Sunday, August 12, 2012

Is TDM going the way of EPIC?

For the half year period of fiscal year of 2012, TDM made 11.35 sen per share. This compares dismally with the EPS of 26.58 sen made in the corresponding period of 2011. Indeed TDM will be hard pressed to maintain its 2011's single-tier dividend payment of 21.5 sen per share for fiscal year 2012. I doubt it will pay more than 15 sen dividend for fiscal year 2012.

Many plantation counters have reported poor result for the first 6 months of 2012. TDM is among the worst. I wonder why this is so. I mean why should it be among the worst. Is TDM trying to depress its share price? Whether it did that or not, the stock is down 21.98% from its high of 5.05 set on May 03, 2012. The stock closed at 3.94 last Friday (Aug 10, 2012)

Last year EPIC was privatized by the Terengganu government (TG). Presently, TG owns 63.17% of TDM. Will TG privatize TDM as well? Most likely it will. If it decides to do so, probably it will offer RM4.75 for each share of TDM. This being the amount it values for each share issued to acquire a piece of land for RM16.9m. 

I don't think privatization for TDM will happen in the near future. Perhaps it will happen next year. Really, it is anybody's guess.

If you are about to dispose of your TDM shares, don't forget to consider the above factors before you decide on a price you wish to sell.

As usual, you listen to me at your own risk.