JAYA TIASA HOLDINGS BERHAD

Many people are paying attention to JTIASA recently, thanks to a person.

A successful stock market investor and businessman, Mr. Koon Yew Yin has publicly promoted JTIASA in his blog for this counter's potential of making a lot of money from it's palm oil and timber businesses in the coming 10 years.

Mr. Koon and his family have already bought in more than 40 million JTIASA's shares up to now, approximately 4.2% of the total shares. The market predicts his entry price is between RM1.80 to RM2.30. Thus, he has invested more than RM82M in total.



According to him, JTIASA is worth to invest due to:

1. 70% of JT plantation are form by young trees, ranging 5 to 8 year old. Thus, the profit from palm oil business will be increasing and recurring for the coming 10 to 12 years. 
2. Reviving CPO price from the bottom and the earning will definitely improve in tandem with the increasing yield.
3. Largest forest for timber business in South East Asia and having concession with Sarawak Government for 20 years, which can supply for the another 5 to 10 years.
4. Share price depressed for a long period and has not reviving, due to the company spending a lot of money for growing palm oil business, i.e. plant trees and soying, etc. Mr. Koon is not worry about the high debts from JTIASA, as it will gradually reducing due to the trees planting activity is around the corner and the cost of nurturing the plants are decreasing.
5. Majority of the shares owned by Tiong family, around 24% in total. Thus, the family will still take care of the business like their own business.
6. Based on his success experience on investing palm oil companies, i.e. KULIM, TWSPLNT and RSAWIT.

I did a thorough research at JTIASA last few weeks ago. In fact, what Mr. Koon shared may be right. However, the high PER and debt are scaring and concerned by most of the investors. Furthermore, most of the analysts think that JTIASA current share price has fully valued and they are recommending other plantation counters as they are having a cheaper valuation than JTIASA. On the other hand, timber price is already at it's peak but the earning is not improving much.

In my opinion, I'm not really sure how far JTIASA can goes once it's trees are mature and yield at it's peak. But definitely it's not within these 2 years, as it's now only 5 to 8 year old. At this stage, the nurturing cost will be starting to reduce and soon after 1 or 2 years and it's 80,000HA has almost finished planted. You will see much profit made by JTIASA because of significant cost reduction and the recent improving of CPO price. 

Compare to TAANN, the most valuable thing I see in JTIASA is it's aggressiveness of planting the palm oil trees at it's landbank over the years even though it is raising it's debt to do so. In fact, it is the best time to plant or replant the trees as the CPO price is at it's bottom over the past 2 years. 

As a result, JTIASA faith is now looking at the CPO price. If it continues to go up for the coming 1 to 2 years, JTIASA will be the star again. If the price is remains or shrinking, then it would be better to look for other industry for better return. 

Based on my findings and Mr. Koon recommendation, so far I have invested 9,500 units on JTIASA at average price of RM2.31 earlier. With the inflation going up like nobody business, I believe CPO price will climb further!

What do you think?

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