Date: 30/06/2015
| Source | : | AMMB | ||||||||
| Stock | : | TEOSENG | Price Target | : | 2.70 | | | Price Call | : | BUY | |
| Last Price | : | 1.49 | | | Upside/Downside | : |  +1.21 (81.21%) | ||||
- We maintain our BUY call on Teo Seng Capital with an unchanged fair value of RM2.70/share, based on an unchanged fully-diluted FY15F PE of 13x.
- The Star today reported that the group has put on hold plans to expand its layer farm in Sungai Linggui, Kota Tinggi to focus on developing its five new farms in Yong Peng, Batu Pahat. The decision was made following its recent feasibility study which found that it was no longer cost-effective to develop the land there.
- To recap, the group had earlier said that it would be investing RM50mil to open a new 109.3ha farm in Sungai Linggui, which will be developed over four phases.
- TSC currently operates a total of 22 farms (categorised into brooding, pullet and layer farms), which are all located in Yong Peng. These farms are located in the same vicinity as its supporting facilities, namely its feedmill and paper tray machineries.
- We are not concerned with this delay as this was a longer term plan for the group and our earnings estimates have not yet factored in any contribution from its Sungai Linggui farm. The capex of RM50mil was also not included in management’s guidance of the total of RM200mil over the next five years.
- Our FY15F-FY17F earnings CAGR of 23% is underpinned by the production capacity expansion from its Yong Peng farms (+400,000 eggs/day p.a. to 5.1mil eggs/day in five years). We understand that the group has sufficient land available for the development.
- Looking ahead, we expect TSC to register sequentially softer earnings in 2QFY15 due to the seasonality effect and to a smaller extent, the impact of GST on overall consumer sentiment. That said, we are confident of its earnings picking up in 2HFY15 (as per its historical trend) in view of strong demand during the festive periods (e.g. Hari Raya and Deepavali) and the addition of a new farm.
- We also expect the group’s EBITDA margins to continue expanding, buoyed in part by the soft commodity prices. Additionally, the group is set to reap potential savings from its various cost management activities beginning FY15F. We understand that its biogas plant-ups are progressing well, with the first (of five) plant on schedule for completion this year (savings of up to RM2mil p.a.). The construction of its new feedmill plant and installation of new paper tray machine are also going on as planned.
Source: AmeSecurities Research - 30 Jun 2015
Teo Seng Capital puts Sungai Linggui layer farm on hold Tuesday, 30 June 2015
--26-3-15 价位 rm2.21 ,rsi=81% 经过3个月出的调整,
于30-6-15 价位 rm1.50 ,rsi=15%
Teoseng 7252 rm 1.50 是时候进入了.
--集团已搁置哥打丁宜蛋鸡场计划.
--以专注发展其在yong peng的五个新农场。
未来成长依然在.
a) Teoseng位于永平niwara 超市的旦专区.
b)Teoseng 位于新山士古來八星广塲econsave里的旦专区.
- The Star today reported that the group has put on hold plans to expand its layer farm in Sungai Linggui, Kota Tinggi to focus on developing its five new farms in Yong Peng, Batu Pahat. The decision was made following its recent feasibility study which found that it was no longer cost-effective to develop the land there.
- To recap, the group had earlier said that it would be investing RM50mil to open a new 109.3ha farm in Sungai Linggui, which will be developed over four phases.
- TSC currently operates a total of 22 farms (categorised into brooding, pullet and layer farms), which are all located in Yong Peng. These farms are located in the same vicinity as its supporting facilities, namely its feedmill and paper tray machineries.
- We are not concerned with this delay as this was a longer term plan for the group and our earnings estimates have not yet factored in any contribution from its Sungai Linggui farm. The capex of RM50mil was also not included in management’s guidance of the total of RM200mil over the next five years.
- Our FY15F-FY17F earnings CAGR of 23% is underpinned by the production capacity expansion from its Yong Peng farms (+400,000 eggs/day p.a. to 5.1mil eggs/day in five years). We understand that the group has sufficient land available for the development.
- Looking ahead, we expect TSC to register sequentially softer earnings in 2QFY15 due to the seasonality effect and to a smaller extent, the impact of GST on overall consumer sentiment. That said, we are confident of its earnings picking up in 2HFY15 (as per its historical trend) in view of strong demand during the festive periods (e.g. Hari Raya and Deepavali) and the addition of a new farm.
- We also expect the group’s EBITDA margins to continue expanding, buoyed in part by the soft commodity prices. Additionally, the group is set to reap potential savings from its various cost management activities beginning FY15F. We understand that its biogas plant-ups are progressing well, with the first (of five) plant on schedule for completion this year (savings of up to RM2mil p.a.). The construction of its new feedmill plant and installation of new paper tray machine are also going on as planned.
Source: AmeSecurities Research - 30 Jun 2015
Teo Seng Capital puts Sungai Linggui layer farm on hold Tuesday, 30 June 2015
MUAR: Teo Seng Capital Bhd has put on hold its layer farm in Sungai Linggui in Kota Tinggi and will instead focus on developing five new farms in Yong Peng, Batu Pahat.
Chairman Lau Jui Peng said the feasibility study found that it was not viable to develop the Sungai Linggui farm at this point in time.
“The management sees that it is more cost-effective to open new farms in Yong Peng if we want to increase our daily egg production,” he told StarBiz after the company’s AGM recently.
Another reason was that the new farms would be located near the company’s existing facilities such as the feedmill and paper egg tray plants.
According to Lau, the company would be investing about RM200mil within the next four to five years to open the five new layer farms.
The investment is part of its strategy to position the company as the largest listed layer farming entity in the country.
“When the Yong Peng farms are fully operational, we expect to increase our daily egg production from 3.5 million now to five million eggs by 2018 or 2019,’’ he said.
The company has almost 20 farms in Batu Pahat with over 4.5 million layer birds and with the five new farms, the number of birds would increase to 6.5 million.
Managing director Nam Yok San said with the new farms, the company expects to increase its eggs export to Singapore to between 40% and 45% from between 30% and 35% now.
Malaysia, said Nam, remained an important market given the good demand for eggs, plus the fact that the price of eggs has stabilised in recent years.
“Malaysia has one of the highest egg consumption per capita in the world at 365 eggs yearly as it is among the cheapest sources of protein,” said Nam.
For the financial year ended Dec 31, 2014, Teo Seng Capital made a net profit of RM48.79mil.
In 2013, the company made a profit of RM23.37mil.
于30-6-15 价位 rm1.50 ,rsi=15%
Teoseng 7252 rm 1.50 是时候进入了.
--集团已搁置哥打丁宜蛋鸡场计划.
--以专注发展其在yong peng的五个新农场。
未来成长依然在.
a) Teoseng位于永平niwara 超市的旦专区.
b)Teoseng 位于新山士古來八星广塲econsave里的旦专区.
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