Good Sign for KFima

When the largest shareholder accumulating the share, it is normally presume that the share is undervalue.
What do you think?

Kumpulan Fima Bhd and Fima Corporation Bhd

                                             Source: Kumpulan Fima AR2009

Fima Corp is 60.9% owned by Kumpulan Fima Bhd ( refer above taken from Kfima AR2009).

Fima Corp meanwhile 100% owned Percetakan Keselamatan Nasional Sdn Bhd, Security Printers Sdn Bhd
and 80% Nunukan Jaya Lestari. Hence, owning Fima Corp will have more direct exposure to those companies while owning Kumpulan Fima will have exposure to those companies plus bulking and food division.

                                             Source: Fimacorp AR2009

Hope this information give a clear relationship between both companies to all readers.

Planters Flying today

A look on KLSE today shows that Plantation sector have a good day. Unfortunately, Kumpulan Fima is not a pure plantation play but higher palm oil price should contribute significantly to their bottomline.
Some comparison on plantation landbank of plantation giant, IOI Corp and Kumpulan Fima.
IOI Corp - 251,000Hectares
Kumpulan Fima - 50000acres (approximately 20200Hectares)
Kumpulan Fima will need to increase their landbank significantly beside increasing their yield and efficiency
to get investors aware of their involvement in palm oil plantation.
Accumulate another 5000 units averaging 0.895 for my simulation portfolio today.

Know How or Know Who

Investing in company which have the bulk of earnings contributed directly or indirectly by the Government normally being labelled as 'politically-linked' company by the investing communities. Long term concession contract, monopoly, favourable incentives are some of the features normally associated with those companies. The advantages of having investing in those company definitely would be having the most reliable customer or business that is fairly recession proof. The downside of investing in those companies obviously would be changes of the guidelines or changing of the government altogether.
Some companies would try to shake off those unfair labelling by diversifying to other businesses while some trying to proof their abilities through expanding to other countries.
Hence, as an investor, we should look into the existing businesses and the future plan of those companies to minimise the downside risk while enjoying those advantages.
Two companies posted in this blog, Kumpulan Fima and Protasco might be unfairly labelled by some investors with Kumpulan Fima through their manufacturing of securities documents and Protasco through their long term road maintenance concessions.
From my opinion, Kumpulan Fima have done very well to proof their ability by diversifying to palm oil plantation which contributing significantly to their revenue and bottomline.
Protasco, meanwhile, having good management at helm with many other well planned businesses certainly prove to certain extent .Their ability to penetrate into Middle East is definitely a big big plus!

Kfima - Plantation Division

As plantation division is one of the fastest growing contributor to Kfima bottomline , it will be key to future earning of Kfima.
A check on the Kfima website reveal the following information of the plantation division,

Ladang Ayer Baloi/Machap - Pineapple and Palm Oil Cultivation (2200acres)
Ladang Kota Tinggi - Oil Palm Cultivation (1065acres)
Modern Farming Project -Pineapple Cultivation (300acres)
Fima TLP-Feedlot Sdn Bhd - Cattle Farming
PT Nunukan Jaya Lestari - Oil Palm Cultivation and FFB processing (49,356acres)

With the information, it is clear that future earning contribution from the plantation division will be much dictated by Palm Oil.

Review of KFima Q3 2010 Result - 2

According to the report, the better performance for 9 months period was due to manufacturing and plantation division and higher share of profit from associate company as well as one off recognition of capital gain of RM5.25 mil from the disposal of Banding Resorts.
Please note the impressive profit registered by Manufacturing and Plantation division.

Review of KFima Q3 2010 Result - 1

Current Price (24/2/2010) : RM0.86
NTA: RM1.48
Cash balances: 110mil
Total borrowings: 28mil + 47 mil = 75mil

3rd Quarter EPS: 6.88sen
Total EPS for 3 Quarters 2010: 17.65 sen
Assuming Fourth Quarter EPS to be 6 sen, PE would be 86/17.65+6 = 3.6.

Kumpulan Fima Bhd

Kumpulan Fima Bhd
Investment Holding company.

Core Business:
1. Manufacturing Division - Production and trading of security and confidential documents.
2. Plantation Divison - approximately 52,475 acres, of oil palm and pineapple plantation.
3. Food Division - canning of fish and pineapple as well as packaging of food products.
4. Bulking Division - bulk handling and storage of liquid and semi liquid products, as well as
transportation and forwarding services.
5. Property Investment - derived from rental of office block Bukit Damansara, warehouse in
Bangi and factory building in Pekan Nanas.
6. Trading Division - international trading and military aviation agencies.

Selected for Forbes Asia 'Best Under a Billion' in 2009.