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There’s a lot of interest income here on the cash pile.
Agree
Visitor, good to see you are on board here and ofcourse I am happy for you to quote me.
I always believed the difference in the valuation of MPE and AEP was just because of AEP's reluctance to distribute any cash to shareholders. I have been following this for over a year and Madam S K Lim's passing away has opened the door for a change in stance from the BOD. The director biy last month was a major hint. Also worth noting, all the directors earn c£2m at MPE compared to $194k at AEP in 2022.
I know where I would rather invest my money in.
Very strong results. For a £345m market cap, AEP have a Net Cash position of $277m and in addition to this they have a large Tax Receivables owed to them from past overpayment. When comparing Tax Receivables minus Tax Liabilities, there is some $30m Net due back to AEP.
"The tax receivables represent the corporate income tax ("CIT") and value added tax ("VAT") that have yet to be refunded by the Indonesia tax authority. The tax receivables relating to CIT arose due to over payment of tax. The tax receivables relating to VAT arose because the majority of the Groups' CPO was sold to bonded zones which do not attract output VAT and thus the input VAT incurred is claimable. Upon submission of a tax return (for CIT) or a request letter (for VAT refund), a tax audit will be conducted by the tax authority and whilst every effort is made to resolve this quickly, the process can sometimes take more than 12 months."
Affan does very good of summarizing the situation and AEP under-valuation by comparing to MPE (hope he doesn't mind me quoting him):
"Talking of the comparison between #AEP and #MPE again
#AEP -Mkt Cap £342m, Net Cash $277m, Planted area 68,000 hectare
#MPE Mkt Cap - £465m, Net Cash $35m, Planted area 41,000 hectare
Only difference was #MPE was paying a divi and buying shares back.
No difference now?"
https://twitter.com/feynzz
870p at 9:40, 2.5% dividend and small buyback should help set a new level for the share price. I can not see a better public company in Palm Oil to invest in.
AEP is finally listening to the market, increasing dividend from 5c to 25c and launching buyback program. This should move the stock.
Growth of the Lim family fortune. Certainly not dividends or share price....
Growth of what?
Surely the massive buys this week should indicate positive growth potential.
for keeping banging on about unrealistic prices but if you are selling single figure shares the price is going to be below the norm. As of 1130 today for a 1000 parcel I can sell at just under 760 and buy a similar amount for 766, so 744 is not a realistic mid price.
at 736 made at an unrepresentative pricing,
As of 0900 this morning I can sell at 770 and to buy its 792.
No. It's because this thing is illiquid as hell, volume was the highest since May and the management refuse to do the obvious thing to benefit shareholders. Looking at fundamentals is a waste of time until that changes. Market cap now just 66% of MP evans.
Growing tensions between Asian palm oil producers and the European Union - https://www.reuters.com/markets/commodities/growing-tensions-between-asian-palm-oil-producers-european-union-2023-01-13/
Indonesia palm oil export curbs, biodiesel plans to hit world vegoil supplies - https://www.reuters.com/markets/commodities/indonesia-palm-oil-export-curbs-biodiesel-plans-hit-world-vegoil-supplies-2023-01-13/
However, LSE showing 784 as a midpoint in the current pricing is a bit of a joke as the spread is 817 to 790.
34. Nothing changes here. In a year or so the cash balance will exceed the market cap.
I think Madam Kim must have had a ghost writer because I sense that - despite her death - the same hand is behind these management descriptions.
That trading update couldn’t have been worded more negatively. Decreasing output, increasing costs, weak prices, late milestones, etc yet still up 4%. Any other company would have taken a hammering. Just goes to show the current value here
So AEP have Net Cash of $253m, inventories full to brim (probably another $30-40m, in Interims it was $40m), so GBP terms circa £246m.
Market Cap of £313m. Normalised for Net Cash + Inventories, AEP is valued at £67m?!!
Given we hold so much cash these rate increases should be favourable
https://uk.finance.yahoo.com/news/analysis-asian-farmers-plant-boost-230502606.html
Starkest valuation disconnect I am aware of…
This is a SCREAMING Buy.
NO BRAINER Relative trade: LONG AEP, SHORT MPE
AEP Massive valuation discount to MP Evans and Asia peers unsustainable. Ex mountain of cash on B/S (USD190m vs mcap 350m) AEP trades on 2-4x discount to MPE on FCF Y and PE.
Generated punchy 40% ROE at H1 yet trading on 0.6X BV ex cash.
Trades like total roadkill
BUY
they haven't paid out the money
Very impressive 1H 2022 Results, when you put it in perspective of current AEP market cap of £374m ($441m):
1) AEP has Net Cash of $247m with increase in Inventory of $41m = $288m
2) Profit after tax for 6 months 1H 2022 was $69m, so annualized $138m. That's a PE of only 1.1 when taking into account cash position.
3) Cash + Inventory Increase of $53.2m, annualized "free cashflow" of $106m. Or FCF ratio of only 1.4 when taking into account existing cash position.
The big unknown of course is what path new Chairman Jonathan Law Ngee Song and NED Marcus Chan Jau Chwen (Genton International Limited 51% majority shareholder) will take company now and how they will distribute and use the huge cashpile. The younger shareholders of Genton may want an income from their holdings to pursue other ventures etc.
Expansion continues with 7th mill in North Sumatera due to be complete year end ($22m capex so far) and an environmental study commenced with view of applying for permits on potential 8th mill in Kalimantan. So even with organically funding growth of the company, the huge cashpile must surely be used for significantly increased dividends in future? For the answer though we may have to wait for Final Results in May 2023, where cash pile could be near the actual market cap if we're still at same share price!
How can we be marked down on the strength of these results ?? Just look at the amount of cash we are holding.