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I originally viewed TDM as a plantation Group with a healthcare arm. About 17 years ago, the healthcare segment only accounted for about 16% of the Group revenue. The Group plantation operations then was mainly in Malaysia and this accounted for a large part of the Group’s revenue.
The Group decided to expand it plantations segment by venturing to Indonesia. It took several years to get this going such that the maiden revenue from the Indonesian plantation was only in 2013. By then the Group had “..earmarked that the growth of the plantation operations will be in Kalimantan.”
But things began to go wrong with the lndonesian operations soon after. The losses and impairments got so bad that the Group announced its plans to sell the Indonesian assets in 2019. By 2023 it was still trying to complete the sale of its Indonesian assets.
If not for the healthcare segment, which had grown to account for 56 % of the Group’s revenue in 2023, TDM would be in a worse shape.
Moral of the story? Beware of companies announcing expanding into foreign countries as the Malaysian experience may not always be transferable.
Given the poor plantation segment performance, the market took a dim view of the company despite a growing healthcare segment. I guess the market is still waiting for TDM to prove that it can recover from the Indonesian lesson.
Refer to “Is TDM a value trap?” if you want to bet on its turnaround. https://www.i4value.asia/2024/04/is-tdm-value-trap.html#more
