MKH OIL PALM (EAST KALIMANTAN) BERHAD

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opinion and reader should take their own risk in investment decision.


Open to apply: 29 March 2024
Close to apply: 16 April 2024
Balloting: 19 April 2024
Listing date: 30 April 2024

Share Capital
Market cap: RM634.626 mil
Total Shares: 1.02359 bil shares

Industry CARG
Consumption of CPO (Indonesia), 2020 - 2023(e) : 5.70%
Exports CPO (Indonesia), 2020 – 2023: 0.2%
Consumption of CPKO (Indonesia), 2020 - 2023(e): 5.17%
exports of CPKO (Indonesia), 2020 - 2023(e): -3.51%
Industry competitors comparison (net profit%)
1. MKHOP Group: 9.2% (PE20.3)
2. Anglo-Eastern Plantations Plc: 21.37% (PE7.02)
3. PT Austindo Nusantara Jaya Tbk: 7.86% (PE53.27)
4. PT Teladan Prima Agro Tbk: 15.89% (PE10.31)
5. R.E.A. Holdings plc: 15.75% 
6. Kencana Agri Limited: 1.72%
7. NPC Resources Berhad: 0.27% (PE22.56)
8. PT Jaya Agra Wattie Tbk: -31.07% (losses)
9. PT Gozco Plantations Tbk: 13.67% (PE6.24)
10. Global Palm Resources Holdings Limited: 12.81%
11. PT Andira Agro Tbk: -0.9%  (losses)

Business (FYE 2023) 
Cultivation of oil palm and production and sale of CPO (Crude Palm Oil) and PK (Palm Kernel).
Segment
1. CPO: 91.7%
2. PK: 8.3%

Fundamental 
1. Market: Main Market
2. Price: RM0.62
3. Forecast P/E: 20.3 (FYE2023, EPS RM0.031)
4. ROE(Pro Forma ):  5.55%
5. ROE: 9.96% (FYE2023) ,21.41%(FPE2022), 36.64%(FYE2021), 14.98%(FYE2020)
6. Net asset: RM0.55
7. Total debt to current asset: 0.4396 (Debt: 67.802mil, Non-Current Asset: 476.762mil, Current asset: 154.228mil)
8. Dividend policy: 50% PAT dividend policy.
9. Shariah status: Yes

Past Financial Performance (Revenue, Earning Per shares, PAT%) 
2023 (FYE 30Sep): RM337.981 mil (Eps: 0.0310), PAT: 9.20%
2022 (FYE 30Sep): RM315.817 mil (Eps: 0.0590), PAT: 19.0%
2021 (FYE 30Sep): RM306.611 mil (Eps: 0.0760),PAT: 25.3%
2020 (FYE 30Sep): RM282.324 mil (Eps: 0.0180),PAT: 6.6%

Major customer (FYE2023) 
1. Apical Group of Companies: 82.0%
2. PT Energi Unggul Persada: 13.8%
3. Golden Agri-Resources Group of Companies: 3.90%
4. PT Samudra Biru Cemerlang: 6.3%
***100.00%

Major Sharesholders 
1. MKH: 28.68% (direct)
2. Tan Sri Alex Chen: 66.61% (indirect)
3. Tan Sri Eddy Chen: 66.50% (indirect)
4. Datuk Chen Fook Wah: 66.38% (indirect)
5. Metro Kajang (oversea): 30.65% (direct)

Directors & Key Management Remuneration for FYE2024
(from Revenue & other income 2022)
Total director remuneration: RRM6.171 mil
Key management remuneration: RM1.00 mil – RM1.250 mil
total (max): RM7.421 mil or 8.07%

Use of funds 
1. Expansion of land banks for oil palm plantation: 30.8%
2. Capital expenditures for existing plantation lands: 7.3%
3. Setup of PK crushing facility: 6.6%
4. Refurbishment and/or upkeep of existing palm oil mill: 8.9%
5. Capital expenditures for refurbishment and construction of workers/staff housing quarters: 7.3%
6. Capital expenditures to expand coverage of electricity supply 7.3
7. Repayment of loan due to a related party: 22.0%
8. Working capital: 2.5%
9. Estimated listing expenses: 7.30%

Conclusions (Blogger is not wrote any recommendation & suggestion. All is personal opinion and reader should take their own risk in investment decision)
Overall it should be categorized into low to mid growth potential of company.

*Valuation is only personal opinion & view. Perception & forecast will change if any new quarter result release. Reader take their own risk & should do own homework to follow up every quarter result to adjust forecast of fundamental value of the company.