RSAWIT (5113) : Rsawit - On Diesel Boost
The economy outlook in the US continue to be fed with positive data after a lesser than forecast on unemployment figure that was released earlier. With Japan putting a surprising easing in it's market and the anticipation of the ECB to pull in a full blast stimulus, it looks like the bull will have no time to rest anytime soon yet.
While locally, industry that had been of hot focus lately includes semiconductor industry as well as plantation. With the current CPO price at around RM 2300 per ton, it will be great to lock into some position in the plantation company at the current price as anticipation of CPO price going higher towards the end of year and beginning of next year.
Let's have a quick look at Rimbunan Sawit Berhad (Rsawit - 5113)
Rsawit had been trading at the RM 0.80 range before seeing a volatile CPO price and a sudden market correction that had brought the price down to the range of RM 0.67. However, with CPO anticipated to challenge higher in the coming days, Rsawit will be looking to challenge higher and retest the psychological resistance line at RM 0.80.
Rsawit - A Diesel Tale
Rsawit is a palm oil player that operates in Sarawak. The company is mainly controlled by low profile tycoon Tan Sri Datuk Sri Tiong Hiew King, in which he is holding more than 50% of the stakes in the company.
Rsawit had been in the red for the past few financial years, which is partially due to the aggressive expansion and expenditure in buildings of palm oil mills. Rsawit had a massive amount of plantation land bank in Sarawak, which is good enough to see them focusing on their existing land bank for new planting and replanting for the next 3 to 5 years.
Last year, Rsawit had around 31% of immature trees from it's total planted area of 54,659 hectares. This year, Rsawit will be seeing approximately 10% (Around 5400 hectares) of the young trees starting to contribute to the company's revenue.
Beside that, Rsawit will be seeing it's new palm oil mill in Miri that had commenced construction since December 2013 to be operational in the early first quarter of 2015, which will continue to contribute positively towards the company revenue.
The palm oil had taken a hit earlier in the end of August 2014, hitting a lowly RM 1914 per ton (In early September) as the government put initiative to put palm export duty free for 2 months to raise demand for the palm oil, a move that which had been successful. During the 2 months period, palm oil shipments to China soar by 121.7% while India imported 25.8% more, scaling down the growing worries of increasing inventories of the palm.
Current Catalyst
The government had approved the B7 biodiesel program faster than the expected. The B7 biodiesel program will officially starts on November 2014 for Peninsula Malaysia and December 2014 for Sabah and Sarawak. B7 biodiesel program means a mixture of 7% biodiesel and 93% diesel for the diesel that is being retailed in the petrol station.
The implementation of B7 biodiesel will be seeing at least 600,000 tonnes of biodiesel consumption a year.
On the global note, Oil World executive director Thomas Mielke had quoted that the palm oil industry will be facing a major challenge in meeting the global demand for oil and fats by 2018. Thomas Mielke estimates that a total of 32m tonnes of palm oil will have to be produced to satisfy the global demand by 2025, and that the world will be facing shortages by 2018 if there are no acceleration in planting and replanting in the Southeast Asia.
Examples of others plantation leaders starting to move upwards in accordance to the CPO outlook in the coming days.
1. FGV
2. Genting Plantation
3. HapSeng Plantation
In short, CPO will be seeing a good demand in the future outloo. Rsawit will be a good option to be invested into given the current price based on
- B7 biodiesel program kick off in November 2014 for Peninsula Malaysia and December 2014 for East Malaysia
- Rsawit Palm Oil Mill to be operational in early quarter of 2015
- Rsawit to see approximate 10% of young trees to contribute to the productions
- Rsawit huge land bank will be good to occupy them for another 3 to 5 years in new plants and replanting activities
- Upcoming festival events (Christmas, New Year and Chinese New Year) to boost consumption
- Rising demand of CPO from global demands
Bone's short term TP: RM 0.80
Cheers and have a nice day
Regards,
Bone
Bonescythe Stock Watch
http://bonescythe.blogspot.com
The economy outlook in the US continue to be fed with positive data after a lesser than forecast on unemployment figure that was released earlier. With Japan putting a surprising easing in it's market and the anticipation of the ECB to pull in a full blast stimulus, it looks like the bull will have no time to rest anytime soon yet.
