MY NEW TARGET!

We came back with an optimistic view on Sarawak Plantation (SWKPLNT)after a meeting with its management. We reckon that the company is now apotential turnaround story that could be worth following. The main catalystwill be the significant jump in the group's FFB yield in the next two years fromits current low base of 13.0mt/ha to 19.8mt/ha in FY13E. The company'svaluation is also extremely attractive as it currently trades at only 9.0xFY12E PER, a PEG of 0.65x, and a EV/planted hectare of c.RM26,000 (all of theseare lower than all planters under our coverage). The additional sweetener will beits superior FY12E-FY13E dividend yield of 5.5%-6.9%. We estimate FY12-13E netprofit to be at RM94m-RM116m, representing a strong 14%-24% YoY growth. Wevalue SWKPLNT at RM3.70, pegging its 3-year average Fwd. PER of 11.0x to ourFY12E EPS of 33.45 sen.

Expects a strongturnaround. SWKPLNT elected a new Managing Director in Mar-2011 and a newChief Operating Officer in Oct-2011. These changes in management saw animpressive earnings growth of 139% YoY to RM82m in FY2011. The good result wasmainly attributed to a successful enhancement of the company's Fresh Fruit Bunch(FFB) yield by 15% to 13.0 mt/ha and the Oil Extraction Rate (OER) by 42pp to21.03%. We believe the company's turnaround is still at its very early stage,judging from the group's low base FFB yield at 13.0 mt/ha. In 2013E, the FFByield should improve to the industry level of c.20.0mt/ha, leading to a 40%surge in the FFB production to 440,488 mt (from 314,758 mt in FY11).

Deeply undervalued.Trading at only 9.0x FY12E PER, a PEG of 0.65x, and a EV/planted hectare ofc.RM26,000, the market has clearly under-appreciated this stock. SWKPLNT'sFY12E PER of 9.0x is at least 32% lower than other mid-cap pure planters whichtrades between 13.3x-15.6x their FY12E PER. Its EV/planted ha. of c.RM26,000 isalso significantly lower than Sarawak Oil Palm's c.RM46,000 and the otherplanters' range of RM70,000-RM73,000.

Aggressive expansionin FY12E. We expect the company to expand its planted area by 9,200 ha(+32% YoY) to 38,504 ha in FY12E. Hence, its immature/planted area ratio willincrease from 12% to 36% by end-FY12E, on par with the bigger-cap planters suchas GENP and IJMP.

Highest dividendyield among planters. We expect generous FY12E-FY13E net dividends of16.7-20.7 sen, representing net dividend yields of 5.5%-6.9%. This is higherthan other planters' net dividend yields, which ranges from 1.3% to 4.4%. Wehave assumed a payout ratio of 50%, slightly lower than the group's 5-yearhistorical payout range of 55%-60% due to its need to conserve some cash to developits land bank.

Good earningsprospect. We expect FY12E-FY13E earnings of RM94m-RM116m, representing astrong growth of 14%-24%. FY12E key earnings driver will be the 23% surge YoYin the FFB roduction to 386,865 mt as the FFB yield improved to 16.8mt/ha (from13.0mt/ha). Note  that we have assumedaverage CPO prices of RM3,100 per mt  forboth FY12E and FY13E, hence its earnings could surprise on the upside shouldCPO prices turn out to be better than expected.

Source: Kenanga

PwC Assessment

This monday I went to Pwc for assessment test. When i reached there, i was almost fainted as we are assigned to sit with those strangers. I can see some are confident, some are nervous...

As for me, I have a Chinese educated background. Yet, when i went there, I have been making friends with others. They were from Taylors, Sunways, Local uni, Australia and so on.

I am glad to be mixed with them with English as conversation english. I was not proactive enough. Need to improve for next time. PwC gives packages of RM2770 for normal degrees and RM2920 for ACCA graduates. If I am shortlisted for interview, should I request for further more ? =)

The assessment needs to do 20question in 20 minutes. I just managed to do 13 to 14 question. God bless. They dun even tell us hw many times left. I just prayed hard i could enter PwC. 

They Had Come

Favco and Fitters have come.
Favco breaks a new high and Fitters reach 0.79
All my analysis have been proven.
Great to see portfolio rises.
It is a motivation for my path as well as a reward in my portfolio.
What to do next?
Analysis Delloyd and Swkplant tomorrow.

What do these stocks tell u? =)

Today, 11/4/2012 should be a good day for me. Last week i just entered CEPAT. Yet, I can see such a volume today, breakout? Need tomorrow as a confirmation.

Favco is the stock I most like. Seems contra players after announcing the contract gained had left. Thus, it would be time for my long term holding stock to pull to 1.5 then 1.7. PE now is 5++, if i only sell at PE10, the price would be RM2.70. It is undervalued definitely.

Lastly, Fitters is the one testing me along the way this year. Once i bought, it is dropping, dropping ,dropping! Is there any insider bad news causing the fall? I am making paper loss on this counter despite how good its performance of financial result is. However, I believed and noticed there are big sharks inside. Hehe

Thats all the total of my portfolio for the current moment. 20% target for this year.