Recent Comments

  • Calvin Yeo { Hi Vic, be very careful with investment schemes which claims to have high returns. Those that promise 20%+ returns, such as Genneva Gold, Swisscash, Ecohouse all turn out to be ... } – Aug 24, 3:04 PM
  • Calvin Yeo { Hi SY, yes there might be a little bit of concern there. However, the leases are not short, so rental should be relatively stable. Unless the offices are rented out ... } – Aug 24, 3:00 PM
  • Calvin Yeo { Hi SY, that's correct. It will just be RA account and Medisave. } – Aug 24, 2:58 PM
  • Vic { Hi Calvin Not sure if this is the right platform to raise this. I recently went to a seminar talking about Agarwood investments. Returns are fantastic. Annual returns at 20%. ... } – Aug 15, 11:11 AM
  • SY { Hi Calvin, Do you feel that there is a high concentration of tenants, which is risky ? The REIT’s top five tenants collectively accounted for 98.9% of its gross rental ... } – Aug 13, 7:05 AM
  • SY { Hi Calvin, At age 55, OA and SA will be closed and all the monies in it transferred to RA ? } – Aug 13, 6:42 AM
  • Older »

Snapshot of Palm Oil Sector October 2012

11.26.2012 · Posted in Dividend Stocks, Malaysia, Singapore

I have been getting some comments and questions with regards to my recent Golden Agri pickup. There’s no real right answer as to which one is the best, it’s really a matter of opinion and preference. This is a short post with an extract from a CIMB CPO research report.


img CIMB CPO Research Oct 2012

CPO Planters Table Extract from CIMB Research (Click on the picture to enlarge)


Valuations, Income and Plantation Profile

For example, if you are looking for value, you should be focusing on low valuation ratios. If you are looking for stable income, then you should pick those with reasonable dividend yield and that at least 30% of the portfolio is prime so that it is able to give out income on a steady basis.

If you are looking for high growth, the largest % of portfolio being immature and young should be ideal. Also look out for those with large unplanted land bank as they should be able to plant those without resorting to acquisitions. Bear in mind though planting also requires significant amount of capex, so they may not be able to dividend much cash due to the planting capex.


Downstream Capability

Another factor which should not be neglected is the downstream capability of palm oil companies. Not all primary producers have downstream capabilities, so they are not able extract value from refining of palm oil. With regards to Golden Agri, 30% of the revenue for YTD Sep 2012  comes from refined palm oil products, while CPO makes up 40% of the revenue. So it is definitely significant and branding too is very important here. For example, Golden Agri’s cooking oil brands Filma and Kunci Mas are market leaders in Indonesia.


Other factors include Malaysian CPO export tax policy risks. For more information on this, see Star Report


For further reading, you may be interested in:

My Singapore Stock Portfolio Mid November 2012

Palm Oil Plantation Stocks Tree Maturity Profiles

Listing of Felda Global Ventures Bhd

Leave a Reply

+ 7 = twelve

Switch to our mobile site