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Dear Friends

Last post we mentioned FGV Assets are Far Superior Than Wilmar

Now let us do a Simple Calculation of FGV Intrinsic Value

Everything in the Supermerket has a Value

To see how much you pay for the meat, fish, vegetables, nuts, rice, flour or all other foods there is a Weighing Scale

See

1,710 Weighing Machine Photos and Premium High Res Pictures - Getty Images

 

Weighing Scale High Resolution Stock Photography and Images - Alamy

 

 

 

 

 

SO IS FGV

Now let us see its latest Qtr Result

 

SUMMARY OF KEY FINANCIAL INFORMATION
31 Dec 2020

 
INDIVIDUAL PERIOD
CUMULATIVE PERIOD
CURRENT YEAR QUARTER
PRECEDING YEAR
CORRESPONDING
QUARTER
CURRENT YEAR TO DATE
PRECEDING YEAR
CORRESPONDING
PERIOD
31 Dec 2020
31 Dec 2019
31 Dec 2020
31 Dec 2019
$$'000
$$'000
$$'000
$$'000
1 Revenue
4,008,806
3,154,349
14,075,712
13,259,012
2 Profit/(loss) before tax
315,157
51,224
337,195
-345,225
3 Profit/(loss) for the period
188,066
49,142
138,778
-371,156
4 Profit/(loss) attributable to ordinary equity holders of the parent
134,927
71,806
150,020
-246,174
5 Basic earnings/(loss) per share (Subunit)
3.70
2.00
4.10
-6.70
6 Proposed/Declared dividend per share (Subunit)
0.03
0.00
0.03
0.00
   
AS AT END OF CURRENT QUARTER
AS AT PRECEDING FINANCIAL YEAR END
7 Net assets per share attributable to ordinary equity holders of the parent ($$)
1.1700
1.1400
 

 

From the above we see the NAV (Net Asset Value) of FGV is Rm1.17

But that is based on lands not revalued or updated for many decades

And the Book Value per acre only Rm3,150 per acre

 

Now we know by now FGV total top 10 Assets

1,013,317 ACRES

 

Recent land sales in Malaysia

1) KUB sold Sabah Oil palm lands to Tradewind Rm26,000 per acre

2) Scientex bought lands in Tasek Gelugor (Penang mainland) Rm718,804 per acre

3) Syed Moktar sold Senai lands for Rm2 Million per acre

So we if we take the lowest recorded Lands sales of Sabah which is Rm26,000 per acre

Then we mutiply

1,013,317 acres  by Rm26,000

= Rm26,346,242,000 (About Rm26.3 BILLIONS)

What is the Cash Value?

The formula is this

Rm26,346,242,000 divides by Rm134,927,000 then multiply by 3.70 sen

= Rm7.22 CASH

So the Revised NAV of FGV should be Rm7.20

Of course if there is a liquidation sale we should take off 40%

So Rm7.22 x .6 = Rm4.33

Is Rm4.33 the lowest intrinsic value of Fgv?

Now many of Fgv lands are located in Prime Areas and Cities & Towns have grown and expanded to reach them by now

Can we take Penang land value of Rm718,804 per acre (or about Rm16.50 psf based on 1 acre of 43,560 sq ft)?

If so

Then Multiply 1013317 by 718,804 =

 

Rm728,376,312,868 (About Rm728 BILLIONS)

 

And how Much Cash Value

Again same fomula

Rm728,376,312,868 divides by Rm134,927,000 multiply by 3.70 sen

= Rm19.97 Cash per Share

And if we take off 40% Discount for Quick Sale

= Rm11.98 Per share intrinsic value

 

So the Intrinsic value of FGV should range between Rm4.33 to Rm11.98

At Rm1.30 Takeover price by Felda is deemed too undervalue & looks totally unfair to share holders

No wonder the BOD (Board of Directors) in their conscience told share holders to reject the privatisation Offer of Rm1.30

Since MGO has lapsed we will see by August 3rd 2021 when Felda will have to either forgo privatisation or raise MGO price to a more fairer value

In time past

Karambunai offered to take private at 55 sen but was rejected. The final offer of 11 sen (Up 100%) was happiy accepted

Further back was KAF privatisation price of Rm1.30 was also rejected and then KAF revised offer up by 100% to Rm2.60 which was accepted

Will FGV revise Offer Price higher?

If higher then by how much?

Now that the wind of fortune is blowing favourably due to Cpo, Sugar & Rubber at all time high it behoves FGV to counter offer with a better price for a Win - Win Settlement

 

Kindest Regards

Calvin Tan Research

 

This is not a buy or sell call. This is an Ongoing Case Study of Malaysia's Most UNDERVALUE Valuable Plantation Stock ever

 

PLEASE NOTE: After Posting we received feed back comments below

 

lksiam As per 30/3/21, "With FELDA holding 80.99% and the Pahang government controlling 5%, FGV’s free float is now about 14%"

Be sure you are clear of what FELDA with 81% can do even though privatisation attempt failed. For example, they can pass any resolution (good or bad) without obstruction.

For CalvinTan or any other so called sifu/analyst, trust 50% of their words is enough. haha... Do your own homework and know your own position e.g holding power.
14/04/2021 8:14 AM

 

Yes Felda now controls about 80% of FGV shares. But Felda cannot do a Compulsory privatisation as it failed to secure 90% or more of FGV shares and be delisted from KLSE

As such Felda is subjected to all the Rules & Regulations of Bursa.

Every major decision will still need to notify Bursa as well as share holders

So it is better to stay listed. If Felda wants to take it private then it must Make a Fair & Reasonable Final Offer

 

 

emsvsi Cover Story: Questions over FELDA’s plans for FGV
Jose Barrock | The Edge Malaysia
December 24, 2020 14:00 pm +08

"For instance, FGV, via a land lease agreement (LLA) with FELDA, controls and operates 350,733ha of plantations owned by FELDA, for a 99-year tenure starting from Nov 1, 2011. FGV on its own has 88,497ha of plantation land and 68 palm oil mills, parked under FGV Palm Industries Sdn Bhd."

Full article: https://www.theedgemarkets.com/article/cover-story-questions-over-feld..." style="text-decoration-line: none; color: rgb(0, 102, 170);" target="_blank" rel="nofollow">https://www.theedgemarkets.com/article/cover-story-questions-over-feld...
14/04/2021 9:59 AM

 

Yes, Felda has leased Lands to FGV for a period of 99 years. In Indonesia where Wilmar operates land lease is even shorter from 60 years and less.

FGV has stated that it has added Value to the Lands by Replanting old Oil Palm trees over the years at Substantial Costs Plus it has built 68 Millions worth Rm60 millions each (Total Rm4.08 Billions worth

FGV has its own Lands about 88,497 hectares or 218,676 acres

Now if we take Rm500,000 per acre cost or Rm11.47 per sq ft

It will be

88,497 x Rm500,000 

= Rm44,248,500,000 (About Rm44.2 Billions)

 

To get the Cash Value

Rm44,248,500,00

divides by Rm134,927,000 then multiply by 3.70 sen

 

= Rm12.13 Per Share

 

So no matter how you calculate FGV still got high instrinsic value


https://klse.i3investor.com/blogs/www.eaglevisioninvest.com/2021-04-14-story-h1563307511-WHAT_IS_THE_INTRINSIC_VALUE_OF_FGV_FELDA_GLOBAL_VENTURE_Calvin_Tan_Rese.jsp

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