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Well the share price is also largely related to broader small cap market sentiment, it's never been so low. Almost every company on AIM, probably 95%, are down year on year and many will also be at all time lows.
When the full year results are out we are likely to see a record profit posted for 2023, on almost all metrics they will look as strong as they did in 2021 when the share price was over 5p but that's not enough in the climate. With liquidity and sentiment so low there needs to be significant progress seen, there needs to be considerable cash being generated, all targets being achieved etc.
The company isn't actually in bad shape but management have missed the opportunity to be truly thriving right now and that's what's being punished in these difficult times for small caps.
That's the reason that with CPO prices approaching near record highs - we still see DKL fall.
its not irrational markets - its a complete lack of belief in the DKL management - we are totally reliant on DKL performing in spite of the leadership not because of it.
We are all with you Harchris
the circumstances you currently outline though have been present periodically multiple times over the past 5-10 years - in one guise or another.
the single point of failure every time is leadership and execution.
that's the problem - one win every now and then won't fix it - it needs to be sustained
I stopped reading the trash the broker publishes a long time ago.
The cashew problems (although everyone on here discovered them years ago) are apparently now instantly solvable, the palm oil price is holding at record highs, we’re further down the line and apparently about to repay an enormous amount of debt that’s due.
If anything the broker should have raised their valuation, but someone has probably woken up to the fact that this won’t rise 700% anytime soon or that they put the wrong company name down so they pulled another number out of the hat “let’s say 8, that looks a lot better and is also a Chinese lucky number - that’ll work”
The long term holders here are understandably pis*ed off and are focusing on whether they are going to see a positive return with their high averages t but for everyone else the question is whether to buy, add, hold, or sell at 1.35p a share/£7.2m mcap.
It would take very little to see a meaningful share price recovery here, all we really need is for the palm oil performance to match last year's as that side of the business is already generating cash + it's looking like sales price will be higher this year too. And secondly to finally get the cashew business properly up and running. No fireworks needed from the cashews if the palm side performs well, we just need to see an improvement to boost sentiment as much as anything else.
We're talking very minimal operational improvements with the backdrop as favourable as it is for profits to start flooding in and a sharp rerate to happen from such a lowly valuation, from this all time low. Does that mean reaching the brokers target of 8p? No not necessarily but that's not a reason to hold off buying at 1.3p.
You would think every leader in the business now would be moving mountains to make sure the cashew business is up and running, as they claim, by Q2 - for me id have leadership on calls every day - where are we against plan, what are the obstacles, who owns them, when will they be sorted
yet who here has any confidence this will be the case - when i hear Q2 from Lincoln my immediate thought these days are - ahh well so not this year then!
you can't buy a company with leadership at this level of capability
TO THINK if i held i be 10 k under ,dkl WILL NEVER CHANGE
Yep - spot on JK, agree with every part of that
with the right level of focus and effort, with an aim for ALL shareholders to benefit been at the heart of everything DKL do - this business should be relatively straight forward - to operate and scale and be profitable.
by far the biggest drain on this share price and the biggest risk to the future of the company is the management and leadership.
my addition then to the excellent list of points JK makes would be leadership changes - but i can't see that.
I hate to say it - but my biggest worry is they let the business and share price fail to derisory levels - and then via one of their other companies - buy DKL - via issue of shares in their other company.
Blue2Guit - you reference scam - if its going to happen, along those lines is how it will take place.
Jk. very good post. Maybe you should forward to Lincoln and see what he has to say...
Rgds
DKL found themselves in a mess in 2023, too heavily indebted at a time when any heavily geared company was being sold off due to rising i.rates and with very little cash.
Palm oil performance rescued them from what could have been a disaster (a forced emergency raise would have been extremely ugly and probably sub 1p) but continual cashew failures have knocked confidence and will have dented what should be a very healthy balance sheet now.
We need to see more of the same from the palm oil business through 2024 and the cashew issues must be resolved. So far int. palm oil prices are very favourable (gone through 4000MYR as we speak) and the effects of El Niño are expecting later this year so the foundations are in place for a very profitable year.
I don’t think investors will return though until it is seen in black and white, so looking at a few more months most likely without much SP recovery.
My two penneth would be there has been so much disappointment that every time there is a large sell off, other holders just want to be out at any price. This leads to the SP being pushed further and further downwards. Even long term holders here, as we've seen recently with rugs and blue2guit, are questioning their investment.
