QL associate Boilermech to raise RM11.5m from ACE listing

QL associate Boilermech to raise RM11.5m from ACE listing
Tags: Boilermerch Holdings Bhd | QL Resources Bhd

Written by Daniel Khoo
Friday, 15 April 2011 11:31


KUALA LUMPUR: Boilermech Holdings Bhd will raise RM11.52 million from its listing on Bursa Malaysia’s ACE Market, which is scheduled for May 5.

The company, an associate of food and agriculture group QL Resources Bhd, is a manufacturer of biomass boilers mainly for the palm oil milling industry.

It also serves other industries such as sugar milling, rubber-based manufacturers, food processing and palm oil refineries. QL will see its stake dilute to 35.03% after the listing.

The IPO will see Boilermech conducting both a public issuance and an offer for sale.

Under the public issuance, Boilermech will issue 34.9 million new shares of 33 sen each worth RM11.52 million, of which 19.25 million shares will be allocated for application by private placement to identified bumiputera investors, eight million shares for the public and 7.65 million shares for application by eligible directors and employees.

The IPO will also see an offer for sale of 13.5 million shares each totalling RM4.46 million by its major shareholders of which nine million shares will be privately placed out to bumiputera investors approved by the Ministry of International Trade and Industry and another 4.5 million shares by private placement to identified investors.

Of the proceeds raised for Boilermech, the company will use RM4 million for business expansion plans, RM2.5 million for repayment of its term loan, RM3.32 million for working capital and RM1.7 million to defray listing expenses.

(From left) OSK Investment Bank director/head of equity capital market Gan Kim Khoon, Boilermech Holdings Bhd chairman Dr Chia Song Kun, OSK Investment Bank director of corporate finance Tan Meng Kim and Leong at the launch of Boilermech’s prospectus yesterday.


“The group also intends to utilise RM500,000 of the proceeds towards intensifying its sales and marketing efforts in palm producing and agricultural-based processing countries in Southeast Asia, the African continent and the Central and South American region,” Boilermech said in a statement yesterday.

Directors who are offering for sale of a part of their stakes include Leong Yew Cheong who will see his stake diluted to 15.69% from 20.83% prior to the listing, as well as Wong Wee Voo, whose stake will be diluted to 10.67% from 14.13%. Chia Lik Khai, who is both a director at QL Green Resources Bhd and an executive director at Boilermech, said the investment which was done by QL just before Boilermech decided to list is synergistic and will see long-term benefits for both companies.

In its prospectus, the company highlights its main risk as the dependence on the palm oil industry, which in a downturn could mean lower palm oil production activities, fewer palm oil mills being built, lack of growth in plantation acreage and shrinking demand for its repairs and maintenance services.

Analysts note that with crude palm oil prices at above RM3,000 per tonne and production costs of RM1,200-RM1,400 per tonne, the outlook for the plantation sector remains buoyant. However, they note that labour and land cost issues could limit the sector’s expansion in Malaysia.


This article appeared in The Edge Financial Daily, April 15, 2011.

A Brief Look at QL Resources Bhd.

QL Resources Bhd

Business Description:
QL Resources Berhad is a Malaysia-based company engaged in investment holding and provision of management services. The Company operates in three segments:

1. marine products manufacturing segment, which is engaged in deep sea fishing, manufacture and sale of fishmeal, surimi and surimi-based products; 
2. palm oil activities segment, which is engaged in crude palm oil milling and oil palm cultivations, and 
3. integrated livestock farming segment, which is engaged in the distribution of animal feed raw materials, food related products and livestock farming. 

Its subsidiaries include QL Feedingstuffs Sdn. Bhd, QL Agrofood Sdn. Bhd., QL Agrobio Sdn. Bhd., QL Feedmills Sdn. Bhd., QL Poultry Farms Sdn. Bhd., QL Realty Sdn. Bhd., Pacific Vet Group (M) Sdn. Bhd. and Maxincome Resources Sdn. Bhd.

