Some Key Figures from KLK 2012 Annual Report

Market cap: RM23.5b (end of September 2012)
Revenue: RM10.57b
Net profit: RM1.21b

Total planted area: 212,300ha
Plantable reserves: 23,390ha
Conservation areas: 8,936ha
Building sites, etc: 6,697ha
Group's plantation land bank: 251,325ha

Oil palm age in years:
4 - 9: 55,145ha (28%)
10 - 18: 76,831ha (40%)
19 and above: 22,989ha (12%)
Mature: 154,965ha (80%)
Immature: 38,265ha (20%)
Total: 193,230 (100%)

Rubber age in years:
6 - 10: 2,051 (11%)
11 - 15: 3,677 (19%)
16 - 20: 2,264 (12%)
21 and above: 7,737 (40%)
Mature: 15,729ha (82%)
Immature: 3,341 (18%)
Total: 19,070 (100%)

OIL PALM
FFB production: 3,259,342mt
Yield per mature hectare: 21.33mt FFB
Profit per mature hectare: RM7,218 (before replanting expenditure)
Refined palm products: RM3,220/mt ex-refinery
Crude palm oil: RM2,829/mt ex-mill
Palm kernel oil: RM3,295/mt ex-mill
Palm kernel cake: RM286/mt ex-mill
Palm kernels: RM1,580/mt ex-mill
FFB: RM506/mt
Planted area (mature): 152,829ha
Planted area (immature): 39,595ha
Palm products revenue: RM4,487,975,000
Palm products gross profit: RM1,069,504,000
Oil extraction rate: 21.7%

Ex-estate cost of FFB: RM238/mt
Ex-mill CPO cost: RM1,303/mt

Indonesian CPO was traded at a severe discount, ranging from RM400/mt to RM700/mt depending on the location and the rate of export duty for the month.

Trading range for palm kernels during the financial year was approximately between RM1,350/mt to RM2,100/mt

RUBBER
Rubber production:18,997,000kg
Yield per mature hectare: 1,191kg
Profit per mature hectare: RM7,210 (before replanting expenditure)
Average selling price: 1,220 sen/kg (net of cess)

Planted area (mature): 15,957ha
Planted area (immature): 3,623ha

Rubber revenue: RM258,484,000
Rubber gross profit: RM109,340,000

Ex-estate cost RM4.34/kg.

Kseng - expecting bumpy dividend in 2013?

Read Hwangdbs research daily focus on Kseng,

Major re-rating catalyst from potential bumper dividend by FY13. Potential M&A target with 83% of market cap in liquid asset (RM1.90/share net cash, RM1.32/share investment). Deep value from Johor land bank with significant upside potential. Fair value of RM6.00, based on 30% discount to RM8.50 SOPderived valuation

Based on the amount stated in 2011 annual report whereby the company has RM358.506m to pay as franked dividend, and after deducting the 4% interim dividend declared in Aug 2012, the company has about RM344m balance to pay as franked dividend out of its retained earnings. The transitional period of 6 years to allow companies to pay franked dividends to their shareholders expires in 31 December 2013.

IF Kseng chooses to clear all its 108 balance of the Income Tax Act, 1967, and outstanding shares of 361.5m, investors could expect a hefty dividend payout in 2013.

Naim, a good value play?

Naim has 33.63% stake in Dayang.

At noon break, Dayang closed at RM2.43
Dayang total shares outstanding: 550m
Dayang market cap: RM1.3365b (RM2.43 x 550m)
Worth of Naim's investment in Dayang: RM449.46m (1.3365b x 0.3363)
Naim total shares outstanding: 250m
Worth of investment in Dayang per Naim share: RM1.798 (RM449.46/ 250m)
Naim's share price at mid-day closing: RM1.78

This means that investors are getting the construction and property development businesses in Naim, which currently contribute about 2/3 of its total earnings for FREE!

In its book, Naim still has about 2,620 acres of land for development. On top of that, it has 5.2% of treasury shares which could be distributed to reward the shareholders.

Rubber glove

Total % of healthcare expenditure of country’s GDP

US: 16.2%

UK and major European countries: 10.1%

Brazil: 9.0%

China: 4.6%

India: 4.2%

Powdered latex gloves being the most popular among developing countries whose end-users are more cost-conscious. Powder-free latex and nitrile gloves were preferred by developed countries namely the US and Europe

Top Glove – By August 2013, the factory expansions and new facilities will have increased the Group’s capacity to around 44.8b pieces of gloves

Latex inventory 2 weeks

On average, manpower and energy each makes up about 10% of the cost structure while rubber, the primary raw material for glove production, accounts for the largest portion of some 60% of total cost.