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FINANCIAL CHRONICLE™ » CORPORATE CHRONICLE™ » NAMU/WATA super gain

NAMU/WATA super gain

+16
ErangaDS
nish84
dhanushkacse
Great1
PhilT
lion
Investnow
bkasun
Niwa
sanjulanka
mah2903
K.R
Kaptivajkss
ADVENTUS
Dilshan2020
cseguide
20 posters

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1NAMU/WATA super gain Empty NAMU/WATA super gain Mon Nov 15, 2021 10:38 pm

cseguide

cseguide
Vice President - Equity Analytics
Vice President - Equity Analytics

Both of these counters really attractive in terms of their earnings and future potentials.



1. Namunukula (NAMU) plantation



NAMU last quarter EPS is - RS 23

LAST 6 months EPS- 40

So full year we can expect minimum 93 EPS

Forward EPS - 93

Forward PE - 2.8

TP @ PE 5 - 465

TP @ PE 6 - 558

TP@ PE 7-651



Namunukula (NAMU) plantation consist of 34% oil palm and oil palm prices are sky rocketing these days due to low global supply and these elevated prices will not reduce in near terms.
NAMU/WATA super gain Oil_pa10







If  you see the charts you can clearly see  that prices have gone up further after September. Therefore we can expect next quarter EPS would be much higher than this quarter.

In addition to this Namunukula (NAMU) plantation has 21% rubber rubber prices are high and further increase in future due to restriction imposed due to import banned on rubber. It also consist of 7% cinnamon and also prices are good. In a separate post I stated this share as a mulibagger and achieve 480 RS target.

https://www.srilankachronicle.com/t60340-multibagger-stocks-by-2022-march-31st



That was published before the September result release and after the latest result I am more bullish on this counter. Therefore I expect In a bullish condition this share could achieve 600 Rs price target.



2.WATAWALA(WATA) plantation

WATAWALA(WATA) plantation consist of 73 %  OIL PALM and in addition to that it consist of 4 % Rubber and 22% dairy. liquid milk prices are high and government gave lot of incentives to dairy in its recent budget. In last quarter WATA reported EPS of 5.73 and with sky rocketing oil palm prices I expect it to produce higher EPS next quarter. Thus I expect WATA to produce 25 EPS for full year.

Forward EPS - 25

TP @ PE 5 - 125

TP @ PE 6 - 150
https://twitter.com/Cseguidecse



Last edited by cseguide on Mon Nov 15, 2021 11:01 pm; edited 4 times in total

2NAMU/WATA super gain Empty Re: NAMU/WATA super gain Mon Nov 15, 2021 10:40 pm

Dilshan2020


Equity Analytic
Equity Analytic

Gems

3NAMU/WATA super gain Empty Re: NAMU/WATA super gain Mon Nov 15, 2021 10:47 pm

cseguide

cseguide
Vice President - Equity Analytics
Vice President - Equity Analytics

Dilshan2020 wrote:Gems
yes, They are value gems. Today I sold some of my long term counters  and collected WATA and NAMU. Should not miss this opportunity.

4NAMU/WATA super gain Empty Re: NAMU/WATA super gain Thu Nov 18, 2021 11:26 am

cseguide

cseguide
Vice President - Equity Analytics
Vice President - Equity Analytics

1. What is palm oil?

It’s an edible vegetable oil that comes from the fruit of oil palm trees, the scientific name is Elaeis guineensis. Two types of oil can be produced; crude palm oil comes from squeezing the fleshy fruit, and palm kernel oil which comes from crushing the kernel, or the stone in the middle of the fruit. Oil palm trees are native to Africa but were brought to South-East Asia just over 100 years ago as an ornamental tree crop. Now, Indonesia and Malaysia make up over 85% of global supply but there are 42 other countries that also produce palm oil.

2. What products is it in?


Palm oil is in nearly everything – it’s in close to 50% of the packaged products we find in supermarkets, everything from pizza, doughnuts and chocolate, to deodorant, shampoo, toothpaste and lipstick. It’s also used in animal feed and as a biofuel in many parts of the world (not in the UK though!).


