Highlights

THE INVESTMENT APPROACH OF CALVIN TAN

Author: calvintaneng   |   Latest post: Thu, 1 Dec 2022, 2:17 PM

 

TAANN (5012) KLSE PALM OIL JEWEL, High EPS, Grossly Undervalue Assets; & Increasing Dividends, Calvin Tan

Author:   |    Publish date:


Dear Investors

TAANN is a Hidden Jewel of Great Value

TAANN Means "GREAT PEACE" in Chinese or "TAHAN" Will Last Long time in Malay

 

And these are the Salient factors

 

1) TAANN HAS HIGH EPS (EARNINGS PER SHARE)

 

See

 

SUMMARY OF KEY FINANCIAL INFORMATION
31 Mar 2022

 
INDIVIDUAL PERIOD
CUMULATIVE PERIOD
CURRENT YEAR QUARTER
PRECEDING YEAR
CORRESPONDING
QUARTER
CURRENT YEAR TO DATE
PRECEDING YEAR
CORRESPONDING
PERIOD
31 Mar 2022
31 Mar 2021
31 Mar 2022
31 Mar 2021
$$'000
$$'000
$$'000
$$'000
1 Revenue
487,754
340,621
487,754
340,621
2 Profit/(loss) before tax
114,819
47,562
114,819
47,562
3 Profit/(loss) for the period
121,134
47,833
121,134
47,833
4 Profit/(loss) attributable to ordinary equity holders of the parent
104,620
40,975
104,620
40,975
5 Basic earnings/(loss) per share (Subunit)
23.75
9.30
23.75
9.30
6 Proposed/Declared dividend per share (Subunit)
10.00
0.00
15.00
0.00
   
AS AT END OF CURRENT QUARTER
AS AT PRECEDING FINANCIAL YEAR END
7 Net assets per share attributable to ordinary equity holders of the parent ($$)
3.8200
3.6300
 

 

Latest Qtr shows TAANN earned 23.75 sen

Annualised 23.75 x 4 = 95 sen

At Rm3.94

 

Let's get P/E by Dividing Rm3.94 by 95 sen

= 4.15

Or Yield 24.1%

24.1% is what Berkshire earned at 25% in good times

 

Now This Month TAANN should report an even better qtr due to these reasons

i) Taann owns 30% of SwkPlant and in Top Holder. Swkplant FFB (fresh fruit bunches) up 26.9% compared to last qtr. Plus April to June 2022 also saw CPO average at World Record Qtr of Rm6,552

 

ii) TAANN FFB Also Up by 20%

iii) AND TAANN VENEER PLYWOOD EXPORT TO JAPAN UP IN PRICES BY 60% DUE TO JAPAN BANNING RUSSIAN IMPORT

See

 

Level Chart

 
SEP '21NOV '21JAN '22MAR '22MAY '22160.00180.00200.00220.00240.00204.60
 
 
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Dec '21
I:JIPIWLRP: 170.40

Historical Data

Click on MAX Button to See JAPAN PLYWOOD Full Chart History

 

Note: Plywood Prices in Japan up 60% (Wood prices in USA dropped by 50%). Don't get confused

TAANN is enjoying a Windfall Boom unknown to many

 

See further

Japan will ban the import of some Russian timber!

On the morning of April 12, Japanese Minister of economy and industry Guangyi Yoshida said that he would stop importing some timber and other commodities from Russia from the 19th. In fact, affected by the situation in Russia and Ukraine, Japan’s timber prices have risen sharply recently. Will the new import ban exacerbate the situation of low domestic timber volume and high prices in Japan?

Japanese Prime Minister Fumio Kishida recently announced that he would stop importing some Russian timber from this week. However, according to the latest news, the embargo measures will be implemented from the 19th. On the morning of April 12, the competent forestry department of Japan was contacted by telephone. The relevant person in charge said that the scope of the embargo includes three types of processed wood such as veneer.

Single family houses in Japan are generally of wood structure, while Russian wood is commonly used for ceilings, beams and columns. According to statistics, Japan imported about 850000 cubic meters of Russian processed wood last year, accounting for nearly 20% of Japan’s total imported processed wood. After the conflict between Russia and Ukraine, there was widespread concern in the Japanese timber market that Russian timber might be embargoed, and some Japanese businesses snapped up Russian timber. Japanese industry insiders predict that if the import of Russian timber is stopped, an average of 17000 new houses will be affected every month.

