TSH sold.

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:

• 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.

Investment period about 3.3 year.
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).

TSH Resources BHD - strong growth ahead.

(I bought 3000 units of TSH at RM1.80, in early July.)

There are three business segment in TSH -- palm oil, cocoa, and wood products. While the palm-oil segment are growing exponentially, the other two segments were facing difficulties in recent years.

In 2009, palm-oil business had contributed about 80% of TSH's revenue, and 100% of its profit. Hence, we can say that the future of TSH is relying on palm-oil. So, I simply ignore the wood & cocoa segments, concentrate my analysis on its palm-oil business alone.

Let's take a look at the historical figures of THS' palm-oil segment: (RM million)

	Revenue	Profit
2001	83.0	14.5
2002	143.8	19.6
2003	233.5	35.8
2004	272.7	41.9
2005	318.0	35.7
2006	358.3	48.9
2007	575.7	85.3
2008	814.5	88.5
2009	784.2	118.6

During these years, the palm-oil business was growing at a CAGR of 30%.

In recent years, TSH had been aggressively purchasing plantation-land in Indonesia. Today, its accumulated land-bank area already closed to 100k hectares. Among these, only 25k ha had been planted with oil-palm trees. And in these 25k ha planted area, 13k ha are newly planted trees, age only 1~3 years old (i.e. non-matured). The remaining 12k ha trees are in prime matured stages, age 4~20 years.

Hence, we can predict that the oil-palm production of TSH is going to doubled within 3 years, which translated into a CAGR of > 25%.

Then, according to its management, current TSH's expansion plan is to plant up to 5000 ha of new estate per annum. If this target is achieved, then the matured-estates of TSH will be growing at 20% p.a. pace for another 3 years.

Seeing the huge land bank behind it, I believe that TSH will keep its double-digit-growth for many years, deep into the future.

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