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My pick for this to cheong up in the next few days....
Surged on news that its wholly owned subsidiary entered into a jv for bio-diesel business with US-based Fulcrum Biofuels.
Blue Sky Golden Fulcrum entered into a joint venture agreement (?JVA?) with Fulcrum Biofuels to initially build and operate a bio-diesel plant in Dumai, Sumatra, Indonesia and market the bio-diesel in the US market.
The bio-diesel plant in Dumai will have a capacity of 400,000 MT per annum and is expected to be fully operational in 2008 with total investment cost including working capital estimated at US$60 million. Production from this bio-diesel plant will be earmarked to supply the growing demand of bio-diesel in the US market.
The strategic partnership with Fulcrum is in line with GAR?s strategy to expand into the global bio-diesel sector, and is expected to provide synergies in accessing the growing US market for renewable fuels.
It said it planned to raise about $772 million from a placement of new shares to fund its expansion.
Golden Agri is controlled by Indonesia's Widjaja family, whose flagship company Asia Pulp & Paper defaulted on some US$14 billion of debt in 2001, leaving international investors with substantial losses.
Golden Agri, which has plantations in Indonesia, said it plans to sell up to 325.3 million new shares at a price of at least $2.4588 per share.
The estimated net proceeds of about $772 million would be used for capital expenditure, "including the acquisition of land, planting of oil palm trees, construction of mills, refineries, bio-diesel plant and other infrastructure," the group said in its statement.
BNP Paribas Capital, CIMB-GK Securities, and OCBC are the placement agents, the firm said. The placement will not be underwritten.
Shares in Golden Agri, which has a stock market capitalisation of about US$3.9 billion, closed at $2.65 on Thursday. The stock has risen 123% so far this year, although some international investors remain wary of the Widjaja family's companies.
The firm told Reuters earlier this year that it planned a bond issue or structured loan some time in 2007. Moody's, which gave Golden Agri a Ba3 credit rating in Sep 2006, said at the time that the group was "constrained" by the history of debt restructuring in the Widjajas' empire.
The credit rating agency warned at the time that Golden Agri's "complicated family-controlled organisational structure could give rise to the risk of funds being channelled to support affiliated companies."
Golden Agri and a related firm lost hundreds of millions of dollars in 2001 after depositing their cash in a Widjaja family bank in the Cook Islands.
The Cook Islands bank couldn't repay the funds because it had lent the money to other Widjaja businesses. It took the family several years to repay the funds.
All GOOD counters have equal chance of cheonging. It is whether the BBs want to play or not. My advice is to buy companies that has good fundamentals when others have not noticed yet and wait for your turn. Never buy using margin or contras. AFP maybe one of these counters.
Choohian
I have received the report. Thank you.
It is one of the world?s largest privately owned oil palm plantation companies.With a total planted area of 307,000 hectares located in Indonesia, GAR operates 31 palm oil processing mills, 2 refineries and 4 kernel crushing plants.
The Company?s primary activities include cultivating and harvesting of oil palm trees; processing of fresh fruit bunch into crude palm oil and palm kernel oil; and refining CPO into value-added products such as cooking oils, margarine and shortening.
GAR?s operations in China include refineries, port and oil-seed crushing facilities in Ningbo and Zhuhai.
The Group?s revenue in 2006 was US$1.1 billion.
ya cheong up 30cent to 2.08 liao !! wow so good ...
saw this news in http://singaporestockmarket.blogspot.com
BNP Paribas targets $3.8!!!!
Asia?s largest and cheapest CPO play
BUY ? an under-researched gem
We initiate coverage on Golden Agri-Resources (GGR), Asia?s largest
listed oil palm plantations company, with a BUY. GGR, which derives
about 90% of its gross profit from oil palms, has yet to be fully
appreciated by analysts. This is reflected in its 2007 P/E of 8.1x, a 33%
discount to its Indonesian peers? 12x. We believe GGR is cheap, largely
because it is listed in Singapore and its plantations assets sit in
Indonesia ? hence, it has not received the same attention from analysts
as its Malaysian and Indonesian peers. Key operational highlights:
1.
Asia?s largest listed integrated oil palm plantationGGR is Asia?s largest listed integrated oil palm play and is controlled
by the Sinar Mas group. It has 307,000 ha of planted area of which
88% are mature, averaging 11 years! Thus, as trees mature, the
average oil extraction rate of 23.3% (the highest among Indonesian
plantations) will rise to 24.5% by 2009 ? driving earnings.
2.
Aggressive plantations expansionNew plantings of 40,000ha pa will raise planted land bank from
307,000ha to 427,000ha by 2009. Management is committed to
planting > 40,000ha of oil palms pa over 2007-09.
3.
The most tech savvy plantations playerThe most advanced among plantations in Asia in integrating
proprietary ?state-of-the-art? technology with the labour-intensive
production process monitoring and control. SAP drives a GPStagged
plantations data gathering, updated daily, which enhances
the ability to prioritise issues early and implement improvements.
Attractive valuations ? a steep discount to its peers
While GGR?s share price has risen 49% on mostly retail activity since
January 2007, its valuations are still attractive and it is at an undeserved
discount to its peers. While GGR?s plantations are in Indonesia, its
Singapore listing calls for a lower risk premium than its Indonesian
peers. Our fair value target P/E of 17.5x is based on the mid-target P/E
between Malaysian (19x) and Indonesian (16x) plantation plays. We
believe increased analyst coverage will fuel GGR?s share price re-rating
towards our TP of SGD3.80, which implies a 116% potential upside over
the next 12 months.