Current Price (7/1//2011): 5.84
2010 Sales 1,476,396,000
Employees: 3,557
Market Cap: 2,307,804,480
Shares Outstanding: 395,172,000
Closely Held Shares: 243,318,301

Recent Financial Results

Announcement Date		Financial Yr. End		Qtr	Period End		Revenue RM '000		Profit/Lost RM'000		EPS		Amended
22-Nov-10		31-Mar-11		2	30-Sep-10		438,725		36,405		8.43		-
23-Aug-10		31-Mar-11		1	30-Jun-10		384,514		28,207		6.86		-
24-May-10		31-Mar-10		4	31-Mar-10		413,024		27,695		6.45#		-
22-Feb-10		31-Mar-10		3	31-Dec-09		370,133		33,674		7.80#		-

# adjusted for 2010 1/5 Bonus

Estimated EPS for 2011 = 2*15.28 = 30.56 sen
At price of 5.84, it is trading at forward PE = 5.84 / 0.3058 = 19.1 x

Historical
5 Yr
PE range 9.8 - 14.6
DY range 2.5% - 1.7%

10 Yr
PE range 9.2 - 13.8
DY range 2.6% - 1.7%

Year    DPS    EPS
2000    0.0     1.1
2001    1.0     4.6
2002    1.4     5.0
2003    1.4     6.0
2004    1.4     7.5
2005    2.3   10.0
2006    3.6   12.2
2007    4.1   16.0
2008    3.6   20.4
2009    5.8   22.6
1H10   0.0   15.28   NTA  1.400

Capital Changes

2000    1.4/10 Rights @ RM 1.20

2001   1/2 Bonus

2004   1/4 Bonus, 1 to 2 Share Split

2005   1/3 Bonus

2008   1/2 Bonus

2010   1/5 Bonus

QL Resources Bhd

• Riding uptrend in demand for food commodities
Initiate coverage on QL Resources (QL with a Buy recommendation and
target price of RM7.30) based on 20x CY11 P/E. QL’s products will benefit
directly from the rising global demand and price trend for food
commodities. The group is one of Asia’s largest surimi manufacturers and
a Malaysian market leader in livestock feed trading, fishmeal and egg
production.

• Sustainable earnings growth
We have forecast a 3-year forward forecast EPS CAGR of 17.3% (FY11-
13), that will be driven by strong demand for QL’s marine, livestock feed,
poultry products and palm oil, with rising population and disposable
income, as well as the group’s steady capacity expansion. Diversification
reduces earnings volatility by smoothening out cyclicality of its resourcebased activities.

• Assertive regionalisation drive 
QL’s expansion plan is both local and regional, with total group capex set
to increase by 60% in the next 2 years to RM200m annually. The group is
replicating its business model in the ASEAN region with new poultry farms
in Tay Ninh, Vietnam and Cianjur, Indonesia; a new marine plant being
constructed in Surabaya, Indonesia and further planting and palm oil mill
slated for its plantation in Tarakan, Kalimantan, Indonesia.

• Benefits from government incentives for agriculture
QL benefits from the government’s pro-agriculture stance via tax
incentives that translate to a lower tax rate (15% in FY10) and subsidised
diesel for its deep sea fishing operations. The group’s latest venture into
renewable energy is directly in accordance with the government’s
promotion of green technology as contained in the Budget 2011
announcement.

• Further upside to share price 
Despite what seems like expensive valuations, we are bullish on QL as we
firmly believe it deserves premium valuation to peers as well as market.
QL’s next 2 years earnings CAGR of 16.1% is impressive as compared to
Malaysian peers of 5.6%. Furthermore, over the last 10 years, QL’s
average 12-month forward earnings growth is impressive at 23%. At our
target price, PEG ratio is undemanding at only 0.9x based on 10-year
average growth rate.

http://www.ecmmoney.com/wp-content/uploads/downloads/2010/12/QLG_101214_Initiating-coverage.pdf

QL is estimated to need about RM 250 million per annum for FY 2011 to FY 2012 to finance its expansion plans

QL Resources to increase production capacity
Posted on November 5, 2010, Friday

KUCHING: QL Resources Bhd’s (QL Resources) recent proposal to undertake a private placement, share split and issuance of free warrants was aimed at increasing its production capacity in its existing poultry farms in Malaysia.

According to Kenanga Investment Bank Bhd (Kenanga Research), the proposed placement of 20,827,920 shares of RM0.50 each to third-party investors was expected to be completed prior to the proposed share split and free warrants issue, to be completed by the first quarter of 2011.

Assuming a five per cent discount from the five-day weighted average market price of RM5.26, the proposed placement was expected to raise gross proceeds of up to approximately RM104 million.

The research house stated that about 70 per cent of the proceeds from the private placement would go to increasing its production capacity in existing poultry farms in the country apart from developing poultry farms in Indonesia and Vietnam.

