BLDPlnt- Happy Days Are Here Again!

Operational Update

BLD Plantation Bhd ("BLDPlnt") is a Sarawak-based oil palm company. It has 51,639 hectares of plantation land; of which 24,580 hectares had been planted with oil palm. 86% of the planted area are in various stages of maturity (as compared to 40% in late 2007 when I first posted on this stock).

Results Update

For QE31/3/2011, BLDPlnt.s net profit increased by 50% q-o-q or 87% y-o-y to RM34 million while turnover increased by 3% q-o-q or 74% y-o-y to RM424 million. The improved performance is due to higher prices for CPO & increased output as its panted acreage matured progressively.


Table: BLDPlnt's past 8 quarterly results

From Chart 1, we can see the transformation of a company within a short span of 4 years! BLDPlnt's annual turnover roared from a mere RM100-120 million in 2007 to RM1.4 billion today.


Chart 1: BLDPlnt's last 26 quarterly results

Financial Position

As at 31/3/2011, BLDPlnt's financial position is deemed satisfactory with current ratio at 1.3 times while net debts to equity at 0.14 time. (Note: The net debts is arrived at by deducting cash balances of RM294 million from bank borrowings of RM371 million).

Valuation

BLDPlnt (trading at RM6.10 as at 10.00am this morning) is now priced at a PE of 7 times (based on last 4 quarters' EPS of 89.97 sen). At this PE multiple, BLDPlnt is deemed very attractive.

Technical Outlook

BLDPlnt has just broke above its horizontal resistance of RM5.60 (see Chart 2). In the middle of 2010 when the stock broke above the horizontal line RM4.00, it gained RM1.50 to hit a high of RM5.50. If the stock can put in a similar gain, the current breakout could send the stock to a high of RM7.00.


Chart 2: BLDPlnt's daily chart as at May 31, 2011 (Source: Quickcharts)



Chart 3: BLDPlnt's monthly chart as at May 30, 2011_plotted on log scale (Source: Tradesignum)

Conclusion

Based on good financial performance, attractive valuation & positive technical outlook, BLDPlnt is a good stock for long-term investment.