Jaya Tiasa Holdings Bhd (JTIASA) started off in 1987 as a wood processing company and has since diversified into the palm oil business in 2002, with now close to 70,000 hectares of planted area in Sarawak, said Malacca Securities in the Technical Focus Report.
Besides having 6 timber concession licences covering a land area of 412,478 hectares, the group owns 4 palm oil mills with a processing capacity of 330 megatonne per hour.
Moving forward, earnings growth will be supported by the healthy tree age profile, with 97% of its crude palm oil planted land comprising prime trees and 3% of young mature trees. This will also be backed by a decent crude palm oil extraction rate that registered 18.5% in financial year 2022 versus 18.1% in financial year 2021.
“We foresee crude palm oil prices to remain stable after slumping to a 28-month low at the end of March 2023. This will be anchored by stronger demand from India, which has taken advantage of the recent low prices to ramp up imports in June 2023. Also, the weaker ringgit against the USD also bodes well for the export-oriented palm oil industry,” said Malacca Securities.
Technically, the share price is on a recovery trend since quarter four 2022. The price has gradually formed a higher high and higher low formation and steadied above 200-day simple moving average since mid-February 2023. Following the recent pullback to 200-day simple moving average, the price appears to be in rebound mode.
Coming closer, the price has formed a short-term flag formation breakout above RM0.675 and may target the next resistances at RM0.71-0.74, with a long-term target at RM0.80. Support is pegged at RM0.645, and the cut loss is located at RM0.64.
