Palm Oil - Basic Information

When we look into the reports/news/website of palm oil plantation companies, we come across of terms like Fresh Fruit Bunch (FFB), Crude Palm Oil (CPO) and Palm Kernel (PK). They will even produce their monthly production statement for FFB, CPO and PK from the example below taken from IOI Corp website.

                                            Source: IOI Corp website

FFB, CPO and PK

                                          Source: FAO Documents

The photos above are self-explanatory of the terms FFB, CPO and PK. Basically, Palm Oil will be extracted from the mesocarp (pulp) while Palm Kernel oil will be extracted from the kernel. The difference between both types of oil is that Palm oil normally used as cooking oil, while, Palm kernel oil mainly used for soap manufacturing. The prices for both Palm Oil and Palm Kernel Oil are different as well, though they have direct correlation.

                                           Source: MPOB website

The point to note is that some companies do directly sell part of the FFB produced to third party instead of processing it themselves.

                                            Source: TDM AR2008

Hope this is informative for the readers.

Dissecting TDM Bhd

Earnings

TDM Bhd net profit still largely depended on Plantation Division which mean their earnings still depended much on the Crude Palm Oil (CPO) price and Fresh Fruit Bunch (FFB) production. Please do not mistaken the FFB with CPO though. I will post some palm oil information in my next post.

Shareholders

                                                Source: TDM AR2008

As you can see from the list above, almost 70% of the share been tightly held by the state government ,thus, explaining the low daily volume of this share.

For all the readers, this is not a buy or sell call. Please exercise your own judgment or seek advise from your investment adviser.
I shall not be held liable if your share become like this...

or like this

                                       
Enjoy your weekend! :)

KJMC and TDM Bhd

Anyone who pass through Kelana Jaya via LDP should notice that there is one community hospital situated at the side of the highway called Kelana Jaya Medical Centre (KJMC). As I am visiting my friend today, I found out that KJMC actually belongs to a Public Listed company called TDM Bhd.
A check on the website of the TDM Bhd shows that the company actually having core business in Plantation and Healthcare. A quick glance through its latest quarterly report reveals that the earning is impressive and a healthy Balance Sheet. Need some time to digest the reports and get more information on this company. Keep in view.

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.

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.