China oil major CNOOC will join palm oil producer PT SMART Tbk and a Hong Kong energy firm to invest US$5.5 billion in producing biofuel in Indonesia, SMART said on Tuesday, a major bet on the growth of green fuel.
The deal, details of which have yet to be revealed, would rival the scale of Indonesia's biggest liquefied natural gas project and China's top overseas oil investments, potentially giving both nations a big boost in their efforts to secure alternative fuel sources.
Thought to be one of the biggest single biofuel investments worldwide, the deal will see SMART, state-owned China National Offshore Oil Co. and Hong Kong Energy Ltd. spend US$5.5 billion in three phases over eight years to develop crude palm oil-based biodiesel and sugarcane- or cassava-based bioethanol.
"This project will be carried out in Papua and Kalimantan where the regional governments have reserves of (about) one million hectares of land," said SMART, a subsidiary of Golden Agri-Resources.
AFP said it is proposing a capital reduction of $806.74m by distributing all the shares it holds in the share capital of Golden Agri-resources to its shareholders. The proposed distribution ratio is 390 GAR shares for every 1,000 shares of AFP held.
Following the completion of this distribution, AFP will hold a 55.02% stake in the GAR Group, which will cease to be a subsidiary of AFP but will remain listed on the mainboard of the Singapore Exchange.
"The purpose of the distribution is to improve shareholders' value through the streamlining of the company's operations along its core competencies," AFP said in a statement.
AFP is mainly engaged in construction and property development business, while its listed subsidiary GAR is engaged in the agriculture business.
In addition, AFP noted that this distribution will enhance the liquidity of GAR shares as public shareholding in GAR is expected to increase from 25. 07% to about 43.91%, AFP added.
May have rose on news of Minamas's IPO.
Malaysian plantation and property firm Kumpulan Guthrie is looking to raise US$200-US$300m by listing its Minamas Indonesia unit next year, as it ramps up palm-oil production. State-controlled Guthrie, with two-thirds of its plantations in Indonesia, plans to sell up to 49 percent of Minamas to seize on rising palm oil prices, buy more land and cut its debts.
Guthrie is planning to list Minamas as early as July next year, probably on Indonesia's Jakarta Stock Exchange, group Executive Director Abdul Wahab Maskan said in an interview. "For the last two years and going into the third year, investors will see that what we promised to deliver on Minamas, we delivered," Abdul Wahab said on Friday. "That's very important. It gives confidence to people when we start talking about forecasts."
Assuming Guthrie sells 49%, proceeds would value Minamas at US$410-US$610m, or around 10-16x Minamas' 2005 operating profit of 146m ringgit (US$40m) - a price Abdul Wahab says is justified as its Indonesian plantations mature and yields improve. He declined to discuss the size of the stake it planned to sell, but said it would seek to retain control.
Malaysia's top planter, IOI Corp. , trades at around 23x current earnings, with Guthrie at around 21x.
One analyst said the implied valuation is justifiable. "Yields are coming up in Indonesia. The plantations there are commanding a high premium and the listed sector is not as deep as in Malaysia," said Niklas Olausson, research head of CLSA. "That's what will explain the high potential historical multiples. If you are bullish on crude palm oil prices I would imagine that this IPO will be taken up quite easily. There's a potential growth story there."
A large portion of its Indonesian plantations are still young matured palms below 10 years of age, but production is expected to increase significantly over the next few years as it shifts towards the prime age in 2007, Guthrie said in its annual report.
The group is likely to produce 1.1m tonnes of crude palm oil in 2006, rising to 1.5m tonnes by 2010 as more Indonesian plantations come onstream, Abdul Wahab said.
Guthrie has been in the region since 1821 when Alexander Guthrie set up the Guthrie agency house in Singapore. The IPO cash will help Guthrie cut debt of some 2.8b ringgit to about 2.5b ringgit next year, Abdul Wahab said.
The cash from the listing would also help pay for a 20% expansion in plantation land in Malaysia, where Guthrie has about 100,000 hectares already planted.
But Abdul Wahab suggested he was happy with the size of Guthrie's Indonesian estate of roughly 200,000 planted hectares, describing it as "suitable". The IPO cash, combined with strong earnings, will also give Guthrie freedom to raise its dividend payouts, Abdul Wahab said.
It currently has a gross dividend payout of about 10%. Guthrie has a relatively small following among foreign fund managers, with a very small free-float. State investment firm Permodalan Nasional Bhd controls it with a 73.5% stake. Stronger Indonesian contributions and higher palm-oil prices helped lift Guthrie's earnings by 17% to 32.9m ringgit in its second quarter ended June 30.
Abdul Wahab said crude palm oil prices, up some 12% this year, should average about 1,500-1,600 ringgit in 2007. Guthrie could set up a biodiesel plant in Indonesia because the country offered abundant palm-oil supplies. Strong diesel prices also made biodiesel an attractive alternative there.
A planned sale of its Guthrie Corridor Expressway, a 25-km toll road on the outskirts of Kuala Lumpur, on which it carries a net book value of slightly over 700m ringgit, may not go through, he said. "The bottom line is that if we cannot get the price and terms that is good for shareholders, then we will continue to search, look after it, operate it," he said. "There's always next round."