Why is palm oil everywhere?


Palm oil is an extremely versatile oil that has many different properties and functions that makes it so useful and so widely used. It is semi-solid at room temperature so can keep spreads spreadable; it is resistant to oxidation so can give products a longer shelf-life; it’s stable at high temperatures so helps to give fried products a crispy and crunchy texture; and it’s also odourless and colourless so doesn’t alter the look or smell of food products. In Asian and African countries, palm oil is used widely as a cooking oil, just like we might use sunflower or olive oil here in the UK.
As well as being versatile, compared to other vegetable oils the oil palm is a very efficient crop, able to produce high quantities of oil over small areas of land, almost all year round. This makes it an attractive crop for growers and smallholders, who can rely on the steady income that palm oil provides.

NAMU/WATA super gain Compar10

ADVENTUS likes this post

5NAMU/WATA super gain Empty Re: NAMU/WATA super gain Thu Nov 18, 2021 11:32 am

ADVENTUS


Moderator
Moderator

cseguide wrote:

1. What is palm oil?



It’s an edible vegetable oil that comes from the fruit of oil palm trees, the scientific name is Elaeis guineensis. Two types of oil can be produced; crude palm oil comes from squeezing the fleshy fruit, and palm kernel oil which comes from crushing the kernel, or the stone in the middle of the fruit. Oil palm trees are native to Africa but were brought to South-East Asia just over 100 years ago as an ornamental tree crop. Now, Indonesia and Malaysia make up over 85% of global supply but there are 42 other countries that also produce palm oil.

2. What products is it in?




Palm oil is in nearly everything – it’s in close to 50% of the packaged products we find in supermarkets, everything from pizza, doughnuts and chocolate, to deodorant, shampoo, toothpaste and lipstick. It’s also used in animal feed and as a biofuel in many parts of the world (not in the UK though!).


Why is palm oil everywhere?




Palm oil is an extremely versatile oil that has many different properties and functions that makes it so useful and so widely used. It is semi-solid at room temperature so can keep spreads spreadable; it is resistant to oxidation so can give products a longer shelf-life; it’s stable at high temperatures so helps to give fried products a crispy and crunchy texture; and it’s also odourless and colourless so doesn’t alter the look or smell of food products. In Asian and African countries, palm oil is used widely as a cooking oil, just like we might use sunflower or olive oil here in the UK.
As well as being versatile, compared to other vegetable oils the oil palm is a very efficient crop, able to produce high quantities of oil over small areas of land, almost all year round. This makes it an attractive crop for growers and smallholders, who can rely on the steady income that palm oil provides.

NAMU/WATA super gain Compar10
Seems like WATA go on the same journey as NAMU.

6NAMU/WATA super gain Empty Re: NAMU/WATA super gain Thu Nov 18, 2021 3:01 pm

cseguide

cseguide
Vice President - Equity Analytics
Vice President - Equity Analytics

yes WATA is largest palm oil producer in Sri Lanka whereas NaMU is the second largest palm oil producer in Sri Lanka. Both are value gems.

7NAMU/WATA super gain Empty Re: NAMU/WATA super gain Thu Nov 18, 2021 10:26 pm

cseguide

cseguide
Vice President - Equity Analytics
Vice President - Equity Analytics

from NLE  reserach report....
Stronger global palm oil prices and expansions in dairy production to increase the
revenue contribution from agri business: Palm oil contributes to 22% of SUN’s revenue
due to its 92% contribution to Watawala plantation (WATA). WATA’s operating margins
from palm oil increased exceptionally from 50% in FY21 to 63% in 1H’FY22, mainly due to
higher global palm oil prices and increased import duties imposed on imported palm oil,
which enabled local producers like WATA to fetch higher NSA (net selling average).
Palm oil prices remain 36%YoY higher compared to FY21. We expect the prices to remain above pre pandemic levels with labor shortages, production disruptions due to the pandemic and higher demand in the global market. Thus, we expect the revenue contribution to increase to 24% in FY22.