In addition, the proceeds would be utilised for QL Resources’ plantation development and oil mill construction in its 20,000-hectare plantation in Indonesia apart from development of its biomass renewable energy projects in Tawau, Sabah.

The group’s proposed share split would entail the subdivision of one existing ordinary share of RM0.50 into two shares held by entitled shareholders to increase affordability of its shares and encourage retail participation.

With regards to the group’s proposed free warrants, the research firm said it would be issued free to existing shareholders on the basis of one free warrant for every 20 existing QL Resources shares after the private placement and share split.

RHB Research Institute Sdn Bhd (RHB Research) in its research report said that it had previously highlighted the group to do a corporate exercise to raise capital as it had estimated a need for about RM250 million per annum for the financial years 2011 to 2012 (FY11 to FY12) to finance its expansion plans.

The research firm sustained a positive view on this move, stating that it would enable the group to lower its net gearing at 54 per cent by the third quarter of FY2011 against a current approximation of 60 per cent.

Is QL Resources in for more M&As?

Monday August 30, 2010

Is QL Resources in for more M&As?

By LEE KIAN SEONG
lks@thestar.com.my

Market is concerned about firm’s financial capability, the prospects of its local and regional expansion

QL Resources Bhd, which announced its merger and acquisition (M&A) exercise last Monday, has been in the spotlight as there is wide speculation going around that the company might be pursuing more M&As going forward.

QL managing director Chia Song Kun said last Tuesday that the company would look into more M&As if there was something in the market that could benefit the company.

However, the questions are: Is the company able to pursue further M&As with its current financial capability and what are the earnings prospects going forward given its aggressive expansion plans locally and regionally?

According to Bloomberg data, the company’s market capitalisation stands at RM1.81bil. Its share prices have risen 40.3% to RM4.56 year-to-date.

The company announced its acquisition of a 23.29% stake in rival company Lay Hong Bhd for total consideration of RM11.6mil last Monday.

Lay Hong is mainly involved in the production of eggs, broiler farming and feedmill activities. It has also ventured into retail business in Sabah and currently operates eight supermarkets under the trade name G*MART.

Meanwhile, QL is a diversified resource and agricultural-based group with three core principal activities – marine products, manufacturing, integrated livestock farming and crude palm oil milling.

The acquisition of Lay Hong, which is in similar businesses, will enable QL and Lay Hong to achieve synergies from feed raw material sourcing arrangements, supply chain networks and operations efficiency.

Kenanga Research is factoring seven months of contribution from the new associate or RM1.7mil for the financial year ending March 31, 2011 (FY11) and another RM2.8mil for FY12 in its forecast.

QL has set aside RM400mil over the next two years to expand its poultry, fishing and oil palm planting businesses.

The company is expanding its business in Vietnam and Indonesia, with investment of US$10mil and US$20mil respectively. It is also investing about RM25mil to build biogas and biomass plants at its Sabah palm oil mill to turn waste into green energy.

It will also spend US$15mil to install a mill for its East Kalimantan oil palm estates.

It was reported last year that the company aimed to triple its profit contribution from palm oil operations by 2015 as it was bullish about the long-term growth outlook for the commodity.

Despite the high capital expenditure going forward, the company said it would continue to pay out 25% to 30% of the group profits as dividends. The market is concerned whether QL can really maintain this policy with such expansion plans.

An analyst from a local brokerage said QL’s management had shown its interest in M&A and always kept its options open.

However, it is hard to judge whether the company would undertake M&A activities soon.

“It would probably acquire layer farms rather than listed entities. With its net profit of over RM100mil a year, the acquisition of layer farms, is possible and the company has been doing that for many years,” she said.

She said given the gearing level of about 0.6 times with a large portion of it for feed trading business, the company still had plenty of room to take up more loans.

“QL has very strong free cashflow generation and I don’t see a problem for it to finance their acquisition. It also has good track record in getting loans,” she said.

According to QL’s annual report, its cash and cash equivalents as at the end of FY10 stood at RM106.1mil, compared with RM68.3mil a year ago. Its loans and borrowings stood at RM215.4mil in FY10, compared with RM163.1mil in FY09.

Another analyst from a local research house said she did not expect QL to conduct further M&A activities in the near-term as the company was now actively expanding its businesses.

“If it is looking for M&A, it might be in the Phase II expansion in its Surabaya plant. It might want to explore opportunities for value-added products and look for acquisition in this area or start a greenfield project.

