CBIP BERHAD

Segmentation

• Palm oil equipment and engineering division
• Palm oil plantation division
• Retrofitting special purpose vehicle
• Share of results of associates and JV

Result (y-o-y)



Result (q-o-q)


 


Orderbook and detail information

Palm oil equipment and engineering

• Orderbook = RM441 million as of 31 December 2016
• Revenue CAGR = 8.23% (FY13 - FY16)
• PBT CAGR = 9.24% (FY13 - FY16) 
• This division is affected by CPO price but with RM2,500, it bodes well for the prospect of this palm oil engineering division
• Benefits of Modipalm Continuous Sterilization system are
• Higher oil recovery
• Savings in labour and maintenance costs
• Better safety environment
• Superior DOBI quality oil

• Past 3 years, new customers secured including Sime Darby, United plantation, Jaya Tiasa, United Plantations and United Malacca, among others
• External factors that will determine the performance of this division are movement of USD against MYR, CPO prices and steel prices. 
• Management guide that its new zero discharge technology will be a "game changer" moving forward. The zero discharge technology is aimed at improving the management of waste from palm oil mill effluent (Pome), ultimately reducing costs that mill owners would spend on treating waste from the plants. It would also make it easier to comply with environmental requirements for waste management.

Retrofitting Special Purpose Vehicle (SPV)

• Orderbook = RM448 million as of 31 December 2016
• this business division only 49% owned subsidiary
• The SPV division is primarily in bulky supply of specialised vehicles for government authorities and agencies
• The group will pursue the business development with government bodies in Malaysia and overseas
• The risk of this segment is the exchange rate of EUR to MYR. 

Palm oil plantation

• still making loss as age profile of the palm trees are still young. 
• the company has a landbank of approximately 32,000 hectares in Central Kalimantan, where 2,051 ha is planted in year 2016. In total, 9,399 ha have been planted.
• company strategy for this segment is to complete plantation development and work towards commissioning palm oil mill by end 2018/early 2019. This will be a new revenue stream for the group. 
• CPO prices will be the main external factor for this business division.

Oil Palm Plantation - Associates and JV

• The group have effective interest in 7,031 ha of matured oil palm planation with Tradewinds Plantation Group in Sarawak
• Prospects largely depends on CPO prices

Fundamentals
Market Cap = 1.13 bil at rm2.10
NOSH = 524 mil
ROE(%) = 15.12% (TTM)
NAPS = 1.43 
Gearing = Net Cash of RM74.3mil as of 1QFY17
NP margin (%) = 18.6% 


Valuation 
P/E = 9.7x at rm2.10
Dividend payout = 30% of NP
Dividend yield = 2.9% at rm2.10



News

• CBIP to bid for RM2bil worth of jobs abroad for special purpose vehicle division (http://www.theedgemarkets.com/article/cb-industrial-bidding-rm2b-worth-jobs-abroad-special-purpose-vehicles-division)
• CBIP to build palm oil mill in Central Kalimantan for RM39mil (http://www.theedgemarkets.com/article/cbip-build-palm-oil-mill-central-kalimantan-rm39-mil?type=latest)
• Zero discharge tech a game changer for CBIP (http://www.theedgemarkets.com/article/zero-discharge-tech-game-changer-cbip) 

Disclaimer: The above information is NOT a recommendation to buy or sell stocks. They are only for sharing and educational purposes only. Any trade that you undertake as a result of the above information is solely at your own risk. Please consult your own investment advisor before undertaking any investment decision.