Decided to sell all my holdings on TSH.
Reasons:
1. high debt ratio.
As a result of quick expansion during past few years, the debt of TSH had reach ceiling high. This was not a big problem for me, until I saw the company going through several rounds of private-placement to raise new fund. As a shareholder, I saw my interest in the company being diluted... and what worrying me is, seeing the continuous expansion ahead, this dilution could go on and on in next few years.
2. Profitability affected severely by falling CPO price.
CPO price had been in down-trend since 2011, and "stabalized" at RM2100~2500 in the past few months. I was expecting that the high growth in FFB production of TSH could support its profit from this impact, but it seems that I was wrong. Now I'm in doubt whether the company could still be profitable should the CPO price fall below RM2000.
EPS of the company is around 9sen/share now, which means that its shares is currently traded at a level of PE>30. Looking at its ever weakening fundamentals, I think this is over-valued, and it's time to exit.
x x x
Summary of my investment in TSH:
Average return rate ~42% p.a.
x x x
After selling TSH, there would be no plantation stocks in my portfolio.
(I wont see PPB & CBIP as plantation-stock although they have some business in oil-palm).
Reasons:
1. high debt ratio.
As a result of quick expansion during past few years, the debt of TSH had reach ceiling high. This was not a big problem for me, until I saw the company going through several rounds of private-placement to raise new fund. As a shareholder, I saw my interest in the company being diluted... and what worrying me is, seeing the continuous expansion ahead, this dilution could go on and on in next few years.
2. Profitability affected severely by falling CPO price.
CPO price had been in down-trend since 2011, and "stabalized" at RM2100~2500 in the past few months. I was expecting that the high growth in FFB production of TSH could support its profit from this impact, but it seems that I was wrong. Now I'm in doubt whether the company could still be profitable should the CPO price fall below RM2000.
EPS of the company is around 9sen/share now, which means that its shares is currently traded at a level of PE>30. Looking at its ever weakening fundamentals, I think this is over-valued, and it's time to exit.
x x x
Summary of my investment in TSH:
- Aug-2010, bought 3000 shares at RM1.80, cost about RM5,428.
- Jun-2011, dividend 6.0sen per share.
- Dec-2011, Bonus Issue 1:1.
- Jun-2012, dividend, 3.5sen per share.
- Jun-2013, dividend, 2.5sen per share.
- Nov-2013, sold 6000 shares at RM2.82, proceeds RM16,833.
Average return rate ~42% p.a.
x x x
After selling TSH, there would be no plantation stocks in my portfolio.
(I wont see PPB & CBIP as plantation-stock although they have some business in oil-palm).
1 comment:
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