“However, it would not happen in the near term,” she said.

She said the company would have banks lined up for its expansion or acquisition funding.

On its earnings prospects, Kenanga Research raised QL’s FY11 net profit forecast by 6.3% and 6.6% for FY12 to account for the stronger surimi prices, crude palm oil prices and new earnings stream supported by improving economic conditions.

OSK Research said the construction of QL’s Surabaya surimi plant and day-old chick breeder farm as well as Vietnam livestock farm had begun and the units were expected to start contributing in FY12.

“We are somewhat positive on the expansion in Indonesia and Vietnam as they will boost revenue of its marine products manufacturing segment and Vietnam layer farm by 16.5% and 3.1% respectively, taking into account the time taken to ramp up capacity and production,” the research house said.

OSK likes QL’s resilient business as well as strong management team, which will continue to drive growth in all its three core segments.

It reiterates its “buy call” on QL, given the 13% price upside on the stock.

QL posted slightly higher net profit of RM26.8mil in the first quarter ended June 30, compared with RM22.3mil in the same period last year.

Its revenue was lower at RM356.34mil, compared with RM364.49mil previously.

For FY10, QL registered a net profit of RM115.1mil, 19% higher than RM96.7mil in FY09. Its revenue rose 5.7% to RM1.48bil.

http://biz.thestar.com.my/news/story.asp?file=/2010/8/30/business/6926466&sec=business

QL Resources lays hands on rival

QL Resources lays hands on rival

Tags: Lay Hong Bhd | London Biscuits Bhd | QL Resources Bhd

Written by Koo Jie Ni & Chong Jin Hun

Tuesday, 24 August 2010 12:17

KUALA LUMPUR: The quiet poultry industry is seeing some “egg-citement” with new corporate developments. QL Resources Bhd yesterday acquired 11 million shares or 23.29% of Lay Hong Bhd in an off-market transaction. The identity of the seller was not disclosed but it is believed to be London Biscuits Bhd. All three players are in the food business. The common denominator in the three companies is the need for eggs, which is what Lay Hong offers. Founded in the 1970s and listed since October 1994, Lay Hong is mainly involved in the production of eggs, broiler farming and feedmill activities. It has also ventured into the retail business in Sabah and currently operates eight supermarkets under the trade name G*MART. QL Resources is principally involved in marine products manufacturing, livestock farming and oil palm cultivation. It is the country’s largest fishmeal manufacturer and the largest producer of surimi in Asia. It is a leading egg producer in the country with a daily production of 2.5 million eggs. London Biscuits, on the other hand, is a home-grown manufacturer of cakes and snack foods. According to QL Resources’ announcement to the stock exchange yesterday, it acquired the shares at RM1.05 apiece for a total of RM11.55 million. This values Lay Hong at RM48.55 million, and at a price-to-book value of just 0.52 times based on its latest net assets per share of RM2. Lay Hong’s shares have been rising steadily for the past year. They hit a 52-week low of 60 sen on Sept 18, 2009, and then climbed 117% to reach RM1.30 on July 27, 2010. Both Lay Hong’s and QL Resources’ shares gained four sen yesterday to close at RM1.19 and RM4.59, respectively. A source familiar with the matter said it was Lay Hong’s layer operations, feedmill activities, broiler contract farming and good brand name that sparked QL Resources’ interest. “Additionally, Lay Hong’s corporate results are good, and have grown over the years. Furthermore, QL Resources and Lay Hong are in similar businesses, hence the two companies may be able to achieve synergies from sourcing arrangements, marketing networks and operations,” he said. The source declined to say if QL Resources would increase its stake in Lay Hong or seek board representation. One of Lay Hong's egg-producing farm in Selangor For its fourth quarter ended March 31, 2010 (4QFY10), Lay Hong reported a net profit of RM1 million on the back of a RM95.06 million revenue. The net profit was 81% lower than that of a year earlier. The company said this was mainly due to lower selling prices of poultry products as well as additional provisions for doubtful debts and inventories. Notwithstanding the weaker fourth quarter, it is worth noting that Lay Hong’s full-year FY10 results showed a net profit of RM10.33 million, on revenue of RM388.75 million, a 46% climb from its net profit of RM7.09 million for FY09. While Lay Hong is off investors’ radar screens, QL Resources is a firm favourite among fund managers. The company recently announced a net profit of RM26.8 million, or 6.86 sen per share, for its first quarter ended June 30, 2010 (1QFY11). In July 2010, QL Resources was recognised by The Edge as one of the Top 10 Companies of the Year in The Edge Billion Ringgit Club, in recognition of its profit performance, shareholder value creation and corporate social responsibility. London Biscuits: Sale at a loss of two sen per share While the seller of the stake in Lay Hong has yet to be announced, it is believed to be London Biscuits, which had purchased a substantial interest in Lay Hong in November 2006. Based on Bursa Malaysia announcements, London Biscuits acquired a 20% stake or 9.24 million shares in Lay Hong, representing the bulk of its holding, in two tranches priced at RM1.01 and RM1.14 per share. At a weighted average price of RM1.07, this represents two sen more than the resale value to QL Resources, or an average loss of RM184,800 for the 20% stake. An additional 2.13 million shares were acquired in the open market thereafter. It is estimated that the trades were made at prices ranging from 89.5 sen to RM1.15 per share. Before the divestment, London Biscuits sold 100,000 shares of Lay Hong last month. According to calculations by The Edge Financial Daily, the company now holds 170,000 shares or a small 0.37% stake in Lay Hong, after the sale of its 11 million shares yesterday. According to a source, London Biscuits disposed of its investment in Lay Hong because it felt the business overlapped with its investment in poultry farmer and feed manufacturer TPC Plus Bhd. London Biscuits emerged as a substantial shareholder in TPC in March this year after acquiring a 32% stake or 25.6 million shares for RM7.7 million. A month later, London Biscuits made a voluntary takeover offer for the remaining 54.4 million shares in TPC at 30 sen each or a total of RM16.32 million. It was conditional upon London Biscuits obtaining more than 50% of TPC. The takeover lapsed in June as it failed to secure over 50% of TPC’s shares. Its total interest stood at 46.99% at the close of the offer period. In its quarterly results for the three months ended March 31, London Biscuits registered a net profit of RM4.03 million on the back of revenue of RM50.92 million. Revenue grew by 7% while net profit fell by 12% from the previous corresponding period. The movement was mostly due to the income tax of RM544,000 charged to the company in 3QFY10, whereas in 3QFY09, it reported a tax refund of RM683,000. The company did not offer any explanation for the year-on-year change in performance. London Biscuits closed at RM1.16 yesterday, down four sen. This article appeared in The Edge Financial Daily, August 24 2010.

