Anglo-eastern Plantations Share Discussion Threads

[34adsaddsa] 26/7/2023 21:38

Not much point speculating IMO. Could be Odey, could be a fund divesting for ESG reasons, could be someone sick of the management not doing what they obviously should do. The shares are illiquid and it is what it is.

The management are solely responsible for the shares being structurally undervalued. They could fix it in a day if they wanted to.

[34adsaddsa] 26/7/2023 21:32

Indonesian inflation is 3.5%. Base rate is 5.75%. Presumably they pay tax on the interest.

Average US Dollar deposit rate in 2022 was 2.75% (2021: 0.30%) and Rupiah deposit rate was 3.63% (2021: 3.04%).

Pretty sure they're both tracking base rate.

[beresford99] 26/7/2023 21:22

It must be a distressed seller, this has to be the cheapest plantation share anywhere.
I bought a few last week at a fraction under £7.20 and will buy more after I’ve sold some Malayasian shares. The management have an extraordinary attitude keeping so much cash on hand for so long.Not sure what interest they are getting on deposit or what the Indonesian inflation rate is but a meaningful share buy back program and an interim and final div yield of 6-7% would propel the shares to over £12.

[tigerbythetail] 26/7/2023 10:43

I make the EV of AEP about £88m now (using fairly pessimistic assumptions).
Net cash - $277m.
Medium term exchange rate: assume $1.25
Market cap @ 700p = £277m.
Allow 15% off cash pile to represent minority interests in plantations.
(Ignoring recent purchase of minority interests in 2 plantations and sale of unprofitable plantation + ignoring approx. $30m tax rebate receivable)
EV = £88m.
I know this is palm oil, and I realise that the board in the past have not been shareholder friendly, but either I'm missing something or this is absurd.
Distressed seller? Is it Odey?

[ntv] 26/7/2023 09:15

Placed an order via DMA with IG but not showing on screen
Anyone got the same problem? tia

[tigerbythetail] 25/7/2023 13:22

I think we can say the seller is still here!
The EV here now is absurdly tiny. If you value this like sector peer MPE, then this should be trading at double the current market cap. And I'm quite happy to argue that MPE at its current valuation is undervalued as well.
The argument for share buybacks is very strong at anything like these prices. Where else could MPE get such an implied return on their cash mountain?

[chillpill] 25/7/2023 08:50

Hopefully the seller got cleared up yesterday- highest volume for a while.

[34adsaddsa] 24/7/2023 20:03

I take it you meant Indonesia. These tables from R.E.A. are probably the best you're going to get.

hxxps://rea.co.uk/investors/cpo-export-tariffs/

[stemis] 24/7/2023 19:38

What is the latest tax situation re Malaysian export taxes because, as an ex holder, one of the annoying things was that whenever the CPO price rose, Malaysia seemed to increase the export tax...

[34adsaddsa] 24/7/2023 16:20

MPE up almost 8%. Don't expect this share to properly respond to fundamentals. Until they properly allocate the cash it just won't.

[ntv] 24/7/2023 15:52

CPO prices have soared in recent weeks with the price well over $1000 now

[34adsaddsa] 24/7/2023 15:47

The shares are ludicriously undervalued?

[melody9999] 24/7/2023 15:33

Bit unusual to see 80K traded by 2pm. Something going on?

[34adsaddsa] 21/7/2023 15:52

Anyone have a good reason why the buyback shouldn't be happening right now?

[tigerbythetail] 20/7/2023 12:44

MPE update out today, if anybody wants to read across.
As for the share price here, and at MPE, apparently Odey was a shareholder of both companies, and may now be a forced seller. I don't know how true that is, but it seems as good an explanation as any.

[34adsaddsa] 19/7/2023 20:23

Falling production is bullish because demand is not falling.

[e43] 19/7/2023 19:14

The $25m used to buy out minority shareholders,is expensive in relation to AEP's overall EV,but probably just underscores how cheap the shareprice is here.

[e43] 19/7/2023 19:09

Production has been down plus weaker palm oil prices this year.

[maty] 19/7/2023 12:20

So why is the share price dropping

[tigerbythetail] 18/7/2023 09:08

I think "was abysmal" is a fairer comment.
IMO, the new regime has been making all the right moves so far. There's a lot more work to be done for sure, but credit where credit is due.
Remember how incredibly underpriced this share is compared to a sector peer like MPE!

[34adsaddsa] 17/7/2023 18:57

Because the allocation of excess capital is abysmal ..

(But getting somewhat less bad!)

[maty] 17/7/2023 14:41

Why is this always a disappointing share ..

[skanjete2] 17/7/2023 10:44

These buy-outs are really important and create a lot of value.

Most of the cash is held at the subsidiary level. I think they never upstreamed it, because they wanted to deprive the minorities of important dividends so they would be motivated to sell, once the law allowed it.

So every time a minority shareholder sells, the cash at the subsidiary becomes free to upstream. Then they can allocate it to buy out other minorities, dividend it out, or buy back some (or all?) shares.
They have also more diversification possibilities for the cash. Now a lot is held in Indonesian Rupiah, so this would enable them to hold more US$.

Also important is the price they pay minorities for their stakes : the paid price is meaningfully higher than NAV in the accounts, while the share price is meaningfully lower than the share price.

The big one to take out is Tasik Raja, I guess.

The total cost of buying out all minorities could be 60-80 mUS$, so quite an important investment.