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FINANCIAL CHRONICLE™ » FINANCIAL CHRONICLE™ » FLCH - NAV and Timber stock valuation

FLCH - NAV and Timber stock valuation

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1FLCH - NAV and Timber stock valuation Empty FLCH - NAV and Timber stock valuation Sun Nov 20, 2011 12:26 pm

bakapandithaya

bakapandithaya
Vice President - Equity Analytics
Vice President - Equity Analytics
Ane ape FLCH oya kawadada rupiyal 5 touch karanne, ane ekmanata touch karannako. mata den oya apa wela tyanne.

I hate FLCH & what are the shares u don't like to c in ur pf?

manula


Vice President - Equity Analytics
Vice President - Equity Analytics
Same for me. hope FLCH will give good in the long run. Will wait and see. turn to be investors than gamblers... Hope for the Best

Slstock

Slstock
Director - Equity Analytics
Director - Equity Analytics
@bakapandithaya wrote:Ane ape FLCH oya kawadada rupiyal 5 touch karanne, ane ekmanata touch karannako. mata den oya apa wela tyanne.

I hate FLCH & what are the shares u don't like to c in ur pf?

Please keep sweet talking FLCH into moving. If you talk kinder and sweeter maybe it will listen. ( use word like patiyo, mage pana, sweetie pie etc). Laughing

If it does we all will be victorious. All the best.

Due to plantation issues and negative market trend FLCH is stagnant. But NAV is still over 4.5.



I am confident if one holds this long enough with great patience, they can get double return . How long, can;t say yet. FLCH has more news to come i n the future. )( property , lesuire, more hydro power through hpfl) . Maybe it can move on them also. Yes on earnings there are better shares. But being a low cost share with prospects helps to also create speculation.

Monster

Monster
Senior Vice President - Equity Analytics
Senior Vice President - Equity Analytics
@slstock wrote:
Due to plantation issues and negative market trend FLCH is stagnant. But NAV is still over 4.5.
NAV is heavily backed by it's 7.5 billion worth timber stocks in the balance sheet, which is debatable like TWOD.

Slstock

Slstock
Director - Equity Analytics
Director - Equity Analytics
@Monster wrote:
@slstock wrote:
Due to plantation issues and negative market trend FLCH is stagnant. But NAV is still over 4.5.
NAV is heavily backed by it's 7.5 billion worth timber stocks in the balance sheet, which is debatable like TWOD.

Maybe an accountant in the forum, clarifying this will be useful.

1) How much of an impact does the Timber stock involve in the " Total Equity attributable to Equity Holders"

BTW,
from annual report

The group has engaged an Independent Chartered Valuation Surveyor Mr.K.T.D.Tissera in determining the fair
value of Timber Stocks. The Valuer has valued the Timber Stocks as at 31st December 2010 on a per tree valuation
basis. The group has valued the Timber Stocks at fair value less estimated point-of-sale-costs.
Timber Trees namely Eucalyptus Torariyana, Albezzia, Graveelia, Eucalyptus Grandis, Astonia, Pinus, Toona,
Mahogany, Teak, Jack, Rubber, Nadun, Mango, Pellen, Hora, Domba, Lunumidella, Wal Del and Mara on the
plantations have been taken into consideration in this valuation of Timber Trees.
In valuing the timber plantations, under-mentioned factors have been taken into consideration.
i Age of the tree
ii Maturity age of the tree.
ii Annual marginal increase in growth in timber content.
iv Number of years to harvest in case of trees are matured for harvest.
v Timber content of harvestable trees.
vi The timber content of immature trees at an estimated future harvestable date.
vii The current price of species of timber per cubic foot at the relevant year.
viii Timber plants having below three years of age have not been taken into the valuation.

Slstock

Slstock
Director - Equity Analytics
Director - Equity Analytics
BTW, TWOD Assets are heavily dependent on "biological assets".

Note the below:

"The biological assets are classified as Consumables and
Bearer biological assets. Consumable biological assets are
those that are to be harvested as agricultural produce or sold
as biological assets. Bearer biological assets are those other
than consumable biological assets. Bearer biological assets
are not agricultural produce but, rather, are self-regenerating.
Mahogany, Teak and Sandalwood trees are considered as
Consumable biological assets and Vanilla vines are considered
as Bearer biological assets."

In FLCH case Timber stock can be considered Consumable Biological assets. For valuation, bearer biological assets can be more controversial as it takes in more risk factors? I might be wrong here but am digging deeper.

Monster

Monster
Senior Vice President - Equity Analytics
Senior Vice President - Equity Analytics
Thanks slstock. I would appreciate if we can get more comments from other experts in this regard. NAV of FLCH, MADU and TWOD are heavily backed by above mentioned assets.

I am changing the title. So, others can comment based on the title.

Slstock

Slstock
Director - Equity Analytics
Director - Equity Analytics
@Monster wrote:Thanks slstock. I would appreciate if we can get more comments from other experts in this regard. NAV of FLCH, MADU and TWOD are heavily backed by above mentioned assets.

I am changing the title. So, others can comment based on the title.

Note :
Both MADU and FLCH Timber stock assets can be categorized consumable biological assets. While TWOD has both consumable and bearer assets. So TWOD is even more different


Also note :

"The accounting policies adopted for timber plantations which is a consumable biological asset is stated at fair value less estimated point of sale cost. The policy is adopted based on the international accounting standard 41 Agriculture as there is no Sri Lanka Accounting Standard on timber" MADU

PROPRITER

PROPRITER
Equity Analytic
Equity Analytic
Intrinsic value of this share is at around Rs.4-5.( I'm not a believer of NAV)
We can assume that it makes profits since it pays dividends.
Has no bad reputation as well, mainly performs with plantation sector.

yes I agree with our experts, but as i mention earlier it pays dividends this is a clear indication of the overall profitability

As far as I'm concerned its a slow mover due to heavy trading with little margins. literally it has been a trading stock rather than collecting stock.

But I hope it has a future run.

Lets hope for the best.

10FLCH - NAV and Timber stock valuation Empty Re: FLCH - NAV and Timber stock valuation Sat Jul 19, 2014 6:50 pm

SHARK aka TAH

SHARK aka TAH
Expert
Expert
@slstock wrote:
@Monster wrote:Thanks slstock. I would appreciate if we can get more comments from other experts in this regard. NAV of FLCH, MADU and TWOD are heavily backed by above mentioned assets.

I am changing the title. So, others can comment based on the title.

Note :
Both MADU and FLCH  Timber stock assets  can be categorized consumable biological  assets. While TWOD has both consumable and bearer assets. So TWOD is even more different


Also note :

"The accounting policies adopted for timber plantations which is a consumable biological asset is stated at fair value less estimated point of sale cost. The policy is adopted based on the international accounting standard 41 Agriculture as there is no Sri Lanka Accounting Standard on timber"  MADU

When There is Gray area in Accounting, Accounts Technicians are at will to define the Standards.

11FLCH - NAV and Timber stock valuation Empty Re: FLCH - NAV and Timber stock valuation Sun Jul 20, 2014 1:00 am

VALUEPICK

VALUEPICK
Expert
Expert
According to some industry analysts expects if tea prices stay strong in the coming ten years due to demand and if they harvest their timber plus generate power etc they will have bright future in the coming decade.

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