More acquisitions by QL abroad?

More acquisitions by QL abroad?

Tags: Chia Song Kun | Indonesia | Lay Hong Bhd | organic growth | QL Resources Bhd | Vietnam

Written by Chong Jin Hun

Wednesday, 25 August 2010 15:25

SHAH ALAM: QL Resources Bhd is looking to more “egg-citing” times ahead. Having acquired a controlling stake in a local egg-producing rival, the spotlight now falls on QL Resources’ overseas expansion as it pursues organic growth, and positions itself for potential acquisition opportunities. The major food player, which produces marine products, undertakes poultry farming as well as oil palm plantation operations, expects to register its maiden foreign income from Indonesia and Vietnam in the next financial year ending March 31, 2012 as the company’s operations in these countries take shape. “It’s not necessarily (acquisition of listed companies abroad),” QL Resources managing director Chia Song Kun told reporters at the company’s shareholders’ meeting here yesterday. “It’s too early to give figures,” he added, when asked about the level of foreign income contribution QL Resources hoped to achieve in the future as its overseas expansion gained further momentum. Chia, whose company is Malaysia’s largest egg producer with a 20% market share, said the firm would continue to look at acquisition opportunities abroad as long as there was a strategic fit with its core operations. On Monday, QL Resources announced it had acquired 11 million shares or 23.29% of rival Lay Hong Bhd for RM11.55 million or RM1.05 a share via an off-market transaction. The stake was acquired from London Biscuit Bhd (see related article). At RM1.05 per Lay Hong share, the acquisition price translates into 0.52 times its net assets per share of RM2 as at March 31, 2010, and a trailing price-earnings ratio of just 4.7 times. News of the acquisition created some “egg-citement” for the sector, sending the stocks of both companies to fresh highs yesterday. Lay Hong was the top performer on the local bourse yesterday, surging as much as 61 sen or 51.2% to RM1.80, its highest in over nine years since April 2001. The stock closed at RM1.73 for a gain of 53 sen. Apart from expanding its core businesses through acquisitions, QL Resources may also evolve into an independent power producer with its palm biomass pelletising project, says managing director Chia Song Kun That means QL Resources is already sitting on a “paper gain” of 65% for a one-day investment. QL Resources said the purchase was a good investment which could result in potential synergy between the two entities. An industry source told The Edge Financial Daily that QL Resources saw potential synergy between itself and Lay Hong. This is by virtue of Lay Hong’s layer, broiler and feedmeal operations. The source added that QL Resources also took note of Lay Hong’s financials, and foresees synergistic opportunities in the areas of sourcing, marketing network and operational efficiency. According to him, it is still too early to say if QL Resources would request for a board seat in Lay Hong. For now, it is also uncertain if the acquirer intends to raise its stake in Lay Hong, the source said. Analysts sees strong earnings for QL Resources Analysts said QL Resources’ recently released first-quarter results were within their and consensus estimates. They added that the group was likely to register strong numbers in the years ahead as it begins harvesting the fruits of its expansion. OSK Research Sdn Bhd analyst Law Mei Chi said: “We like QL Resources’ resilient business as well as strong management team, which will continue to drive growth in all its three core segments.” Its marine products division involves deep-sea fishing and the production of surimi-based or fish paste products. The company has factories across Malaysia — in Perak, Johor  and Sabah — as well as Indonesia. The company is also engaged in poultry farming with broiler, breeder