not vested
CAB CAKARAN BHD
Current stock price: RM1.07
POULTRY company CAB Cakaran Bhd may not appear exciting on the surface.
At its price, the stock is trading at a trailing price earnings (PE) ratio of 12 times and a 2015 PE of 10 times.
Nonetheless, all this is based on earnings from its existing core business of integrated poultry farming and processing.
It has 10 breeder farms and 140 broiler farms throughout Peninsular Malaysia, with a capacity of 3.6 million birds per month currently
However, this is set to grow by some 20% this year, as it recognises contributions from its new Singapore-based subsidiary Tong Huat Poultry Processing Factory Pte Ltd.
As of FY14, CAB Cakaran has already achieved revenue of RM672mil. It will likely hit RM900mil this year, with Tong Huat’s contribution.
The company will continue to buy up chicken farms to increase its capacity every year.
Secondly although on a longer term basis, CAB Cakaran has potential for a new revenue stream from its [b]biomass power generation business.[/b] In March, it signed an MoU with New Chemical Trading Co Ltd from Japan and Seri Kedah Corp Sdn Bhd to venture into the biomass project.
It will incinerate chicken droppings for the biomass project and also produce fertiliser and calcium as a by-product.
Under this MoU, New Chemical Trading and Seri Kedah would set up a joint-venture company for the licensing of specific technology and know-how related to biomass power generation.
The joint venture parties are now looking in the northern region for a 30 acre to set up the facility.
Lastly, CAB Cakaran has 227 acres of investment properties worth RM64.81mil as of Sept 31, 2014, mostly located in Bukit Metajam and Penang.
Out of the 52 parcels of land measuring 227 acres in Penang, Kedah, Selangor and Perak, some 59% of the land are empty lots. The other 41% are plantation land, vegetable farms, apartment and building lots which are now being rented out.
It recently also purchased 28 acres of land in Kedah and 168 acres in Johor. Some are convertible for development.
Source: The Star