IJM Plantations

IJM Plantations

Postby winston » Wed Nov 05, 2014 7:48 am

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Affin Hwang Research maintains Add for IJM Plantations

KUALA LUMPUR: Affin Hwang Investment Research is maintaining its Add rating for IJM Plantations but lowered the target price to RM3.63 from RM3.71.

It said on Tuesday the conversion of the expiring warrants in September 2014 was slightly EPS-dilutive.

“We expect IJM Plantaions’ strong fresh fruit bunches production growth prospects to help support the share price.

“We expect total mature area to almost double as large immature areas in Indonesia reach maturity. Coupled with relatively high yields, we see a superior FFB-production growth outlook in the next few years, driving IJM Plantaions’ FY16-17E price-to-earnings ratios (PERs) significantly lower,” it said.

Affin Hwang Research said the crude palm oil (CPO) for third month delivery had rebounded from the year’s low of RM1,929 by 20% to RM2,306.

Even though export growth remains lacklustre, FFB yields may have peaked early in August and have been trending lower.

The government’s decision to extend CPO export duties until December and implement (in stages) the B7 biodiesel mandate to cut inventory levels as well as the more upbeat price expectations of key planters and forecasters have further boosted sentiment.

IJM Plantations’ share price has also rebounded by an impressive 12% from the low of RM3.22 two weeks ago.

“A key attraction of IJM Plantations is its superior FFB-production growth in the next few years. Estimated average palm ages of 13.4 years and 3.5 years for its Sabah and Indonesian plantations give a young blended average of 8.0 years.

“With the large immature areas in Indonesia, we expect the total mature area for the group to almost double to approximately 53,000 ha in three years from 27,802 ha currently.

“Coupled with relatively high yields in Indonesia, we now expect group FFB production to grow by 17% in FY15E, 20% in FY16E and 12% in FY17E (up from around 730,000 tonnes in FY14),” it said.

Affin Hwang Research said trimmed its FFB-production forecasts for FY15 and FY17 by 2.2% and 1.1%, respectively, and raised its FY16 by 1.7%.

By FY18, it expects FFB production from IJM Plantations’ Indonesian plantations to exceed that from the Sabah estates.

It also said the group has another 4,000 ha awaiting permit and certification in Indonesia.

“Management has no plans for significant new land acquisitions. Instead, the focus will be on extracting maximum yields from new areas planted in Indonesia. Replanting of old areas in Sabah should continue,” it added.

Source: The Star
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Re: IJM Plantations

Postby winston » Sun Aug 12, 2018 8:05 am

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Aug 7, 2018

IJM Plantations up 9.78% after reported as takeover target

by Samantha Ho

KUALA LUMPUR (Aug 7): IJM Plantations Bhd gained as much as 22 sen or 9.78% to a six-month high of RM2.47 in early trade today, after a news report cited the company as a takeover target.

As at 10.41am, the stock had pared gains to trade at RM2.40, after 148,000 shares were traded.

According to a report by a local business daily today, suitors for IJM Plantations, valued at a time when demand for mature plantations in Sabah is on the rise, include IOI Corp Bhd and Hap Seng Plantations Holdings Bhd.

Citing sources, the report named IOI as the leading candidate due to its financial resources and the East Malaysian location of its existing plantations.

It also said current low prices of crude palm oil are viewed as a conducive environment for acquisitions.

Crude palm oil last closed at RM2,206 yesterday, according to data from the Malaysian Palm Oil Council.

Source: The Edge

http://www.theedgemarkets.com/article/i ... ver-target
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Re: IJM Plantations

Postby winston » Sun Aug 12, 2018 8:15 am

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June 15, 2018

IJM Plantations (IJMP MK)
Remain Neutral; Expect FFB Production To Pick Up In 2Q-3QFY19

We maintain HOLD on IJMP and expect share price to continue to trade sideways in the near term as there is no strong catalyst to push up the share price.

We maintain FFB production growth of 8.9% yoy for FY19 despite the lower yoy growth in 2MFY19 as we anticipate a pick-up in FFB production in 2Q-3QFY19.

1QFY19 earnings are likely to be weaker yoy due to low FFB production and weak CPO
prices.

Target price: RM2.33. Entry price: RM2.10.


