Normally the fist thing i study about a share, of cause, is based on its annual report, but i would also like to have a look and feel on its company’s website.
To me, with current information technology, if you company website doesn’t look good and loaded with plenty of information about your company, you lost your customer and even investor’s confidence in the first place.
So, go ahead and feel it yourself for TANAMAS & DUTALND. DUTALND failed for its first impression to me. However, we can't judge a book by its cover, so …
Now, let’s look at the fundamental aspect for these two counters.
Business background:
DUTALND business are mainly on 3 divisions, plantation, properties and manufacturing.
Based on 2008 Annual Report, revenues mainly come from plantation follow by property sector. Manufacturing is lost making due to cessation of Filati Laster Sdn Bhd in FY2007.
Meanwhile, TANAMAS’s corporate development also divided into 2 divisions. Plantation and Properties. Revenues mainly contributed by plantation division.
Based on its 2008 Annual Report, the company is expanding its planted areas into unplanted areas within next few years.
In line with the increasing demands in bio-fuel production, the company is looking for a better performance for upcoming financial year.
Fundamental:
DUTALND was listed in year 2007, thus the information on annual report that I’m able to grab, is from 2007 onwards. However, in the 2008 annual report, last 5 years financial result was published as below:
Revenue Comparison: DUTALND vs TANAMAS
In terms of revenue, TANAMAS is much better then DUTALND; as decreases in palm oil price and economy downturn in year 2008, revenue for TANAMAS declined 18% compared with DUTALND which declined as much as 42%. Prior to the economy downturn, revenues improved in more than 40% for both 2007 & 2008.
EPS Comparison: DUTALND vs TANAMAS
In terms of EPS, seems DUTALND performs much better than TANAMAS, provided DUTALND first 2 quarters EPS in 2009 were negative. However, TANAMAS quarterly EPS is much consistent compared to DUTALND.
ROE Comparison: DUTALND vs TANAMAS
TANAMAS ROE prior to 2008 is really bad, the best ROE was achieved in 2008.
Both ROE also below 10, which is not good. To me ROE shall more at least range from 11%-15%. Since both company also year ended in June, that will be the ROE for this financial year.
PE Comparison: DUTALND vs TANAMAS
DUTALND is very much undervalue if we take PE 5x as guideline. It’s currently price is at 0.59 (9th Oct 09) which is ranging from 5x-10x.
TANAMAS PE is at range between 10x-15x. Last closed price on 9th Oct 09 was 0.875.
Again, in terms of PE, seems DUTALND is much undervalue compared with TANAMAS.
Dividend Comparison: DUTALND vs TANAMAS
Experiences tell me (even only few months experience :-P, but it also called experiences right?) that dividend plays and important part for share selection, especially when the share price moved into sideway for months, you can not sell it and you will need to rely on its dividend for your capital growth.
DUTALND do not offer any dividend payout.
As for TANAMAS, there were two times dividend payout in year 2007 & 2008 respectively.
- Year 2007, payout in Jan 2008, 2% with 27% tax with par value of RM1.00, which is equivalent to RM14.60 for 1000 share.
- Year 2008, payout in Jan 2009, 5% with par value of RM1.00, which is equivalent to RM50 for 1000 share.
Conclusion:
Let’s compare these two counters on its PE, ROE, DY & Price to NTA.
In terms of PE, DUTALND is more attractive than TANAMAS as DUTALND PE only around 5. However, ROE for both counters also less than 10, in my opinion high ROE is more important that low PE.
In terms of Price/NTA, DUTALND = 0.595/1.2680 < 1, which is much undervalue. TANAMAS = 0.9/1.02 < 1, also undervalue.
Out of 4 basic criteria,
- low PE < 15
- high ROE > 15
- high DY > FD
- Price/NTA = undervalue.
DUTALND fulfilled 2 (PE & Undervalue), and TANAMAS fulfilled 3 (PE, DY & Undervalue).
To me ROE is more heavyweight compared with DY, so, I will figure out some other counters in plantation which can fulfil all of the criteria. I have got some in my list. :P
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