Furthermore, in terms of the dairy segment,WATA intends to increase the daily milk
production by 11% to 20,000 liters per day (from current 18,000 liters per day) through
the increase in number of milking cows to 1000 (from current 800 cows). With the capital
infusion of USD 2Mn by SBI Ven Holdings Pte. Ltd., SUN (/WATA) plans to import 250 cows (127
cows are to be imported before the end of 3Q’FY22) and to enhance capital infrastructure.

Currently, the farmgate milk price is also on the rise with the higher demand for liquid milk
as consumers are shifting to liquid milk due to health concerns and likely milk powder
shortage. Although the higher feed cost could dampen the margins of this sector, we
expect the impact to be minimum with the increased demand and major players of the
dairy segment (Lanka Milk Foods, Pelwatte dairy, Cargills Ceylon and Fonterra Brands
Lanka) being WATA’s customers. Hence, we expect the revenue contribution from agri
business to increase to 26% in FY22 compared to 24% in 1H’FY22.

8NAMU/WATA super gain Empty Re: NAMU/WATA super gain Sat Nov 20, 2021 11:04 am

Kaptivajkss


Senior Equity Analytic
Senior Equity Analytic

Wata

Market Price....100.50

Last Q eps....5.73
Period ended(6 month)....9.29

NAV group...32.94
NAV company...33.10

Stated capital to equity ratio is around 13.. this is after considering all the dividends declared since listed

Interim Div....6

Budget impact...positive...no onetime tax

Dairy sector....improved with foreign participation
Rumour....foreign party is planning to acquire...parent and sub will be listed in JAPAN stock exchange?



Expo

Market Price....229.75

Last Q eps....6.17
Period ended(6 month)....9.38

NAV group...22.15
NAV company...2.55

Stated capital to equity ratio is around 10.5....this is after considering all the dividends declared since listed

Interim Div....1.17

Budget impact.....negative....onetime tax is applicable

Dividend history is very poor compare to WATA.



Should WATA trade at 229.75? If not, why should expo trade at 229.75?

K.R likes this post

9NAMU/WATA super gain Empty Re: NAMU/WATA super gain Mon Nov 22, 2021 10:20 pm

cseguide

cseguide
Vice President - Equity Analytics
Vice President - Equity Analytics

Lot of positive factors
Arrow world palm oil prices sky rocketing (+ WATA + NAMU)
Arrow Rubber import banned (+ for NAMU )
Arrow Liquid milk prices high. WATA dairy farm produces 6.5 litter of annual milk production which is 3.5 % of Total Sri Lankan milk production.
Arrow fertilizer ban relaxed
Arrow Rupee depreciation. positive for export of oil palm , tea , rubber and other crops

Therefore we can expect next quarter higher EPS from both WATA and NAMU. Therefor we can expect WATA 200+ and NAMU 700+ before next March 2022.

Niwa, ADVENTUS, mah2903 and K.R like this post

10NAMU/WATA super gain Empty Re: NAMU/WATA super gain Mon Nov 22, 2021 11:01 pm

K.R


Equity Analytic
Equity Analytic

@cseguide what is your opinion on Sun if WATA is 200+ ?

11NAMU/WATA super gain Empty Re: NAMU/WATA super gain Mon Nov 22, 2021 11:05 pm

mah2903


Equity Analytic
Equity Analytic

My target price for Sun is 50 after Mar 21 financial results published

ADVENTUS and K.R like this post

12NAMU/WATA super gain Empty Re: NAMU/WATA super gain Mon Nov 22, 2021 11:09 pm

cseguide

cseguide
Vice President - Equity Analytics
Vice President - Equity Analytics

K.R wrote:@cseguide what is your opinion on Sun if WATA is 200+ ?
WATA being a subsidiary of SUN we can expect better performance of SUN in future.

