Current quarter
Revenue 60,567
Profit before tax 26,825
Profit for the period 19,506
Profit attributable to
the parent 19,313
eps 22.72sen
selling price of inventory :unstated
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figure of the month:
cpo / pk / mpob benchmark
Jan-07 4,445 1,269 1950
Feb-07 3,462 796 1950
Mar-07 3,683 856 1950
Apr-07 3,665 799 -
May-07 4,031 883 -
Jun-07 3,687 810 -
Jul-07 4,657 983 -
Aug-07 5,939 1362 -
Sep-07 7,084 1580 -
Oct-07 5,894 1,340 -
Nov-07 7,193 1,641 -
Dec-07 5,169 1,297 -
Jan-08 4,962 1247 3490
Feb-08 4083 1053 3490
Mar-08 3,816 876 3490
Apr-08 4,768 1,094 -
ffb production monthly figure:unstated , very eccentric
forthwith comment by author : compare between 08q1 and 07q1 , adhere to proof provided by benchmarking and inventory consume(balance sheet date), bldplnt has a inclination to better bargaining power of average selling price.
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note: acquisition on wawasan sedar was waived.
link here
summary on 2006
BLD Plantation (BLDP) is an investment holding company while its subsidiaries are principally involved in the cultivation of oil palm, processing of fresh fruit bunches and sale of related products. As at end-2006, the group’s total land bank was approximately 53,000 hectares (ha), of which around 10,300 ha were matured areas.
take review to annual report 2007 , the Group has a total landbank 53,030 hectares of which about 23,000 ha are oil palm planted areas with about 50% maturity. We expect output to grow at a sustainable pace, as more palm trees will mature over the next 2 to 3 years before the crop production peaks. We are also aggressively sustaining our planting programmes in the next 5 years to ensure that there is an increasing ratio of own supply of the related products for our mill, Refinery and Crushing Plant consumption.
The Fresh Fruit Bunches production of the Group grew about 3.6% to about 211,000 metric tonnes compared to the previous year. The production of Crude Palm Oil in 2007 was about 59,000 metric tonnes which was a decrease of about 26% against 2006, mainly due to the reduction of FFB received from external suppliers and small holders as a result of more mills come on stream. The mill operated at approximately 75% of its capacity and the Oil Extraction Rate was achieved at about 21.94%.
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research on 29 December 2006.
No major hurdles expected for Wawasan acquisition. The Securities Commission has waived the requirement for KTS Holdings and PAC to make a mandatory general offer for BLD Plantation. However, this is subject to the approval of BLD’s independent shareholders, appointment of an independent adviser and submission by KTS and PAC that they have not purchased shares in BLD Plantation in six months. Also, the independent adviser’s circular to the shareholders has to be approved by the SC. We believe these conditions will most likely be met and hence, do not see major hurdles to the deal, especially in view of the good CPO price prospects.
Upbeat CPO price outlook to support deal. The bullish prospects for CPO price in 2007 and 2008 will mitigate the earnings-dilutive effect of the proposed acquisition. We earlier estimated that it could dilute BLD’s EPS by as much as 19% in FY06, based on a CPO price assumption of RM1,480 per tonne. In view of our expectation that CPO price will average RM1,850 in 2007 and RM1,900 in 2008, we now expect the acquisition to have a neutral impact on EPS.
Upping FY07 EPS. We retain our EPS forecast of 20.4 sen for 2006 but have raised our FY07 estimate by 26% to 34.9 sen after factoring in the recent upward revision of our CPO price forecast. We recently increased our CPO price assumption from RM1,680/tonne to RM1,850 for 2007 and from RM1,730 to RM1,900 for 2008 to account for the severe drought in Australia and some parts of Indonesia as well as new exchange rate assumptions.
Upgrade to BUY. Our target price for BLD Plantation has been raised from RM2.50 to RM3.10 in view of our earnings upgrade. There is no change to our target price basis. We continue to apply a forward target P/E of 9x, which is based on a 50% discount to the average plantation sector P/E. In line with our target price upgrade, we are upgrading our call from hold to BUY. The stock offers 25% upside to our new target price and a dividend yield of 4%. The main factor that will drive the share price is a CPO price upswing.
Recent developments
Conditional clearance from SC for proposed waiver. The Securities Commission has approved the proposed waivers from making a mandatory general offer for BLD Plantation by KTS Holdings and PAC. However, this is subject to the approval of BLD’s independent shareholders, appointment of an independent adviser and submission by KTS and PAC that they have not purchased shares in BLD Plantation in six months. Also, the independent adviser’s circular to the shareholders has to be approved by the SC. We believe these conditions will most likely be met and hence, do not see major hurdles to the deal, especially in view of the good CPO price prospects.
Recap on acquisition. In Jul 06, BLD Plantation proposed to acquire a 39% stake in Wawasan Sedar for RM117.9m and subscribe for a 17.9% stake in Wawasan for RM93.7m. The company will also be granted subscription rights to raise its stake from 49.9% to slightly more than 50%. The purchase will be funded by RM211.6m bank borrowings and 20.8m new shares issued at RM2.40 per share. Positive on plans to expand land bank… The deal will boost BLD’s plantation land bank by 32% to 69,818ha, which when fully planted, will turn it from a small planter with approximately 17,000ha of planted estates to a mid-sized planter. The acquisition will also increase the group’s internal sourcing of CPO for its proposed refinery.
… but price appears rich. Our only reservation is the pricing for the estates, which works out to an EV/ha of RM28,413. This appears expensive relative to the implied market value of around RM12,350/ha for BLD’s own planted estates. On a historical P/E basis, the purchase price for the initial 39% stake in Wawasan also appears hefty at 33x P/E, which is a huge premium to BLD’s historical P/E valuation. Upbeat CPO price outlook to support deal. The bullish prospects for CPO price in 2007 and 2008 will mitigate the earnings-dilutive effect of the proposed acquisition.
We earlier estimated that it could dilute BLD’s EPS by as much as 19% in FY06, based on a CPO price assumption of RM1,480 per tonne. In view of our expectation that CPO price will average RM1,850 in 2007 and RM1,900 in 2008, we now expect the acquisition to have a neutral impact on EPS.
Earnings outlook
Upping FY07 EPS. We retain our EPS forecast of 20.4 sen for 2006 but have raised our FY07 estimate by 26% to 34.9 sen after factoring in our recent upward revision to our CPO price forecast. We recently increased our CPO price assumption from RM1,680/tonne to RM1,850 for 2007 and from RM1,730 to RM1,900 for 2008. Our earnings forecast assumes that BLD Plant will record a better 4Q06 performance due to the higher CPO price achieved. Overall, we expect it to show a 4% decline in FY06 net profit due to the absence of RM5.2m annual amortisation of negative goodwill following the adoption of FRS 136. For FY07, we expect BLD to record a 71% jump in net profit to RM29.7m due mainly to higher achieved CPO prices.
Recommendation
Upgrade to BUY. We continue to base our target price on a target forward P/E of 9x. However, our target price for BLD Plantation has been raised from RM2.50 to RM3.10 in view of our earnings upgrade. In line with our target price upgrade, we are raising our call on BLD Plantation from hold to BUY. The stock now offers 24% upside to our new target price and a dividend yield of 4%. The main factor that will drive the share price is a CPO price upswing.
research on 29 December 2006 -end
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filed: 08jun02: BLDP BM Quarterly Report Mar 2008.pdf , BLD Plantation update sp.pdf , BLD Plantation_29122006_Upgrade to Buy-BURSA.pdf , bld month figure to april08.xls
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