While locally, industry that had been of hot focus lately includes semiconductor industry as well as plantation. With the current CPO price at around RM 2300 per ton, it will be great to lock into some position in the plantation company at the current price as anticipation of CPO price going higher towards the end of year and beginning of next year.
Let's have a quick look at Rimbunan Sawit Berhad (Rsawit - 5113)
Rsawit had been trading at the RM 0.80 range before seeing a volatile CPO price and a sudden market correction that had brought the price down to the range of RM 0.67. However, with CPO anticipated to challenge higher in the coming days, Rsawit will be looking to challenge higher and retest the psychological resistance line at RM 0.80.
Rsawit - A Diesel Tale
Rsawit is a palm oil player that operates in Sarawak. The company is mainly controlled by low profile tycoon Tan Sri Datuk Sri Tiong Hiew King, in which he is holding more than 50% of the stakes in the company.
Rsawit had been in the red for the past few financial years, which is partially due to the aggressive expansion and expenditure in buildings of palm oil mills. Rsawit had a massive amount of plantation land bank in Sarawak, which is good enough to see them focusing on their existing land bank for new planting and replanting for the next 3 to 5 years.
Last year, Rsawit had around 31% of immature trees from it's total planted area of 54,659 hectares. This year, Rsawit will be seeing approximately 10% (Around 5400 hectares) of the young trees starting to contribute to the company's revenue.
Beside that, Rsawit will be seeing it's new palm oil mill in Miri that had commenced construction since December 2013 to be operational in the early first quarter of 2015, which will continue to contribute positively towards the company revenue.
The palm oil had taken a hit earlier in the end of August 2014, hitting a lowly RM 1914 per ton (In early September) as the government put initiative to put palm export duty free for 2 months to raise demand for the palm oil, a move that which had been successful. During the 2 months period, palm oil shipments to China soar by 121.7% while India imported 25.8% more, scaling down the growing worries of increasing inventories of the palm.
Current Catalyst
The government had approved the B7 biodiesel program faster than the expected. The B7 biodiesel program will officially starts on November 2014 for Peninsula Malaysia and December 2014 for Sabah and Sarawak. B7 biodiesel program means a mixture of 7% biodiesel and 93% diesel for the diesel that is being retailed in the petrol station.
The implementation of B7 biodiesel will be seeing at least 600,000 tonnes of biodiesel consumption a year.
On the global note, Oil World executive director Thomas Mielke had quoted that the palm oil industry will be facing a major challenge in meeting the global demand for oil and fats by 2018. Thomas Mielke estimates that a total of 32m tonnes of palm oil will have to be produced to satisfy the global demand by 2025, and that the world will be facing shortages by 2018 if there are no acceleration in planting and replanting in the Southeast Asia.
Examples of others plantation leaders starting to move upwards in accordance to the CPO outlook in the coming days.
1. FGV
2. Genting Plantation
3. HapSeng Plantation
In short, CPO will be seeing a good demand in the future outloo. Rsawit will be a good option to be invested into given the current price based on
- B7 biodiesel program kick off in November 2014 for Peninsula Malaysia and December 2014 for East Malaysia
- Rsawit Palm Oil Mill to be operational in early quarter of 2015
- Rsawit to see approximate 10% of young trees to contribute to the productions
- Rsawit huge land bank will be good to occupy them for another 3 to 5 years in new plants and replanting activities
- Upcoming festival events (Christmas, New Year and Chinese New Year) to boost consumption
- Rising demand of CPO from global demands
Bone's short term TP: RM 0.80
Cheers and have a nice day
Regards,
Bone
Bonescythe Stock Watch
http://bonescythe.blogspot.com