ADVENTUS and K.R like this post

13NAMU/WATA super gain Empty Re: NAMU/WATA super gain Tue Nov 23, 2021 9:26 am

ADVENTUS


Moderator
Moderator

cseguide wrote:Lot of positive factors
Arrow world palm oil prices sky rocketing (+ WATA + NAMU)
Arrow Rubber import banned (+ for NAMU )
Arrow Liquid milk prices high. WATA dairy farm produces 6.5 litter of annual milk production which is 3.5 % of Total Sri Lankan milk production.
Arrow fertilizer ban relaxed
Arrow Rupee depreciation. positive for export of oil palm , tea , rubber and other crops

Therefore we can expect next quarter higher EPS from both WATA and NAMU. Therefor we can expect WATA 200+ and NAMU 700+ before next March 2022.


I THINK WE COULD EXPECT 30 - 50% UPSIDE FROM CMP

14NAMU/WATA super gain Empty Re: NAMU/WATA super gain Tue Nov 23, 2021 12:15 pm

sanjulanka


Senior Manager - Equity Analytics
Senior Manager - Equity Analytics

How about Kota....

15NAMU/WATA super gain Empty Re: NAMU/WATA super gain Tue Nov 23, 2021 12:52 pm

Niwa


Moderator
Moderator

Good race between WATA and ELPL. Who will be the first to reach 150?😊😊

ADVENTUS likes this post

16NAMU/WATA super gain Empty Re: NAMU/WATA super gain Tue Nov 23, 2021 12:53 pm

bkasun


Manager - Equity Analytics
Manager - Equity Analytics

KOTA too good.

Their Rubber and Palm oil will do better in coming Qs. Good volumes have been traded in 7-8 range and this will go to double digit number very soon.

17NAMU/WATA super gain Empty Re: NAMU/WATA super gain Tue Nov 23, 2021 3:00 pm

cseguide

cseguide
Vice President - Equity Analytics
Vice President - Equity Analytics

Niwa wrote:Good race between WATA and ELPL. Who will be the first to reach 150?😊😊
If analysis the situation next quarter WATA EPS will be definitely above ELPL according to my prediction. I hope WATA produces a EPS of above 8 + or higher next quarter. fourth-quarter EPS will be also high depending on the elevated palm oil and liquid milk prices. Another final dividend of at least 6 Rs is pending and depends on higher EPS for the next 6 months It is possible to declare a higher amount as a final dividend. So there are lot of plus points for WATA.

Niwa and ADVENTUS like this post

18NAMU/WATA super gain Empty Re: NAMU/WATA super gain Tue Nov 23, 2021 8:57 pm

cseguide

cseguide
Vice President - Equity Analytics
Vice President - Equity Analytics

Today we saw a super run from WATA and NAMU . That is their capacity and very long way to go. Both WATA and NAMU are growth stocks. So do not try to trade with them. Firstly  you have to study them. Then you have to believe them. Then you have to hold them. Then you can get amazing returns from this stocks. When at a time no one tells I told EXPO will be the largest market capitalized company in Sri Lanka. Like wise I like to tell you some prediction about NAMU. That is NAMU will be the first plantation stock which passes 1000 RS golden mark. Do not think that will take years. That is only take months and weeks. So patience is the key. You have to believe these to plantation stock. Sky is the limit. Why I say that , Do not compare oil palm with tea and rubber or other crops. This is refer as Golden crop. Malaysia develop because of this crop. It is such a amazing crop.

19NAMU/WATA super gain Empty Re: NAMU/WATA super gain Thu Nov 25, 2021 11:11 pm

Kaptivajkss


Senior Equity Analytic
Senior Equity Analytic


Watas PAT from palm oil

Sep 2021...1,135,646,000
Jun 2021...692,509,000
Mar 2021...421,211,000
Dec 2020....300,825,000
Sep 2020....470,935,000
Jun 2020....390,667,000
Mar 2020...42,031,000

20NAMU/WATA super gain Empty Re: NAMU/WATA super gain Fri Nov 26, 2021 3:12 am

Kaptivajkss


Senior Equity Analytic
Senior Equity Analytic

EPS for the quarter(Oct-Dec)=6.75-6.9

EPS for the period=16.04-16.19



PAT from palm oil in Sep 2021 is 1,135,646,000.