and layer operations in Kedah, Selangor, Negri Sembilan, Sabah and Sarawak. It also runs poultry farms in Indonesia and Vietnam. Broilers are bred for meat while breeder and layer operations involve the production of eggs for hatching and consumption purposes, respectively. QL Resources owns some 1,200ha of oil palm plantation in Sabah and 20,000ha in Kalimantan where the company plans to buy more oil palm tracts. TA Securities Holdings Bhd wrote in a note: “Going forward, we expect QL Resources’ growth to remain strong thanks to its experience in manoeuvring the business into profitability even during economically challenging periods. “Although management usually earmarks 10%-15% annual growth, however, we believe QL Resources could comfortably grow at more than 20% in FY12.” TA and OSK have maintained their buy calls on QL Resources with fair values of RM5.30 and RM5.20, respectively. QL Resources’ net profit rose by 20.1% to RM26.8 million, or 6.86 sen a share, in the first quarter ended June 30, 2010,  compared with RM22.32 million, or 5.69 sen a share, previously. Revenue grew 7.9% to RM384.51 million from RM356.34 million. As at June 30, 2010, its net assets per share stood at RM1.35. The company had cash of RM70.72 million and debts of RM401.42 million. This translates into a net debt position of RM330.7 million, or a net gearing of 0.6 times based on the company’s equity of RM526.66 million. Yesterday, its shares advanced as much as nine sen or 2% to RM4.68 before settling unchanged at RM4.59. QL Resources’ Chia told The Edge Financial Daily in an interview in June that the company was setting aside up to RM600 million for capital expenditure (capex) in the current and next two financial years, as it pursued organic expansion and  acquisitions. The company is expected to earmark some RM200 million in the current financial year (FY) ending March 31, 2011,  while FY12 and FY13 may each see capex allocations of between RM150 million and RM200 million. According to Chia, about 40% of the planned capex for the three years is intended to finance expansion of the group’s plantation business which involves downstream projects, including the commercialisation of palm biomass as a source of renewable energy. QL Resources’ marine products, and poultry farming units will each be allocated 30% from the planned budget which would be financed via the group’s internally-generated funds or bank loans. Chia said the company may also raise money via a private placement of new shares, or bond issues. QL Resources to evolve into an IPP? QL Resources’ palm biomass project may potentially see the company evolve into an independent power producer (IPP). Chia said excess electricity generated from the company’s palm biomass pelletising project could be sold to state-owned utility Tenaga Nasional Bhd. “This concept is not green IPP yet,” he said. Last Wednesday, the company said it had finalised the pre-commercialisation stage of the renewable energy project.  This step enables the company to start commercialising the empty fruit bunch-based pellet, via the 40,000-tonne per year plant within its palm oil mill in Tawau, Sabah. QL Resources’ renewable energy initiative essentially uses palm oil mill effluent to generate methane. This in turn is used to generate electricity for the production of the pellets, deemed an alternative source of fuel to hydrocarbons such as coal. The zero-waste renewable energy project, which constitutes a part of the company’s bigger plan to develop palm biomass renewable energy business in Malaysia and Indonesia, will start operations by year-end. QL Resources is certainly moving forward. The company is not only expanding its integration processes within its core surimi, poultry and palm oil divisions, but also extending its tentacles to complementary and offshoot businesses, such as biomass energy.    This article appeared in The Edge Financial Daily, August 25 2010.

