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Sector                 : Plantation
Sub Sector         : Plantation

With the current benchmark price (July 2020 CPO Futures contact) had plunge below RM 2000 / MT strong support these week. Let us take a look into Palm Oil Plantation public listed companies in Malaysia. Not surprising as the world second largest oil palm producer just behind Indonesia there are well over 40 palm oil plantation companies list on Bursa Malaysia. We would do comparison for top 30 companies in term of palm oil related revenue for the year 2018. These comparison would split into 4 parts.
Part I – Top 10 palm oil companies in term of 2018 revenue
Part II –11 – 20 palm oil companies in term of 2018 revenue
Part III – 21 – 30 palm oil companies in term of 2018 revenue
Part IV – Summary of comparison based on 2018
Top 10 palm oil companies listed in Bursa base on 2018 revenue are:


Competitiveness

Market shares is an importance indicator to determine the competitiveness of the company. Total revenue make from palm oil plantation and refinery for the year 2018 is RM 60,890,571,870.00.

COMPANY
REVENUE (OIL PALM) 2018 (RM)
MARKET SHARE (%)
SIMEPLT (5285)
20,521,806,000
33.70
FGV (5222)
8,547,271,000
14.04
BKAWAN (1899)
7,825,894,000
12.85
KLK (2445)
6,250,774,000
10.27
SOP (5126)
3,588,490,000
5.89
BLDPLNT (5069)
2,183,942,112
3.59
GENP (2291)
1,772,766,000
2.91
UTDPLT (2089)
1,171,593,000
1.92
KMLOONG (5027)
1,075,331,845
1.77
TSH (9059)
769,461,000
1.26
From the table above, Top 5 companies had 76.75 % of the total market share for 2018.

Dependency
Many palm oil companies had other investment such as properties development, logistic, sugar, manufacturing and etc which is not subjected to the price change on the palm oil. Table below shown the dependency of palm oil for each company
COMPANY
PERCENTAGE OF REVENUE FROM PALM OIL (%)
SIMEPLT (5285)
98.14
FGV (5222)
63.74
BKAWAN (1899)
41.29
KLK (2445)
42.08
SOP (5126)
99.57
BLDPLNT (5069)
99.99
GENP (2291)
93.17
UTDPLT (2089)
99.87
KMLOONG (5027)
100.00
TSH (9059)
84.88
From the table FGV, BKAWAN, KLK had less than 80% of their revenue from palm oil. Other businesses which they are involve;

1) FGV – Sugar Sector, Logistic and Support Sector
2) BKAWAN – Manufacturing , Property Development
3) KLK – Manufacturing, Property Development

Operational

For operational, operating income of the companies had been review. Operating income determine how much the companies’ revenue had turn into profit after reduction cost of operating expense.

Besides operating income, operatingmargin ratio is also calculated. Companies with higher operating margin ratio have more probability to survive in today financial crisis.
COMPANY
2018 OPERATING INCOME (RM)
2018 OPERATING MARGIN RATIO
SIMEPLT (5285)
3,206,847,000
15.63
FGV (5222)
(770,283,000)
-9.01
BKAWAN (1899)
870,130,000
11.12
KLK (2445)
838,908,000
10.84
SOP (5126)
165,048,000
4.60
BLDPLNT (5069)
(48,487,474)
-2.22
GENP (2291)
401,131,000
22.63
UTDPLT (2089)
468,724,000
35.95
KMLOONG (5027)
157,208,215
14.62
TSH (9059)
167,967,000
21.83
FGV and BLDPLNT would be disqualified to analyst further because they having negative operation income. In general oil palm business had high operating margin in 2018 as most of the companies had over 10 % of operating margin, UTDPLNT even had 35.95 % of operating margin.
Sustainability

For the sustainability of the business, debt of the companies is being review. There are two criteria to look at interest coverage ratio , which is used to determine how easy the companies able to pay off the interest of outstanding debt and debt ratio.
COMPANY
2018 INTEREST COVERAGE RATIO
2018 DEBT RATIO
SIMEPLT (5285)
10.93
0.45
FGV (5222)
-4.07
0.65
BKAWAN (1899)
4.46
0.36
KLK (2445)
4.80
0.36
SOP (5126)
2.65
0.45
BLDPLNT (5069)
-233.30
0.09
GENP (2291)
3.66
0.45
UTDPLT (2089)
18748.96
0.11
KMLOONG (5027)
111.76
0.20
TSH (9059)
3.81
0.53
UTDPLT and KMLOONG had low financial cost.



Summary of Industry Comparison

https://ivkls.blogspot.com/2020/05/industry-comparison-palm-oil-part-1.html

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