VALUATION/RECOMMENDATION

Maintain HOLD and target price of RM2.33. Our target price of RM2.33 is based on FY20F PE 19x or -1SD of 5-year mean, in line with sector peers’ valuation (ascribed PE of -1SD of 5-year mean) due to the weak CPO price outlook in 2018.

We reckon that current share price has priced in the earnings weakness, but we believe this is not the right time to buy in as we understand that the earnings stability might only come in FY20-21 when FFB yield reaches 20 tonne/ha. Entry price: RM2.10.

Downside risk. The previous cycle that saw a sharp decline in share price was in 2008 where share price slumped 183% in five months due to earnings weakness (-40% yoy), while forward PE weakened to -1.5SD of the 5-year mean level. Assuming share price retraces to -1.5SD of the 5-year mean of 11x, fair value would be at RM1.35/share.

Source: UOBKH

https://research.uobkayhian.com/content ... 9c8890d096
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Re: IJM Plantations

Postby winston » Sun Aug 12, 2018 8:26 am

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Acquisition of IJM Plantations seen at RM2.1bil to RM3.1bil

9 Aug 2018

PETALING JAYA: The potential acquisition of IJM Plantations Bhd by either IOI Corp Bhd
or Hap Seng Plantations Holdings Bhd will springboard the acquirer’s planted land bank size by leaps and bounds, PublicInvest Research said in a report.

If the acquisition were to take place, the offer price for IJM Plantations could be in the range of RM2.1bil to RM3.1bil, it said.

“The targeted company, which has a market capitalisation of RM2bil, is easier for IOI Corp to swallow than Hap Seng Plantations,” the research report said.

“Assuming IJM Plantation acquisition materialises, it could propel IOI Corp’s land size by 35% to 235,377ha.

“While for Hap Seng, the potential acquisition could nearly triple its planted land bank to 97,084ha, from 36,103ha,” the research house said.

It noted that IOI Corp has a strong cash pile of RM3.7bil with a low net gearing level of 25.3% following the disposal of 70% stake in refinery arm, IOI Loders to Bunge, last year.

Hap Seng, however, has smaller coffers with a cash level of RM65mil but zero gearing.

“Both suitors have strong presence in Sabah, and could see the synergy in the Sabah brownfield plantation asset,” it said.

IJM Plantations has 60,981ha of plantation land in Sabah, Kalimantan and Sumatra.

PublicInvest Research said IJM Plantation major shareholders’ intention to dispose of its 55% stake was because the shareholders believed the plantation business has not been valued “fairly”.

“We think that the potential acquisition is unlikely to be earnings accretive for both suitors in the near term, given the current poor crude palm oil price performance.

“Pending further updates on the potential acquisition, we maintain our target price of RM4.65 with a ‘neutral’ call,” the research house said.

“Assuming we attach an enterprise value (EV) to planted area of RM40,000 for its 35,978ha planted area in Indonesia and EV/planted area of RM70,000 for its 25,002ha in Malaysia, it is worth a whopping deal of RM3.1bil, which is 47% higher than the recent closing market capitalisation of RM2.1bil,” it added.

However, the brokerage noted that given the current weak crude palm oil price sentiment, there could be a significant discount depending on the bargaining power for IJM Corp and the interested parties.

IJM Plantations is the seventh largest Malaysian plantation company with a total planted area of 60,981ha in Sabah and Indonesia. It is 55%-owned by IJM Corp Bhd, another listed entity.

PublicInvest Research noted that the company has a solid balance sheet with a low net gearing level of 31.8% while its net book value stood at RM1.6bil.

Source: The Star

https://www.thestar.com.my/business/bus ... LIUqPOj.99
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Re: IJM Plantations

Postby winston » Sun Aug 12, 2018 8:26 am

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Acquisition of IJM Plantations seen at RM2.1bil to RM3.1bil

9 Aug 2018

PETALING JAYA: The potential acquisition of IJM Plantations Bhd by either IOI Corp Bhd
or Hap Seng Plantations Holdings Bhd will springboard the acquirer’s planted land bank size by leaps and bounds, PublicInvest Research said in a report.

If the acquisition were to take place, the offer price for IJM Plantations could be in the range of RM2.1bil to RM3.1bil, it said.

“The targeted company, which has a market capitalisation of RM2bil, is easier for IOI Corp to swallow than Hap Seng Plantations,” the research report said.