A quick look at QL Resources (25.5.2010)

A quick look at QL Resources (25.5.2010)
http://spreadsheets.google.com/pub?key=t8Bl00tf5MqO-9a41aIDekA&output=html

A quick look at QL (22.4.2010)

QL Resources Bhd Company

Business Description:
QL Resources Bhd. The Group's principal activities are distributing animal feed raw materials and food related products and involving in livestock farming. Other activities include deep sea fishing and frozen food processor in Peninsular East Coast and Sabah, manufacture and sale of fishmeal, Surimi (fish paste) and Surimi-based products, as well as crude palm oil milling and oil palm cultivations. It is also involved in providing management services and operating as an investment holding company. The Group owns two independent CPO mills, which include 3,000 acres mature oil palm plantation around Tawau (Sabah) and 30,000 acres of oil palm plantation in Eastern Kalimantan, Indonesia. As at June 2009, the Group produces 2.1 million poultry eggs per day and planted 13,000 acres of oil palms. The Group operates predominantly in Malaysia.

Wright Quality Rating: DBA1 Rating Explanations
















A quick look at QL (22.4.2010)
http://spreadsheets.google.com/pub?key=tAbsXJFFkFhyH8UpFrR-Gpw&output=html


Comment:
Insiders have been regularly acquiring shares in this company.  The company has also been buying back its own shares regularly.

Profile of QL Resources Bhd

Profile of QL

QL is principally involved in

• marine-based manufacturing, 
• integrated livestock and 
• oil palm related activities.

The marine-based manufacturing activities 
(2009: Turnover 324.8 m, PBT 45.0 m, PBT margin 13.85%)
(2008: Turnover 273.1 m, PBT 43.3 m, PBT margin 15.85%)
(2007: Turnover 245.4 m, PBT 37.3 m, PBT margin 15.20%)

• These consist of full upstream and downstream processes such as fishmeal, surimi, surimi-based products manufacturing & deep sea fishing.  
• QL is the largest fishmeal manufacturer in Malaysia.  
• QL is also the largest producer of surimi in Asia and a leading producer of surimi based products in Malaysia.  
• At present, QL has 19 deep sea fishing boats, and three surimi production facilities located in Hutan Melintang (Perak), Endau (Johor) and Kota Kinabalu (Sabah).  
• About 70% of QL's surimi is exported.  The remaining 30% is sold locally.  

Integrated livestock farming 
(2009:  Turnover 804.8 m, PBT 54.0 m, PBT margin 6.7%)
(2008: Turnover 734.5 m, PBT 61 m, PBT margin 8.3%)
(2007: Turnover 657.2 m, PBT 42.2 m, PBT margin 7.57%)

• The integrated livestock activities consist of the distribution of feed meal raw materials and animal health and feed supplements as well as layer farming and feedmilling activities.  
• The layer farming and feedmilling activities are situated in Kota Kinabalu and Tawau (Sabah), Kuching (Sarawak), Pajam (Negeri Sembilan) and Rawang (Selangor).  
• QL also owns an integrated broiler farm in Tawau, Sabah.  
• QL is a leading poultry egg producer in Malaysia with daily production of 2.1 m eggs.  

Palm oil activities 
(2009:  Turnover 268.3 m, PBT 10.9 m, PBT margin 4.06%)
(2008: Turnover 302.8 m, PBT 11.2 m, PBT margin 3.70%)
(2007: Turnover 216.0 m, PBT 9.7 m, PBT margin 4.49%)

• QL owns two independent crude palm oil (CPO) mills located near Tawau and Kunak, which service the oil palm estates in East Malaysia.  These two mills produce 120,000 MT of CPO per annum. 
• It owns 3,000 acres of mature oil palm plantation around Tawau.  
• Besides this, QL has 30,000 acres of oil palm development in Eastern Kalimantan, Indonesia with a planted area of 13,000 (as at 30.6.09).

QL Segmental Financial Data
http://spreadsheets.google.com/pub?key=trnyLVZ4ZzDlGSY-_cnk6fQ&output=html


Source:  SPG Dynaquest