Price Target (LIONIND): Lion Industries Corp - No Signs Of Relief

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2 comment(s). Last comment by ks55 2015-06-15 00:26

ks55

3,820 posts

Posted by ks55 > 2015-06-01 15:07 | Report Abuse

Hold call by broker means sell for retail investor.
With TP becoming lower and lower each time result is out, the broker still ask you to hold.
Next TP will be 30 sen and still recommend you to hold. 不惊你死

ks55

3,820 posts

Posted by ks55 > 2015-06-15 00:26 | Report Abuse

Yes. To predict good company to be as good in 3 years down the road may be difficult, but to foresee a company won't be performing for next three years may not be that hard.

One glaring example is companies belong to William Cheng are all holland stock.
A very simple case study is Lion Industries (LICB) merely based on annual report for FYE 2014 already tell a story.



Stock: [LIONIND]: LION INDUSTRIES CORPORATION

Extract from Annual Report LCIB FYE 2014

RECURRENT RELATED PARTY TRANSACTIONS
The aggregate value of transactions conducted during the financial year ended 30 June 2014 were as follows:

Sale of scrap iron, steel bars, wire rods, hot briquetted iron, billets and other related products to:
1. Lion Corporation Berhad Group (“LCB Group”) 650,661,000
2. Lion Diversified Holdings Berhad Group 59,672,000


Trade receivables The Group 2014
Non-Current Trade receivables 644,217,000
Less: Accumulated impairment losses (294,332,000)
Net 349,885,000

Current
Trade receivables 344,514,000
Less: Accumulated impairment losses (23,170,000)
Net 321,344,000

Net trade receivables 671,229,000



Trade receivables from related party as of 30 June 2014,
Megasteel 562,732,000
Lion DRI 81,485,000
Total 644,217,000

Past due but not yet impaired:
Megasteel 298,164,000
Lion DRI 40,532,000
Total 338,696,000




So how much should be written off for FYE Jun 2015, take into consideration Lion Corp business has deteriorating much faster than 2014. Megasteel is a subsidiary of Lion Corp.
Goodwill (130,443,000) has been allocated to the steel operations of the Group and has not been impaired. Why not impaired?

Should consider LICB only after 7 Jul 2015 when Lion Corp get delisted.
Worst case scenario appear only after 4Q report in Sept 2015.

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