QUOTE(simplesmile @ Apr 7 2009, 01:45 PM)
Hahahaha. Painful la.. so many WTF-ing me.
Anyway, I didn't jump into LCL blindly. I've started to notice LCL about 1 week ago, after I bought Maybulk. At that time, LCL was already off its low. I was waiting for it to go down again after the UMNO elections. But it shot up instead.. until yesterday. So, if I don't buy now, maybe later the boat will leave without me. Sold my Maybulk to buy LCL.
Looking at their annual reports, they have been paying dividends of 10 sen (pre-tax, non tax-exempt) under the old tax structure. In 2008, maybe they won't pay dividends to conserve cash. If going forward, they continue to pay 10 sen (tax-exempt under the single tier structure), then it would be 18% dividend yield.
If I didn't plan to buy a property in these few months, I would have bought another 54,900 shares, making it a nice total 90,000 shares. Wah.. imagine every year RM9k dividend. Better than my bonus.
i would like to highlight about the 10 sen dividend pay by LCL. After the share split last year, i dont think LCL will maintain 10 sen dividend. 5 sen is more likely.
Report from OSK
Take Profit Downgrade
Price RM0.515
Vincent Lim Vi Ming
+60 (3) 9207 7663
lim.viming@osk.com.my
LCL Corp
Target RM0.480
Time to Reap the Rewards
Since we upgraded the stock to a Trading Buy from a Neutral (see our March 12, ’09 report “A breath of fresh air”), LCL has surged 56.1% on the recent market rally, outperforming the KLCI by 49.4% over a similar period. As we still do not see a shift in terms of LCL’s fundamentals, we downgrade the stock to a Take Profit call from
a Trading Buy as the stock price has exceeded our target price. We are retaining our TP, nonetheless.
Stock Profile/Statistics
Bloomberg Ticker LCL MK Equity
KLCI 907.01
Issued Share Capital (m) 143.13
Market Capitalisation (RMm) 73.71
52 week H | L Price (RM) 3.20 0.33
Average Volume (3m) ‘000 2918.19
YTD Returns (%) -0.20
Net gearing (x) 2.60
Altman Z-Score 2.23
ROCE/WACC 0.88
Beta (x) 1.85
Book Value/share (RM) 0.94
Major Shareholders (%)
Low Chin Meng 29.2
Eastern Advisors 6.1
Goldman Sachs 5.6
Share Performance (%)
Month Absolute Relative
1m 30.38 29.95
3m -33.12 -33.72
6m -67.20 -61.50
12m -80.72 -74.54
6-month Share Price Performance
0.20
0.70
1.20
1.70
Oct-08 Nov-08 Dec-08 Dec-08 Jan-09 Feb-09 Mar-09
Orderbook stable for the year. LCL’s outstanding order book currently stands at slightly
above RM500m, which is sufficient to sustain its operations this year. The bulk of its
projects consists of foreign projects (~90%), with a significant portion from Dubai (~70%).
Although there are risks related to projects in Dubai, given that LCL’s current orderbook
portfolio comprising infrastructure related projects and works which are nearing
completion or are fast-track in nature, we believe its orderbook is safe for now.
Conservative in forecasting new orders. We understand LCL is currently bidding for
other big-ticket IFO projects such as developments from Yas Island and the Green Line
Stations in Dubai, with a potential project value of approximately RM1bn and RM700m
respectively. Despite this, we are not imputing these projects as part of our orderbook
replenishment as Yas Island is mainly a tourism-related development for which we see
the risk of potential delays. As for the Green Line Stations, LCL is only bidding to secure
small portions of the project instead of the total RM700m. This we reckon is due to the
potential project downsizing initiatives as the emirate is currently experiencing difficult
economic conditions. (Recall LCL’s Singapore Marina Bay Sands project, which it
tendered for at RM150m but only received a portion worth RM100m when awarded).
Take Profit for now. We do not see LCL’s fundamentals gaining pace in the near term as
we assume its orderbook will remain as it is without any replenishment for the year.
Moreover, its recent net gearing stands at 2.6x and its debt collection days at 251 days.
We reckon a potential upside re-rating catalyst to only occur when LCL improves on these
figures. Thus, we maintain our TP for LCL at RM0.48, which is based on a 50% discount
to its FY08 NTA/per share. We also downgrade the stock to a Take Profit given that its
value has surged by 56.1% since our recommendation upgrade from a Neutral to a
Trading Buy.
This post has been edited by ABC2020: Apr 7 2009, 02:08 PM