Every time we get positive news, at most you're going to see a 10%-20% upswing (from a now very low level), whereas long term we've seen a 90%+ downswing (from high ish SP levels) - to the point where we now need an 800% upswing to get back to where we started.
Common sense would suggest the SP is far too low, but the market has spoken.
How do we move forward from here?
We're not going to see a new board, they have control.
They need to stop trying to 'gok wan' events and just tell us how they're going to resolve issues.
It's been said time and time again, they don't listen. They need to start listening.
My 5 step plan would be to:
1) Resolve cashew issues asap.
2) Increase further the number of FFB collections, they're still too low.
3) Start director buying at these prices, even if only to sell on again later when 'normality' (hopefully) returns.
4) Stop dilution and make clear it's going stop.
5) Stop trying to pull the wool over our eyes with stunts like 60k tonnes facility, when it was built as 70k tonnes.
Danny, for clarity WH Ireland have reduced that 9.5p target to 8p on the back of this months news.
Down down deeper and down.
Don’t be alarmed. A totally capable - totally independent broker has done a thorough ‘Jeremy Paxman style’ investigation on it and has come to the conclusion that the shares are worth 9.5p right now… actually for the last couple of years.
This time next year Rodney …
Admin: For avoidance of doubt I am not saying this is a scam, Iam saying it feels like a scam. So please do not take down this post
The company needs to explain fully how they have got to where they are, and what steps they are taking to put right a business plan that seems to be broken. They need to restore credibility. We need a refresh of the Board.
82% of my investment has disappeared over a period of many years. THE BOD do not care. I fear this company will be taken private. All long term investors are totally dispensible now, because we no longer are prepared to stump up any more money.
The top guys are elusive, invisible and have no morals.
Yes i know, I could have sold at any time. I had high expectations but now have belatedly come to my senses.
The continued disparity between promises and outcomes, over a very long period of time, cannot just be bad luck. There is an agenda here that resembles the modus operandi of scammers, with an initially convincing mouthpiece that has become more and more difficult to give any credibility to.
Take care everyone.
Share price is drifting down on low volume meanwhile CPO prices strengthen.
Here's another article today with a little more insight https://www.chemanalyst.com/NewsAndDeals/NewsDetails/us-fatty-alcohol-ethoxylates-prices-gain-momentum-amidst-palm-oil-price-rise-and-global-24789
You are certainly right in the last part Christrader as it sinks ever lower. There is no floor price here that this inept BOD can not take us through. They are however clever enough not to buy in the open market no matter how low it sinks. Looks like their salaries feather their nests and they are unwilling to sacrifice this feathering for a a show of support to their enterprise. It has dropped about 30% since the guy was tweeting to buy it so I imagine his followers will be dumping in droves at this rate.
From a chart perspective, the share broke long term support at 1.9p - so might be slight resistance once it hits that - but clear skies to 2.8p from there.
Think 2024 sees a strong year financially and operationally for DKL and can't see this sitting down here at 1.5p for long.
We were already looking at a healthy strengthening of prices through H1 into H2 due to the El Nino effect but now with the Houthi crisis in the Red Sea on top are we about to see a repeat of spring 2022 with CPO prices spiking well north of 4000MYR?
Yes I've noticed this trend Chris. CPO keeping the company moving forward while the cashew business lags.
International CPO prices continue to knock on the door of 4000MYR. I know that isn't the exact price DKL themselves receive but higher int. prices will see local prices trending upwards also.
Foundations continue to look strong, over to management to make the most of it.
The aforementioned conversation between Lincoln Moore and MBTrading:
https://twitter.com/MBdaytrading/status/1746871409765240986
"Palm Oil Prices Expected to Surge"
https://bnnbreaking.com/world/malaysia/palm-oil-prices-expected-to-surge-says-industry-expert/
Despite already owning such a large amount of the company it certainly would help sentiment in the short term for the directors to buy a good chunk on the open market in the coming weeks.
A simple thing that could create a decent reaction to fingers crossed - meanwhile int. CPO prices continue to look strong.
ConMan, to build up some level of (extremely cheap) stock to pay for the invetible payment in lieu for services rendered later. Why create more out of thin air down the line, when they can buy cheap on the open market now?
That is a totally seperate issue to debt, addressed the other day, which is falling at a reasonable pace already.
The SP being battered is a confidence issue in itself.
Why on earth would the company start buybacks now when we have so much debt that we need to get down. Get the cashews sorted, cash flow rolls in, pay down debt to reasonable level. If at that point company undervalued then yes buyback shares.