“Assuming IJM Plantation acquisition materialises, it could propel IOI Corp’s land size by 35% to 235,377ha.

“While for Hap Seng, the potential acquisition could nearly triple its planted land bank to 97,084ha, from 36,103ha,” the research house said.

It noted that IOI Corp has a strong cash pile of RM3.7bil with a low net gearing level of 25.3% following the disposal of 70% stake in refinery arm, IOI Loders to Bunge, last year.

Hap Seng, however, has smaller coffers with a cash level of RM65mil but zero gearing.

“Both suitors have strong presence in Sabah, and could see the synergy in the Sabah brownfield plantation asset,” it said.

IJM Plantations has 60,981ha of plantation land in Sabah, Kalimantan and Sumatra.

PublicInvest Research said IJM Plantation major shareholders’ intention to dispose of its 55% stake was because the shareholders believed the plantation business has not been valued “fairly”.

“We think that the potential acquisition is unlikely to be earnings accretive for both suitors in the near term, given the current poor crude palm oil price performance.

“Pending further updates on the potential acquisition, we maintain our target price of RM4.65 with a ‘neutral’ call,” the research house said.

“Assuming we attach an enterprise value (EV) to planted area of RM40,000 for its 35,978ha planted area in Indonesia and EV/planted area of RM70,000 for its 25,002ha in Malaysia, it is worth a whopping deal of RM3.1bil, which is 47% higher than the recent closing market capitalisation of RM2.1bil,” it added.

However, the brokerage noted that given the current weak crude palm oil price sentiment, there could be a significant discount depending on the bargaining power for IJM Corp and the interested parties.

IJM Plantations is the seventh largest Malaysian plantation company with a total planted area of 60,981ha in Sabah and Indonesia. It is 55%-owned by IJM Corp Bhd, another listed entity.

PublicInvest Research noted that the company has a solid balance sheet with a low net gearing level of 31.8% while its net book value stood at RM1.6bil.

Source: The Star

https://www.thestar.com.my/business/bus ... LIUqPOj.99
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Re: IJM Plantations

Postby winston » Wed Jan 08, 2020 9:58 am

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IJM Plantations (IJMP MK)
Best Proxy To CPO Price Rally


We reiterate our BUY despite the share price surge of 62% in 2019 and we are expecting another 30% upside in the next 12 months.

Its share price performance is likely to be driven by strong earnings growth in FY21 on the back of better selling prices and production growth from its Indonesia operations.

As IJMP is a pure upstream producer, its earnings are highly leveraged to CPO prices, ie every RM100/tonne rise in CPO ASP will increase EPS by 15%.

Maintain BUY. Target price: RM2.90.

Source: UOBKH

https://research.uobkayhian.com/content ... 57da7b4dff
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Re: IJM Plantations

Postby winston » Wed Feb 26, 2020 9:54 am

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IJM Plantations (IJMP MK)
3QFY20: Beyond Expectations


IJMP reported a core net profit of RM30.2m, with 3QFY20 earnings coming in beyond our and consensus full-year assumptions.

The strong set of results was mainly supported by higher sales volume and better-than-peers selling prices.

Further to that, we noticed that its Indonesian operations had purchased more external FFB, which led to higher utilisation rate.

Maintain BUY. Target price: RM2.90.

Source: UOBKH
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Re: IJM Plantations

Postby winston » Thu Feb 27, 2020 8:45 am

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Better-than-expected

IJMP’s core net profit of RM28.2mm in 3QFY20 (vs. core net losses of RM1.8m in 2QFY20 and RM23.9m SPLY) took 9MFY20 core net profit to RM21.4m (vs. a core net loss of RM18.6m in 9MFY19).

The results beat expectations, accounting for 98.7-99.7% of consensus and our full-year estimates, due mainly lower-than-expected finance cost.

We raise our FY20-22 core net profit forecasts by75.2%, 26.5% and 31.2%, mainly to account for slightly lower CPO production cost and lower finance cost assumptions.

Post upward revision to our core net profit forecasts, we upgrade our rating on IJMP to BUY (from Hold earlier), with a higher TP of RM2.61 (from RM1.99 earlier) based on 25x revised FY22 EPS of 10.4 sen.

