Anglo-eastern Plantations Share Discussion Threads

[rimau1] 21/4/2022 07:34

Interesting commentary in the MP Evans results call regarding labour shortages and its impact on Palm Oil prices.

MP Evans executive chair Peter Hadsley-Chaplin explained in last month’s analyst call,“labour shortages in Southeast Asia linked to Covid-19 had already hit supply.

“So, with the restrictions, lockdown restrictions and quarantine measures, it made it very difficult for the Malaysian palm oil industry, which was already struggling with its labour, to operate efficiently and effectively,” he said. This meant harvesting and other essential work could not be done. “That’s an ongoing issue,” he added.

“The rise in the price of palm oil dwarfs the additional cost of inputs and labour [for producers],” said Peel Hunt analysts Charles Hall and Clyde Lewis.

[gaiusgracchus] 20/4/2022 08:46

We all know it's obviously cheap based on fundamentals. We all also know that it's cheap because the board appears to be unconcerned about the share price or about sensible capital allocation. It would be nice if that changed.

[skanjete2] 19/4/2022 17:33

The best way to value this company is based on the assets : EV/#hectares.

We know the value of a hectare of prime CPO palms based on the private market (in normal times at least 15.000US$/ha, now probably considerably higher).

Taking into account the minorities and surplus cash, AEP is currently valued at between 5.000US$/ha and 5.100US$/ha. And they have almost 7 mills!

So in terms of stock appreciation, I think we still have some way to go...

[undervaluedassets] 19/4/2022 15:52

Well reasoned.

I certainly see nothing to stop the share price from going up.

The already huge cash pile will be added to; that is a certainty

[stemis] 19/4/2022 12:32

Situations like this are always difficult to value. The inflated price of palm oil won't last forever, so a P/E valuation on current earnings will never seem to be reflected in the share price.

However, here is my stab at an alternative. Let's assume that the situation on 31-12-20 was the status quo. Share price ~500p. Up to 31-3-22 I reckon AEP has generated around 300p/share of cash (~£155m). Currently it must be generating at around 30p a share ($15m). So a share price of 920p implies the current excess price will last about 4 months (to end of July). Obviously it wouldn't be quite as linear as that but it's rough and ready.

However, according to hxxps://www.newfoodmagazine.com/article/162772/supply-chain-ukraine/

"In Ukraine, sunflower seeds are sown in April and May and harvesting usually begins in September. Tensions and military action in agricultural areas pose risks to the supply and demand of the next growing cycle. With trading routes being blocked, import-export facilities shut down, and farmers unable to plant, the average yield per hectare of sunflower seed will take a major blow this harvesting season. "

[Lack of sunflower oil and Russian production too will maintain pressure on palm oil prices]

That could mean high prices until at least September 2023 - another 18 months. On that basis a share price of maybe 1300p would seem reasonable. Still undervalued...

[undervaluedassets] 19/4/2022 10:59

There is no Sunflower oil production in Ukraine. And Ukrainian sunflower oil is (was) a massive sunflower oil exporter responsible for up to 46% of world production.

As a result, I fully expect the price here to continue to appreciate.

[rolo7] 13/4/2022 21:43

Results due 29th April.

[34adsaddsa] 12/4/2022 15:35

If they declared a $200M special I think we'd go to £15

[rimau1] 12/4/2022 13:37

This is looking really strong, IMO the re-rate has not even began if my prudent forecasts are anywhere close.

[red5] 08/4/2022 08:37

Wires crossed apologise

[34adsaddsa] 07/4/2022 23:15

our friend red either has his wires crossed or likes winding people up

[rimau1] 07/4/2022 21:25

No trading statement yet!

[dixi] 07/4/2022 18:08

Has there been a trading statement today? Last one I can see was 26th October last year?

[red5] 07/4/2022 17:00

wondering why the price went down in the early morning with regards to the trading statement

[red5] 07/4/2022 10:07

is this a good trading statement for them.

[red5] 05/4/2022 12:16

Glad I bought yesterday

[rimau1] 05/4/2022 11:57

Stemis, there should be a Trading Update before results. This is when we will know how high our wall of cash has grown.

[stemis] 05/4/2022 11:13

Results tend to come out in early June. As at 30 September they had $192.2m in cash (up $33m in the qtr). By the year end this should be at least $220-230m and by end of May $280m (and maybe as high as $300m). Can't see how the share price will eventually be able to resist the onward march of the cash balance...

[sarah_ajm] 05/4/2022 09:55

I think the problem here is that management are sitting on a pile of cash which should be distributed to share holders, if they started a progressive divident policy then this could fly

[rimau1] 05/4/2022 09:19

Nice start! This should be a technical buy for traders (break-out confirmed) and a deep value buy for investors (cash adjusted p/e of under 3). Trading Update incoming for some hopefully bullish news-flow too.

[melody9999] 05/4/2022 09:07

Blimey - a bit of action here. Topped up this am as the break out is confirmed. Onwards and upwards towards the results I guess which will obviously be very good.

Its going to make AEP look even cheaper

[tonytyke2] 05/4/2022 08:54

For those interested, Michael Taylor published a piece in the trading section of the IC on Friday. In summary, he highlighted that he thought AEP was a trade that has both technical uptrend plus the fundamental improvements with a low valuation. He was looking to buy the breakout out of resistance at around 757p.

[ntv] 04/4/2022 21:20

The share price has been climbing steadily and on a very much larger than average volume over the last few weeks
Hoping this is a good sign
Indonesia governs against overly large asset owners of palm oil holdings so virtually zero chance of an outside T/O other than a management buyout
Still cash must still be building steadily
Trading statement was early so maybe results will be too?

[foxfox79] 01/4/2022 09:08

Good insights! Probably KBC indeed.