Palm oil price in July 1......3600 MYR/T
Palm oil price in Sep 30.....4400 MYR/T
Average price....(3600+4400)/2=4000 MYR/T
Total volume from July-Sep=1,135,646,000/4000=283911 units


Palm oil price in Oct 1......4600 MYR/T
Palm oil price in Dec 31.....4600 MYR/T
Average price....(4600+4900)/2=4750 MYR/T
Consider the same volume from Oct-Dec=283911 units

PAT from palm oil in Dec 2021 would be 283911*4750=1348577000
PAT from dairy farm in Dec 2021=14402000(same as in Sep 2021)
PAT from others in Dec 2021=14893000(same as in Sep 2021)
PAT in Dec 2021=1348577000+14402000+14893000=1377872000

Number of shares outstanding=203,308,634

EPS for the quarter(Oct-Dec)=6.75-6.9
EPS for the period=16.04-16.19

21NAMU/WATA super gain Empty Re: NAMU/WATA super gain Sat Nov 27, 2021 9:27 am

cseguide

cseguide
Vice President - Equity Analytics
Vice President - Equity Analytics

Palm oil price high and stable good for both WATA and NAMU.

Rubber price high and stable. Good for NAMU.
NAMU/WATA super gain Rubber10

22NAMU/WATA super gain Empty Re: NAMU/WATA super gain Sat Nov 27, 2021 10:28 am

Niwa


Moderator
Moderator

You always miss out agal and elpl🧐😂

23NAMU/WATA super gain Empty Re: NAMU/WATA super gain Sat Nov 27, 2021 11:30 am

Kaptivajkss


Senior Equity Analytic
Senior Equity Analytic

Just for your info
Agal has negative retained earnings.... considering the current performance, they may need two or three quarters to wipeout.....that is a good sign... ...I don’t find dividend history...had few right issues...so basically...stated capital to retained earning is undefined....

24NAMU/WATA super gain Empty Re: NAMU/WATA super gain Sat Nov 27, 2021 11:20 pm

cseguide

cseguide
Vice President - Equity Analytics
Vice President - Equity Analytics

plantation companies are Dollar earning counters. So they provide hedge against rupee depression. Can expect more income once rupee depreciated in future.

25NAMU/WATA super gain Empty Re: NAMU/WATA super gain Sat Nov 27, 2021 11:36 pm

cseguide

cseguide
Vice President - Equity Analytics
Vice President - Equity Analytics

Palm oil, the global vegetable oil
Palm oil supplies 42.3 percent of the global vegetable oil demand utilising only 14.8 million hectares whereas the soy oil which takes second place produces only 29.8 percent of the demand, but utilises as much as 103.8 million hectares. It is the most productive vegetable oil producer, producing, on average, about four tonnes/ha/year.
Productivity and profitability
The cost of production of palm oil is the lowest of all plantation crops with the highest profit. The net profit per hectare of coconut, tea, rubber and oil palm is Rs. 175,000, Rs. 88,000, Rs. 80,000 and Rs. 612,000 respectively. In order to make the country self-sufficient in vegetable oils, there is thus justification for conversion of 40,000 to 50,000 ha of less productive rubber lands into oil palm.
After World War II, with the global vegetable oil demand increasing rapidly and conventional oils such as coconut, soy and corn not being able to meet the demand, many tropical countries expanded oil palm cultivations, some even stretching into virgin rain forests. In Sri Lanka, we are only considering diversifying less productive rubber lands.
In the 1960s, Malaysia had the so-called 60:40 land policy for rubber and oil palm, realising the massive economic benefits of the latter. However, about five years later, its government revised the policy to 40:60. And small farmers were incentivised to grow oil palm over rubber through several national projects.

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