Source: HLIB
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Re: IJM Plantations

Postby winston » Mon Jun 29, 2020 7:56 am

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IJM Plantations remains in the red in FY20, dragged down by forex loss

by Wong Ee Lin

KUALA LUMPUR (June 26): IJM Plantations Bhd has recorded its second consecutive loss-making financial year, with a net loss of RM63.42 million arising from total net foreign exchange (forex) losses of RM87.11 million.

For the previous financial year ended March 31, 2019 (FY19), IJM Plantations had posted a net loss of RM36.34 million.

In a filing with Bursa Malaysia today, IJM Plantations said revenue grew 17.16% to RM739.13 million in FY20, from RM630.9 million in FY19.

Despite the bigger loss, the group has proposed an interim dividend amounting to two sen per share, payable on Aug 18.

For the fourth quarter of FY20, IJM Plantations reported a net loss of RM76.39 million versus a net profit of RM13.52 million a year earlier, weighed down by a RM100.68 million net forex loss.

In the year-ago fourth quarter, IJM Plantations had recognised a RM9.73 million forex gain.

“The overall financial performance of the group in the quarter was severely affected by the significant weakening of the rupiah against the US dollar and the Japanese yen,” IJM Plantations said.

Quarterly revenue, however, was 18.56% higher at RM195.39 million, from RM164.8 million last year, due to higher commodity prices.

On prospects, IJM Plantations said the group will continue to face cost pressures mainly from wage increases, the uncertainty of commodity prices and the volatility of forex rates, particularly that of the rupiah against the US dollar and the yen.

Coupled with the disruptive implications of the Covid-19 pandemic, the group expects a challenging financial year ahead.

Source: The Edge

https://www.theedgemarkets.com/article/ ... forex-loss
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Re: IJM Plantations

Postby winston » Mon Jul 27, 2020 2:09 pm

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RHB says IJM Plantations ready for cyclical rotation, keeps ‘buy’ on valuation

by Areeshya Thevamanohar

KUALA LUMPUR (July 27): RHB Investment Bank Research has maintained its “buy” rating on IJM Plantations Bhd with a higher target price of RM2.45 from RM2.05 based on a 25 times to FY21F (March) price-earnings ratio, in line with its mid-cap peers, and an upside with around 2% yield.

In a note today, RHB analyst Hoe Lee Leng said with markets in a liquidity-driven rally, they believe cyclical sectors like plantations could be the next play, providing investors with a relatively safe haven, in terms of earnings.

“We expect demand to continue to pick up as the development of vaccines will instill confidence in businesses. Smaller cap pure-planters like IJM Plantations will benefit from the recent crude palm oil (CPO) price rise, while valuation is still decent.”

Hoe noted CPO prices have rallied of late to the current levels of RM2,739/tonne.

“While we do not see any significant catalyst for this, other than the recently-realised Malaysian plantation statistics — which were a positive surprise — we believe a large part of this 'rally' could have been caused by the current market liquidity.”

The market liquidity has permeated equities, fixed income and commodities, she noted

“That being said, we believe CPO prices are likely to hold relatively steady in 3Q20, given that CPO production only started ramping up in June.”

Pent-up demand is likely to continue at least until August or September, in light of the Deepavali festival in November.

“Post-3Q20, we continue to hold on to our view that 4Q20F should see a pullback in prices, on the back of the seasonal peak production period which will end in 4Q20F, and lower post-festive demand.”

Hoe said on the whole however, CPO prices in 2020F are expected to be 13% higher than that of 2019. Production for most planters, particularly those in Indonesia, will also be higher.

This means earnings will be stronger year-on-year (y-o-y) in 2020 and 2021, given their expectations of a higher RM2,500/tonne CPO price.

“This earnings security, we believe, will give investors a reason to invest in the sector, provided that valuations make sense, of course.

“Extending our investment horizon in line with market expectations, we roll forward our valuation period to December 2021, from June 2021F, for all the stocks under our coverage, while mostly keeping our valuation targets intact," she said.

The RHB analyst said IJM Plantations is currently trading at its price-to-book ratio (P/BV) global financial crisis trough of 1.1 times.

“Our TP implies an enterprise value per hectare (EV/ha) of US$9,000/ha, which is at the lower end of its peer range, which trades at an EV/ha of US$8,000 to US$15,000/ha," she said.

Source: The Edge

https://www.theedgemarkets.com/article/ ... -valuation
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