(This post was originally published at klse.i3investor.com)
As a business man when I started buying Jaya tiasa basing on my gut feeling and simple business logic. I believe JT is undervalued basing on its total planted area of 62,800 ha which has an open market value of more than twice of its market Cap. Moreover its plywood and timber business have the competitive advantage over other manufacturers in India, China and others because they have to buy logs from JT. JT has a lage forrest reserve.
Why its share price is so depressed for so long? The reason is that it is currently not showing much profit and Funds are not buying. Again as a business man, I must consider this as a buying opportunity if the funds buy I cannot buy so cheaply.
Many so called expert investors recommend me to buy TSH, KLK, UP, IOI and SOP because they are showing much better earning and why should I be so foolish to buy JT when its earning is so poor?
Again as a business man, I naturally think that if every body want them, their prices must have been reflected and it will be very dangerous to buy when at such high prices. How can I make money?
In fact, if you look at SOP’s 2011 annual report you will see that my wife Tan kit Pheng, my nominees Tan Kit Yew, Yap Sung Pang and I owned about 20 million shares which we bought about 3 years ago at below Rm 3.00. We have been selling them at above RM 6 to buy JT. I am still selling today at Rm 6.80.
After having accumulated so much, I begin to be worried in case I am wrong and all my friends could not reassure me. Even Alvin Tai told me not to buy about 6 months ago when I started to buy because of its poor earnings.
Wah ! What a relief? At yesterday Seminar Alvin gave a complete analysis of the future of the palm oil industry and he considers SouthernAcid and JT are the best buys. He said that palm oil price will continue to go up for many more years because most of the palms in Indonesia are older and as a result their production cannot continue to increase. Moreover their economy is fast improving and people want to consume more petroleum fuel and eating oil.
To reduce their import of fossil fuel and save their foreign exchange, the Government has a mandate to replace fossil diesel with 10 biodiesel. That is why tenders are being called for 3 million tons of biodiesel.
For the same reason, Malaysian Government is also mandating the use of biodiesel to 10% of all diesel use.
Now I can say that I have never been surer to double my money in 3 years before with my JT.
I am obliged to tell you that JT is my major investment and I do not need you to buy JT to support the price. You buy at your own risk.
The reasons for writing and posting this piece are: 1. To satisfy my ego as humility is not one of my strong points, 2. Like doing charity, I want to teach you how to fish instead for giving out fish and 3. I seriously believe I have something really good to share with you.