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Malik yes governance is a concern, companies like this with a large overhang are more likely to suddenly decide to delist leaving minority shareholders with a difficult choice. There are few large institutions on the register to get in the way. Catalyst for this has to be a more friendly shareholder return policy, particularly a special dividend
This stock is priced as though it’s going bust next year.
Though it seems it has always traded cheaply and at bid discount to peers - now at admittedly at an extreme.
Its beyond my comprehension why they barely pay any dividends given enormous cash flow, nor do they opt for massive buybacks.
Something is very wrong here.
Is the 51% shareholder blocking this entirely from being a shareholder friendly organisation? Why accumulate so much cash and return nothing to shareholders?!
I am just thinking… what’s the catalyst we need to get this thing moving?
Views?
$32m cash generated in the 1st quarter and prices are currently nearly $200 higher than Q1. Simply immense cash flow
https://www.bloomberg.com/news/articles/2022-05-19/indonesia-lifts-palm-oil-export-ban-in-relief-to-global-market
Excellent news for AEP
errrr madam lim ??? :-)
looked on advfn, great numbers, div and no expansion planned made no sense to me....
toptiger a few reasons as touched on below:
- the business is controlled by Madam Lim. How much do we know about her?
- business subject to the whim of the Indonesian government (sovereign risk). Recent example being the sudden (and some might say irrational) CPO export ban and the frequent changes to the palm oil tax regime
- questionable commitment to shareholder returns indicated by a reluctance to pay out what is clearly excess cash
what are your reasons ragnar ?
oh yes why its cheap is very easy to explain
At least they aren't on AIM and have two independent directors that don't have any obvious connection to mdm
Ragnar. Yours all true but it is also likely that Mrs Lim being the daughter of the guy who ran the Genting goup likes to keep money in the family. John Lim (her brother ??) is the executive director.
So MCap of £340m ($425m)
Net cash of $220m
Net cash flow of $100m
And prices well up this year so net cash flow could be more like $150m
Whaaaat?
MCap 50% covered in cash and even if prices fall by 30% over the next year the MCap will 100% covered by cash in 2 years.
The teeny dividend is amusing, they are keeping enough cash for a 50% price decline and 50% demand decline for 5 years! I think they probably don't want to draw too much attention to themselves and how much they are profiting from higher food prices.
I only hold a small position here because, among other reasons, I'm nervous of what else the Indonesia government might do, I guess the market is as well. Its not possible the government bans CPO exports for long, this presents unbelievable value if you are willing to stomach the jurisdiction risk
Hopefully someone puts the question to the board about the cash pile. Either use it or return it to shareholders imo.
incredible results. Paltry final dividend
Results are out
It will just put a squeeze on prices for when they start exporting again imo. Indonesia can't consume all the palm oil they make, it's inevitable they will go back to exporting.
CPO now added back to the export ban list.
https://www.reuters.com/world/asia-pacific/indonesias-palm-oil-industry-braces-upcoming-export-ban-2022-04-27/
Sorry - got muddled up - you're right.
Should be a good 'un
I saw Affan on Twitter said it will be full year results on Friday and the TU in May. Seems a bit backwards from previous years though
TU out on 29th April - this Friday
GL not that we need it given the cash they are milking from op!
It's because they actually pay out the money they make. There's really nothing more to it.
31st of March 2021- $142.3m Cash, Average CPO Price $1078
31st or September 2021 - $192.2m Cash, Average CPO Price $1178
31st of March 2022 - Average CPO Price $1500/1600? Cash?
I have no idea why MPE are worth double this, when they have a fraction of the available cash. AEP should be trading a lot higher, and also put in a dividend to attract more investors imo.
https://www.reuters.com/world/asia-pacific/indonesia-export-ban-will-not-include-crude-palm-oil-sources-2022-04-25/
CPO export ban - no longer an issue !
Therefore, sp fall = great opp to buy back before TU
Lol i need sleep! Could have swore i read my first message saying AEO so posted the second saying AEP only for first to actually say AEP
Oops fat fingers again. Should be AEP and not AEO
We've all did that before! Key thing is unless your 1 lucky so and so you will never time it perfectly so aslong as you make good gains then don't look back on what could have been. Im hoping for a special divi here but doubt will get it. If AEP has a war chest- which in my opinion they do with CPO prices taking of then they "need" to give some back to holders.
CPO prices continuing to increase and likely to do so for some time. AEP printing money all the way.
Holding tight as I've made the mistake of selling too early on others and I ain't repeating it here!