KMLOONG (5027) - KMLOONG – Fundamental Analysis (23 Jun 2016)


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Latest Financial – Q4 2016 Financial Report (29 Mar 2016)
FY16 Q4 Results Highlight:
  • The revenue and profit before tax of the Group were recorded marginally lower at RM757.73 million and RM107.58 million respectively for FY16, as compared to RM774.93 million and RM118.86 million respectively for FY15.
  • In FY16, total plantation land holdings stood at 15,905 Ha of which 94% are fully planted with palms. From the total planted area, approx. 84% are mature above 6 years old, 8% are young mature below 6 years old while the remaining 8% are at immature stage. The plantations are located in the states of Johor, Sabah and Sarawak. During the year, the Group has replanted about 400 Ha of its oil palm plantation in Sabah and expects to replant another 1,200 Ha of old palms age 20 years and above over the next 3 years.
  • In FY16, KMLOONG achieved a throughput of 1.33 million MT of FFB inclusive of the external crop purchases, an increase of 13% from FY15. CPO and PK production increased to approximately 297,000 MT and 67,000 MT respectively in FY16, from 265,000 MT and 60,000 MT in FY15. The average OER and KER were marginally lower at 22.28% and 5.02% respectively as compared to 22.39% and 5.09% in FY2015.
Valuation:
  • In my opinion, in near term, the fair value of KMLOONG range from 3.3 to 3.5. Uncertainty risk of fair value is HIGH.
KMLOONG-FY16Q4-Football-Field
Going Forward:
  • KMLOONG is not only a good counter for trading, but it maintains high dividend yield too. I am not sure it can maintain high dividend yield if CPO prices continue at low range.
  • The CPO price moves in a cyclical manner. In a worst case scenario, KMLOONG, a net cash company with a low cost of production and an experienced management team would be able to withstand the turbulence and even take up expansion opportunities.
  • I believe that
    • CPO price will remain stable in 2016
  • In FY17, an increase in FFB production from young mature area is expected but in view of the potential effects being caused by El Nino, the FFB production will be flat or slightly lower, while the CPO production could be lower, comparing to the quantity achieved in FY16.
    KMLOONG FFB POP 23Jun2016
KMLOONG CPO POP 23Jun2016


  • I just accumulated KMLOONG recently.

  • At the time of writing, I owned shares of KMLOONG.

    KMLOONG (5027) - KMLOONG – Fundamental Analysis (23 Jun 2016)
    https://lcchong.wordpress.com/2016/06/23/kmloong-fundamental-analysis-23-jun-2016/