Koon Yew Yin 27th March 2014
Like most commodities, palm oil price also moves in cycle. There are several reasons why commodity price is cyclical in nature. The price of any product depends largely on the theory of supply and demand which also depends on other economic factors such as economic expansion, recession, interest rate and other factors, all of which are also cyclical in nature.
A few weeks ago, I posted an article under the title ‘Palm Oil Price Trend’ on this forum where I said the average CPO price was Rm 2,250 for last year per ton and in the recent Malaysian Palm Oil conference, all the experts expect CPO price to rise to Rm 3,000 soon. The average CPO price for this year will most likely be about Rm 2,750 per ton. As a result, all plantation companies will enjoy an additional profit of RM 500 per ton for no additional effort, literally for doing nothing.
As we all know, due to the poor CPO price for last year, the share price for all plantation companies have been depressed. Most of them are on cheap sale.
Since the CPO price is at the beginning of the uptrend cycle, all plantation companies will show increasing quarterly profit in the next several quarters.
About 80% of my total investment is on the plantation sector. I have Kulim, FGV, SOP, TH Plantation and Jaya Tiasa and their closing prices are Rm 3.40, 4.46, 6.40, 2.00 and 2.75 respectively. I must warn you that if you decide to buy, you are doing it at your own risk.
Like most commodities, palm oil price also moves in cycle. There are several reasons why commodity price is cyclical in nature. The price of any product depends largely on the theory of supply and demand which also depends on other economic factors such as economic expansion, recession, interest rate and other factors, all of which are also cyclical in nature.
A few weeks ago, I posted an article under the title ‘Palm Oil Price Trend’ on this forum where I said the average CPO price was Rm 2,250 for last year per ton and in the recent Malaysian Palm Oil conference, all the experts expect CPO price to rise to Rm 3,000 soon. The average CPO price for this year will most likely be about Rm 2,750 per ton. As a result, all plantation companies will enjoy an additional profit of RM 500 per ton for no additional effort, literally for doing nothing.
As we all know, due to the poor CPO price for last year, the share price for all plantation companies have been depressed. Most of them are on cheap sale.
Since the CPO price is at the beginning of the uptrend cycle, all plantation companies will show increasing quarterly profit in the next several quarters.
About 80% of my total investment is on the plantation sector. I have Kulim, FGV, SOP, TH Plantation and Jaya Tiasa and their closing prices are Rm 3.40, 4.46, 6.40, 2.00 and 2.75 respectively. I must warn you that if you decide to buy, you are doing it at your own risk.
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9 people like this. Showing 10 of 52 comments. Show more comments 
johnny cash Mr
Koon so long to wait,, by then our next general election will be
approaching.. and during GE all this companies will surely slowdown
again..
01/04/2014 23:08
Koon Yew Yin Johnny
cash, the price of Mudajaya has been consolidation at this level for
long time. The downside risk is very minimum. If you cannot wait then
you can buy other shares. In any case, I am not asking you to buy
Mudajaya.
02/04/2014 11:23
Koon Yew Yin Mulpha
holds 22% of Mudajaya and another major shareholder, former CEO, Ng
Ying Loong is in control of 24%. It is selling much cheaper in terms of
P/E ratio than IJM Corp and I prefer to buy Mudajaya.
TSH is famous but I prefer to buy JT, Kulim, SOP, TH Plant, FGV and Sarawak Plant at this price level.
TSH is famous but I prefer to buy JT, Kulim, SOP, TH Plant, FGV and Sarawak Plant at this price level.
03/04/2014 22:27
nsk82 this
THE_EDGE article on Malaysia palm oil stock level (at 3 years low) may
drive investors to grab palm oil company shares like no-tomorrow in the
coming weeks.
http://www.theedgemalaysia.com/business-news/283627-preview-malaysias-march-palm-oil-stocks-seen-hitting-3-year-low.html
http://www.theedgemalaysia.com/business-news/283627-preview-malaysias-march-palm-oil-stocks-seen-hitting-3-year-low.html
04/04/2014 18:10
SpeedyBoy Icon8888,
I am looking forward to your article on Mulpha soon. It is the most
laggard stock in Bursa the last few years or so. Look at Daya, Iris,
TAE. TH Heavy, and Malton etc - their prices have more than doubled up
but Mulpha is still hovering at just above 40 sen. The fact that they
have a substantial shareholding in Mudajaya and also that they have a
higher NTA in relation to the share price means nothing. I have a close
friend who have accumulated almost a few hundred lots of Mulpha from 66
sen all the way to 37 sen and his average cost is about 43 sen. He is e
patiently waiting ! I just do not know how to explain to him. In fact I
am holding 80 lots myself for the last 3 years.
04/04/2014 20:42
Icon8888 ok speedyboy I will do it
please give me sometime.
it is a complicated group
please give me sometime.
it is a complicated group
04/04/2014 21:48
SpeedyBoy No hurry, Icon8888. If we can wait a few years, why not a few more days or weeks. Thanks.
04/04/2014 22:47
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