FIGURE 1: BOUSTEAD PLANTATIONS BERHAD LAST 5 YEARS SHARE PRICE TREND
**analysis based on 2018 annual report.
1. GENERAL INTRO: BOUSTEAD PLANTATIONS is one of the main oil palm plantations in Malaysia.
2. NOTABLE POINTS:
a. In 2018 report, main business segments include operation of oil palm plantations and milling operations. In addition, the Group is also involved in the provision of mill design and consultancy services.
b. The Group operates 46 oil palm estates in Peninsular Malaysia, Sabah and Sarawak with a total planted area of 75,000 hectares and total annual fresh fruit bunches (FFB) production of 966,134 MT.
c. The group also operates 9 palm oil mill that has a capacity of 405 MT FFB per hour and produced 211,847 MT CPO in 2018. The reported average oil extraction rates (OER) is 21.2%, which is higher than MPOB's national average of 19.9%.
d. The Group also currently operates one biogas plant that captures methane gas produced from milling processes.
e. The Group posted a loss before tax of RM51 million for the financial year 2018. This was primarily as a result of significantly lower palm product prices which impacted its bottom line. High start-up expenses for the acquisition of 11,579 hectares of land in Sabah and the rehabilitation and improvements for these estates also contributed to the deficit.
f. As part of the Group’s efforts to reduce labour dependency, maximise effciency and optimise productivity, it continued with the mechanisation of its operations, including utilised harvesting tools such as lightweight graphite poles for tall palms, mini tractor grabbers with bin systems, motorised wheelbarrows (for hilly areas) and smart fertiliser spreaders.
3. IS THIS COUNTER A STRONG GROWTH STOCK?
a. REVENUE RANGE (RM million): 584 million as reported in 2018 annual report, this is a medium revenue company.
b. SHARE PRICE: from 2015-2018, share price has been steady at around RM1.50 , then on decreasing trend to around RM0.70 by around January 2020
c. EARNING PER SHARE (EPS): earning per share in last 5 years fluctuated from -2.3 to 27.7 sen
d. FUTURE POTENTIAL/PROSPECTS: share price expect to be stable in the next few years
e. CAPITAL EXPENDITURE (CAPEX): spending on purchase of new fixed assets is RM 82.6 million, around 2% of total assets.
4. IS THIS A STRONG DIVIDEND STOCK?
a. DIVIDEND YIELD: in 2018 financial year, BOUSTEAD PLANTATIONS declared a dividend payout of 7 sen per share to shareholders, which amounts to a dividend yield of 9.72%.
b. CONSISTENCY: the dividend payout was consistent, dividend paid to shareholders in last five years (2014-2018) ranged from 6 to 19.5 sen per share, with a dividend yield range from 4.1 to 11.8 %.
c. DIVIDEND PAYOUT RATIO: N/A
5. IS THE MANAGEMENT PERFORMANCE GOOD?
a. RETURN ON EQUITY (ROE): in 2018 financial year, BOUSTEAD PLANTATIONS achieved a low return of shareholders’ equity, at -1.8%. Last five years ROE ranged from -1.8 to 21.7%.
b. COST-TO-INCOME RATIO: N/A
6. OTHER INDICATORS:
a. CASH FLOW: cash flow is positive, around RM 52.6 million, equivalent to RM 0.02 per share
b. SUPPORT BY INSTITUTIONAL INVESTORS: this counter is well supported by institutional investors, there are 18 institutional investors at top 30 major shareholders list, including EPF (4.76%), insurance companies and investment funds. Its major shareholders are Boustead Holdings Berhad (57.42%) and Lembaga Tabung Angkatan Tentera (12.1%).
Disclaimer: The content of the blog posts are for sharing purpose only. Readers are encouraged to carry out further research and analysis as well as follow up latest update information before making any investment decisions.