Question:

If I am given a choice between Kuala Lumpur Kepong Berhad (KL Kepong) and Batu Kawan Berhad (Batu Kawan), which of the two would I invest today?

Answer:

First and foremost, this is an age-old question often asked by investors who are into plantation stocks. This question arises because Batu Kawan is a substantial shareholder of KL Kepong with 47% shareholdings and earns most of its income from it. In other words, there are two stocks which are profiting from almost, if not all, the same plantation assets.

Second, before picking, I believe we must first understand their similarities. For instance, Tan Sri Dato’ Seri Lee Oi Hian and his brother, Dato’ Lee Hao Hian are major shareholders and key directors of both KL Kepong and Batu Kawan. They remain at the helm of leadership for both companies.

Prior to 2013, Batu Kawan has accounted for KL Kepong’s …