In fact, before Japan announced the ban on imports, Russia had first proposed to ban some timber from Japan, which pushed up the price of timber in the Japanese market. The situation in Russia and Ukraine, coupled with the tight supply chain caused by the epidemic, the increase of wood prices has generally more than doubled that of last year. According to Japanese media reports, the rise in timber prices has forced some Japanese people to revise their housing construction plans. When it is difficult to increase the budget, they can only reduce the construction area.

We can EXPECT TAANN To Out Perform this coming month soon

 

2) TAANN NAV is Rm3.82. Is It?

NO! 

Why Not?

ANSWER:

 

BECAUSE TAANN NET ASSETS ARE STILL LISTED AT ANCIENT PRICES MANY DECADES AGO

 

Let us Go See TAANN Assets (Refer TAANN Annual Report: Scroll Down to Properties Owned by TAANN

 

 

See this Palm Oil Estate in Sarawak

 

Lot 101, Block 1, Jemoreng Land District Oil Palm Plantation 1,621 acres - 31.12.2020 Leasehold 60 years, expiring in 2079 Land Rm965,673

 

Ok from above we see

TAANN has 1,621 Acres Oil Palm Plantation in Jemoreng, Sarawak

Leasehold until 2079.

Book Value Rm965,673

To get its cost per acre

Divides Rm965,673 by 1,621 acres

= Rm595 per acre

AMAZING. These prices were long ago more than 40 to 50 years ago

This year 1 Ton FFB (fresh fruit bunch) even crossed Rm1,000 per ton to as high as Rm1,500 per ton.

Currently FFB is around Rm700 to Rm800 per ton

That means that just One Ton FFB could cover 1 acre of Land Purchase Price

 

SO BY RIGHT TAANN LANDS SHOULD ALSO APPRECITE IN VALUE

CAN WE STILL TAKE TAANN NAV AT RM3.82?

Of course not! There is no such low cost of Palm oil Lands anywhere in Malaysia oe Indonesia

 

Now look at another Estate in Sarawak

 

Lot 19, Block 2, Stungkor Land District Oil palm plantation 3,306.8 acres  - 10.03.2017 Leasehold 60 years, expiring in 2071 Land Rm893,518

 

This is 3,306.8 acres & Book Value is Rm893,518

To get Cost per acre

Divides Rm893,518 by 3,306.8 acres

= Rm270 per acre

Amazing indeed!

Where in the world got Palm oil Land sold at Rm270 an acre?

SO CAN WE SAY RM3.82 NAV FOR TAANN IS JUST GROSSLY UNDERVALUE?

IF NOT HOW MUCH SHOULD BE TAANN NET ASSETS WORTH?

 

We come to the 3rd Which is Most Important

 

3) DIVIDENDS!

The Ditto

A cow for its Milk

Hen for their eggs

And a share by golly!

For its Dividends

 

See TAANN DIVIDEND HISTORY

 

 

 

Except for year 2019 when Cpo crashed below Rm2200 (Now CPO is Rm3,878)  TAANN Has been paying good dividends every single year

Last year TAANN announced a 30 sen dividend for the first time in one year.

At Rm3.94 with 30 sen dividend the Yield is 7.6% more than 3X (times Bank FD at 2.25%)

And with Sustained Earnings we can expect TAANN to give "Handsome" Dividends for years to come

Share holders of TAANN can retire in Peace with Such Solid Assets, Good Growth & High Dividends

 

TAANN Now Rm3.94

Our One Year Target price is Rm6.89 (the highest price achieved in year 2008)

That is about 75% upside

 

Best & Warmest regards

 

Calvin Tan

 

Please buy or sell after doing your own due diligence or consult your remisier/fund manager

 

Note TAANN INSIDER DIRECTOR BEEN BUYING

 

 

His highest purchase was Rm4.90 on 9th June recently

And lowest was Rm3.449 on 19th July

Average is Rm4.90 + Rm3.449

= Rm83.49

Then divides by 2

= Rm4.17 (average of high & low)

So can we say for TAANN anything below Rm4.10 is a Real Bargain not to be Missed?

 

Don't forget that during past Palm oil bull run years TAANN also rewarded shareholders with "FREE BONUS"

 

See

 

 

 

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calvintaneng https://ycharts.com/indicators/japan_import_price_index_wood_lumber_and_related_products

click on MAX button to see Japan Lumber price chart
09/08/2022 12:23 AM


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