Golden Agriculture, AusGroup and Genting SP.

Golden Agriculture failed to move higher today and closed at 54c.  It formed a bearish black candle and with stochastics closer to the overbought region, it doesn't look promising.  On the brighter side, although it has closed lower, it is still above the rising 50dMA.  The 20dMA is turning up.  MFI has formed a higher low and the next session will see if it could continue to do so.  I continue to see resistance at 59c and strong support at 50c. 

AusGroup too formed a black candle as it closed at 58c, supported by the 20dMA.  This is on the back of significantly lower volume.  With the MFI forming a higher high, there might be some momentum left in the upmove.  For stale bulls who missed out on reducing their exposure here in the last couple of sessions, there might still be a chance to do so yet.  Strong resistance is at 63c.

Genting SP continues to weaken as expected.  The highest it got to this week was 98c to give stale bulls a chance to reduce exposure.  Closing at 91c today hugs the lower limits of the Bollinger bands.  The downtrend seems ready to continue as the MFI continues to decline indicating reducing buying momentum.  In the unlikely even that the price moves up in the next session, resistance is at 98c.

Looking at the weekly chart, we see a precarious situation.  Price is hugging the lower limits of the Bollinger bands and the MFI continues to decline just like in the daily chart.  However, what is important is that it has closed below the rising 50wMA which is at 92.5c.  If price is unable to recapture this support level to close at or above 92.5c in the next session, which is the last trading day of the week, the chart would look very ugly.  The ultimate downside target would be 74c, a support level provided by the rising 100wMA.  Although there would be intial support at 80c, such a potentially huge fall in price would be too tempting for short sellers to ignore.

Golden Agriculture: Full year results.

Golden Agriculture released its full year results today.  Compared to the previous financial year, gross profit is down 42% and EBITDA is down 33%.  However, quarter on quarter, its gross profit improved 78% and EBITDA improved 236%.  This is a strong sign that the business is improving strongly.

Its balance sheet is very strong with low gearing.  Nett debt to equity ratio at the end of 2009 was 0.06x and nett debt to total assets ratio for the same period was 0.04x.  Total equity attributable to equity holders was up 18% to US$5,438m.

A dividend of 0.495c per share has been declared.

Golden Agriculture remains the least expensive of all CPO counters listed in Singapore.  It is also the most levered to the price of CPO and with expectations for the price of CPO to continue appreciating over the next two years, Golden Agriculture is likely to do better as well.

The following is taken from the presentation:

Optimistic Outlook for 2010



• Resilient growth in edible oil demand, especially for palm oil
Growing popularity as edible oil in developed and emerging markets
Increasing demand for substitute and alternative uses such as oleochemicals and biodiesel


• The Company is benefiting from the solid industry outlook
Sustained and best-in-class leadership in plantation growth
Actively exploring acquisition opportunities in upstream and downstream
Solid financial position with low gearing and strong cash flows

For the full presentation, please visit:
Golden Agriculture: Year ended 31 Dec 2009