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Sri Lanka Equity Forum » Stock Market Talk » RPCs in quandary over 5000 acres rule

RPCs in quandary over 5000 acres rule

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1 RPCs in quandary over 5000 acres rule on Sun Nov 13, 2016 8:04 pm

ice4083


Senior Equity Analytic
Senior Equity Analytic
http://www.sundaytimes.lk/161113/business-times/rpcs-in-quandary-over-5000-acres-rule-216602.html

this was a good point in the budget. lot of RPCs maintain a heavy head offices cost in Colombo, when elderly planters in the estates become too old and sick they are transferred to the head office to spend the rest of their days in a comfy chair in an nice AC room. RK will have lot of opposition buy by doing this, if this goes through there will be smaller manageable plots spread over a wide section of owner ships. No effect on the share prices yet.

2 Re: RPCs in quandary over 5000 acres rule on Tue Nov 15, 2016 12:51 am

Yahapalanaya

Yahapalanaya
Senior Vice President - Equity Analytics
Senior Vice President - Equity Analytics
WATA,ELPL are continuing it's profit trend because of palm oil.Now tea prices also picking up.Good to watch BALA,KOTA too in coming quarters.

3 Re: RPCs in quandary over 5000 acres rule on Tue Nov 15, 2016 8:51 am

jayathu


Assistant Vice President - Equity Analytics
Assistant Vice President - Equity Analytics
Invest in ELPL and WATA. This rule is applicable to one company holding 5000 each maximum. Most of these companies will put a subsidiary and mitigate this issue.

KOTA wont recover anytime soon yahapalanaya. Most of there Acreage is Rubber. Tea most of the companies are break-even or slightly loss. KOTA has a big finance cost which is at a absorb rate due to there debenture issue two yrs ago. Dont invest in kota which i have saying for last two yrs. As you can see it has come down from 45level to 9bucks level. It'll be a penny stock within two yrs if rubber doesn't recover. They're selling off there investment assets to finance capital requirements and for cash flow requirements.

4 Re: RPCs in quandary over 5000 acres rule on Tue Nov 15, 2016 9:23 am

EquityChamp

EquityChamp
Moderator
Similarly the CFLB group except LITE and CWM. All others are in dark at the moment.

5 Re: RPCs in quandary over 5000 acres rule on Tue Nov 15, 2016 11:27 am

D.G.Dayaratne


Senior Vice President - Equity Analytics
Senior Vice President - Equity Analytics
Most of plantation companies are badly managed and lot of corruptions

No future for plantation companies under presen circumstances in general

There may be some exceptions

6 Re: RPCs in quandary over 5000 acres rule on Tue Nov 15, 2016 1:41 pm

jayathu


Assistant Vice President - Equity Analytics
Assistant Vice President - Equity Analytics
No point talking about LANKEM group. All there companies are making losses other than CWM. BAd management is the main issue

7 Re: RPCs in quandary over 5000 acres rule on Tue Nov 15, 2016 3:20 pm

darrenadanm


Equity Analytic
Equity Analytic
@D.G.Dayaratne wrote:Most of plantation companies are badly managed and lot of corruptions

No future for plantation companies under presen circumstances in general

There may be some exceptions


is it really the corruption and bad management is the issue ? i thought its a macro factor in world market...

if so what plantation companies are exception from these corruption and bad management ? what are the best plantation companies ?



Last edited by darrenadanm on Tue Nov 15, 2016 3:47 pm; edited 1 time in total

8 Re: RPCs in quandary over 5000 acres rule on Tue Nov 15, 2016 3:43 pm

jayathu


Assistant Vice President - Equity Analytics
Assistant Vice President - Equity Analytics
ELPL n WATA is the best managed.

Main issue was macro economic and mismanagement made plantation companies to make huge losses. ELPL n WATA diversified there plantation without depending on one or two crop. Lankem didn't diversify there crop and only did rubber n tea. There management was naive to think rubber n tea will be stable.

Look at ELPL, they diversified into Palm oil, then Hydro power. when raw tea prices were coming down they went into value added tea and partnered with a Chinese tea company to export branded tea to china. Look at there profits from there joint venture. It's delivering impressive results to there bottom line. There Main source of revenue is tea, but that's running at a small loss. Palm is giving them huge profit and tea joint venture also.
Just imagine if tea prices turnaround, how well this company will be doing.
CMP 19
EPS 6 months 1.90
Annulaised PE ratio is 5
NAV 48

I have bought ELPL, so look at there financials and make up your mind. Above reasoning is why i invested in ELPL.

9 Re: RPCs in quandary over 5000 acres rule on Tue Nov 15, 2016 6:06 pm

Yahapalanaya

Yahapalanaya
Senior Vice President - Equity Analytics
Senior Vice President - Equity Analytics
@jayathu wrote:ELPL n WATA is the best managed.

Main issue was macro economic and mismanagement made plantation companies to make huge losses. ELPL n WATA diversified there plantation without depending on one or two crop. Lankem didn't diversify there crop and only did rubber n tea. There management was naive to think rubber n tea will be stable.

Look at ELPL, they diversified into Palm oil, then Hydro power. when raw tea prices were coming down they went into value added tea and partnered with a Chinese tea company to export branded tea to china. Look at there profits from there joint venture. It's delivering impressive results to there bottom line. There Main source of revenue is tea, but that's running at a small loss. Palm is giving them huge profit and tea joint venture also.
Just imagine if tea prices turnaround, how well this company will be doing.
CMP 19
EPS 6 months 1.90
Annulaised PE ratio is 5
NAV 48

I have bought ELPL, so look at there financials and make up your mind. Above reasoning is why i invested in ELPL.
Agree.WATA too did same.It diversified into Dairy farm joint venture.WATA & ELPL will show robo result in coming quaters with current tea price and palm oil price.

For those who want to take risk try BALA too.It has net asset value over 93.Current tea prices it could profit making company.

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