United Plantations Berhad

We can see a number of cash rich companies announcing special dividends. This may, or may not, be due to the dividend tax coming into play next year. For example:

$KMLOONG / 5027 (KIM LOONG RESOURCES BERHAD) and $UTDPLT / 2089 (UNITED PLANTATIONS BERHAD) (have been declaring special dividends for many years already)
$LYSAGHT / 9199 (LYSAGHT GALVANIZED STEEL BERHAD) as discussed by @benghooi and @realalvinang before
$MSC / 5916 (MALAYSIA SMELTING CORPORATION BERHAD) with a substantial 17 sen special dividend for the first time in over a decade
$KOSSAN / 7153 (KOSSAN RUBBER INDUSTRIES BERHAD) also declares a special dividend
Pecca, Hexza, TMCLIFE, hupseng, far east and more.

What are some similarities of these few companies declaring these dividends? Some are record high, some are highest in a few years-- are these dividends coming from improved business operations, or appropriation of cash in the balance sheet that is expected not to be utilised in the near future?

Which other companies could potentially give a surprise bumper dividend before the year ends?
Many listed companies in Bursa are cash rich (or even cash hoarding, some might say); could there be any other which could be compelled to issue dividends soon?

Of course, as usual, due diligence is required and it's typically not a good idea to be fixated on just this singular facet (of special dividends due to the upcoming dividend tax). But it's something to think about. After all, if a major shareholder was to receive the money from the business they have been handling for years; now would be as good a time as any.

Today, $UTDPLT / 2089 (UNITED PLANTATIONS BERHAD) hit all time high. In spite of the very negative sentiment surrounding Bursa today, a stock with large dividend payouts in the very unloved sector hit a new share price all time high.

What's happening with them, and who could replicate what they're doing?

@realalvinang collectively, there are a bunch of reasons why and I think you covered some of the main ones. However, zoom in a bit from just a "plantation sector" into "selected plantation companies" and you might find some that are performing very well indeed.

For better or for worse, a lot of the "largest cap" plantation companies are no longer pure planters, but instead more like conglomerates including sime darby, ioi, klk, genp, and so on, with arms in solar, property, oleochems, etc. With them being so big cap, they carry the highest weightage in the plantation index.

Focusing on more pure planters, for example $UTDPLT / 2089 (UNITED PLANTATIONS BERHAD) , $KMLOONG / 5027 (KIM LOONG RESOURCES BERHAD) $TAANN / 5012 (TA ANN HOLDINGS BERHAD) $JTIASA / 4383 (JAYA TIASA HOLDINGS BHD) $TSH / 9059 (TSH RESOURCES BERHAD) , you would see that their share price gains range from amazing to not too bad in the recent few years.

What happened with utdplt, compared to the rest? And which other company could potentially replicate what utdplt has done in the past few years? I think that's worth studying.

$UTDPLT / 2089 (UNITED PLANTATIONS BERHAD)

$UTDPLT / 2089 (UNITED PLANTATIONS BERHAD)
Research by Apex
HOLD– TP RM 27.21

"No Surprise”

• 1HFY24 net profit were within our expectations at 40.0% of our full year forecast. We anticipate earnings to accelerate in 2H24 as UPL enters its peak production phase.
• Looking ahead, we anticipate further weakness in CPO prices trending towards RM3,800/mt in 2H24 as palm oil production enters the peak cycle.
• Maintained our HOLD recommendation with a TP of RM27.21 based on forward PE multiple of 15.2x and FY24F EPS of RM1.79.

Analyst:
Steven Chong
stevenchong@apexsecurities.com.my

Changes in Sub. S-hldr's Int (Section 138 of CA 2016) - EMPLOYEES PROVIDENT FUND BOARD

Changes in Sub. S-hldr's Int (Section 138 of CA 2016) - EMPLOYEES PROVIDENT FUND BOARD

$UTDPLT / 2089 (UNITED PLANTATIONS BERHAD)

Changes in Sub. S-hldr's Int (Section 138 of CA 2016) - EMPLOYEES PROVIDENT FUND BOARD

Changes in Sub. S-hldr's Int (Section 138 of CA 2016) - EMPLOYEES PROVIDENT FUND BOARD

Changes in Sub. S-hldr's Int (Section 138 of CA 2016) - EMPLOYEES PROVIDENT FUND BOARD

Changes in Sub. S-hldr's Int (Section 138 of CA 2016) - EMPLOYEES PROVIDENT FUND BOARD

Changes in Sub. S-hldr's Int (Section 138 of CA 2016) - EMPLOYEES PROVIDENT FUND BOARD

@boncos Haha, of course it will causes the cycle like this. But quite a good opportunity for those underperforming company to unlock its value. It’s impossible to call $IOICORP / 1961 (IOI CORPORATION BERHAD), $KLK / 2445 (KUALA LUMPUR KEPONG BERHAD), $UTDPLT / 2089 (UNITED PLANTATIONS BERHAD) to do that 😂

Solar Power: A 54x Profit Boost Over Palm Oil – A Chance for Underperforming Companies to Unlock Value?

