Poultry business??

Poultry stocks continue run-up on strong earnings
BY LOONG TSE MIN

AFTER a price run-up last week, poultry stocks hogged the limelight again at the start of the trading week yesterday as chicken and duck breeders dominated Bursa Malaysia's top gainers list, led by Leong Hup Holdings Bhd, which surged 35 sen, or 25.93%, to a year high of RM1.70.
Shares of Farm Best Bhd, which runs poultry hatcheries, rose 8 sen, or 3.83%, to RM2.17; while poultry and eggs farmer LTKM Bhd shares - the cheapest in terms of price-earnings ratio - rose 17 sen, or 13.93%, to RM1.39 on a volume of 394,700 shares.
Leong Hup shares gained 30 sen last week while Farm Best shares started this week 26 sen higher than its Friday close.
Emivest Bhd, a duck breeder and controlled by Leong Hup, has also been running up since the middle of last week, surging from 43 sen on Dec 21 to end last week at 51 sen. The counter surged 10 sen, or 19.61% to 61 sen yesterday.
A remisier said the rally in poultry stocks was due to dissipating fears of a bird flu outbreak and the improving performance of poultry companies.
“The results for the poultry sector in the past three quarters have been remarkable,” he said.
In addition, the price of chicken has stabilised. With the 20 sen rise in the ex-farm price per kg of chicken, a standard dressed chicken (with feet, head and liver) is now at RM5.75 a kg, very close to the ceiling price of RM6.
“Prices are unlikely to change further, and the poultry business remains lucrative,” the remisier added.
Elsewhere, the price of poultry feed - the industry's main input - is expected to fall. The global price of corn, which is a main ingredient in poultry feed, has fallen by 20% in the past six months due to a bumper harvest this year, especially in China.
The remisier said poultry stocks had been priced at a discount since 2003 due to bird flu concerns and their current prices did not reflect the potential of the companies.
“Prices have plunged in the past five quarters and the market had been very pessimistic about the industry as a whole”.
He said it was likely that investors were now more aware of the odds of a bird flu outbreak in Malaysia and were beginning to value poultry counters more fairly.

Link