Large-scale solar ventures (LSS) could enable palm oil producers to generate significantly higher profits per hectare compared to traditional oil palm cultivation, according to Maybank Investment Bank.

Potential beneficiaries include $KLSE-SDG, $KLK / 2445 (KUALA LUMPUR KEPONG BERHAD), and $IOICORP / 1961 (IOI CORPORATION BERHAD), given their advantageous estate locations. Other potential beneficiaries are $GENP / 2291 (GENTING PLANTATIONS BERHAD), THPLANT and $UTDPLT / 2089 (UNITED PLANTATIONS BERHAD).

Maybank highlighted that only planters with appropriately located estates could capitalize on this solar potential. SD Guthrie has already announced its renewable energy ambitions with a target capacity of one gigawatt (GW). The company plans to develop solar farms within its estates, such as the proposed 1,000-acre development in the Kerian Integrated Industrial Park.

However, not all agricultural land is suitable for LSS, as it requires flat-to-gently undulating land near the national grid. Maybank estimates that a 1GW capacity could generate an annual income of RM134 million to RM266 million, significantly higher than the average oil palm operating profit per hectare.

Maybank noted that some planters have leased their land for LSS farms, gaining immediate rental returns rather than waiting for the typical seven-year profit period for oil palm. Maybank also suggested that it might be more financially advantageous for planters to produce solar energy themselves rather than leasing their land.

This shift towards renewable energy aligns with Malaysia's climate change policy and the Malaysia Renewable Energy Roadmap, aiming for renewable energy to comprise 40% of the country's energy mix by 2035, with solar accounting for 7.28GW.

Comment: The potential beneficiaries are primarily owning lands located in Perak, Pahang, and Johor, presenting a valuable opportunity for underperforming plantation companies to unlock value. For instance, In October 2023, Maybank IB highlighted that GENP market capitalization is lower than the value of its land holdings. GENP owns 16,908 hectares of freehold land, worth more than its market cap, with 61% in Johor, 18% in Malacca and Negeri Sembilan, 18% in Kedah and Perak, and 3% in Selangor. These lands, acquired since 1981, are strategically located and estimated to be worth MYR7.25 billion, or 1.5 times GENP’s current market cap. Additionally, the soon-to-be-listed company, $JPG / 5323 (JOHOR PLANTATIONS GROUP BERHAD), operates 23 plantation estates, with 22 in Johor and 1 in Pahang, totaling 59,781 hectares. The strategic locations of JPG's lands offer potential not only for solar projects but also for data centers.

Changes in Sub. S-hldr's Int (Section 138 of CA 2016) - EMPLOYEES PROVIDENT FUND BOARD

Changes in Sub. S-hldr's Int (Section 138 of CA 2016) - EMPLOYEES PROVIDENT FUND BOARD

Changes in Sub. S-hldr's Int (Section 138 of CA 2016) - EMPLOYEES PROVIDENT FUND BOARD

Changes in Sub. S-hldr's Int (Section 138 of CA 2016) - EMPLOYEES PROVIDENT FUND BOARD

Changes in Sub. S-hldr's Int (Section 138 of CA 2016) - EMPLOYEES PROVIDENT FUND BOARD

Changes in Sub. S-hldr's Int (Section 138 of CA 2016) - EMPLOYEES PROVIDENT FUND BOARD

Changes in Sub. S-hldr's Int (Section 138 of CA 2016) - EMPLOYEES PROVIDENT FUND BOARD

Changes in Sub. S-hldr's Int (Section 138 of CA 2016) - EMPLOYEES PROVIDENT FUND BOARD

Changes in Sub. S-hldr's Int (Section 138 of CA 2016) - EMPLOYEES PROVIDENT FUND BOARD

Changes in Sub. S-hldr's Int (Section 138 of CA 2016) - EMPLOYEES PROVIDENT FUND BOARD

Changes in Sub. S-hldr's Int (Section 138 of CA 2016) - EMPLOYEES PROVIDENT FUND BOARD

MONTHLY PRODUCTION FIGURES (MINING / PLANTATION / TIMBER)

Changes in Sub. S-hldr's Int (Section 138 of CA 2016) - EMPLOYEES PROVIDENT FUND BOARD

Changes in Sub. S-hldr's Int (Section 138 of CA 2016) - EMPLOYEES PROVIDENT FUND BOARD

Changes in Sub. S-hldr's Int (Section 138 of CA 2016) - EMPLOYEES PROVIDENT FUND BOARD