HONG LEONG INDUSTRIES BHD

KLSE (MYR): HLIND (3301)

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Last Price

10.28

Today's Change

+0.70 (7.31%)

Day's Change

9.96 - 10.50

Trading Volume

195,800


6 people like this.

2,545 comment(s). Last comment by observatory 5 hours ago

Posted by lionel messi > 2023-10-04 11:33 | Report Abuse

Sardin, anything extra you can decipher from the latest annual report. Looks like their e scooter is launching soon. Great development.

Posted by lionel messi > 2023-10-05 10:39 | Report Abuse

Somebody wants to put a floor on the price by stacking buy orders at various prices. Interesting....

Sardin

753 posts

Posted by Sardin > 2023-10-09 21:00 | Report Abuse

Hi lionel messi, I do not put too much focus on the e scooter because those things are technical and design ready and I do not worry about HLYM's manufacturing and marketing capability. I believe motorcycle sales continue to be resilient and boring while sales of tiles are recovering with widening profit margin. Overall I'm confident that sustainable EPS above 90 sen annually is quite possible for the present and next financial year.

Dehcomic01

286 posts

Posted by Dehcomic01 > 2023-10-29 09:12 | Report Abuse

In my analysis of the Bursa auto sector, (https://focusmalaysia.my/are-there-investment-opportunities-in-the-bursa-auto-sector/) HLInd came up on top of my screen. Of course, you have to dig deeper if you want to invest as a value investor

x3mg33

133 posts

Posted by x3mg33 > 2023-10-31 16:35 | Report Abuse

Has anyone been to the AGM today? Can share some good news?

Posted by lionel messi > 2023-11-02 12:16 | Report Abuse

Smart money accumulation phase over. Looks like taking off soon. Fasten your seat belt guys.

Sardin

753 posts

Posted by Sardin > 2023-11-02 15:21 | Report Abuse

Uptrend started and will last for at least a few months.

Posted by lionel messi > 2023-11-06 09:06 | Report Abuse

A few months? Cool. Suspect there must be something brewing underneath to catalyze and sustain the uptrend. Just sit tight and auto cruise. Life is great and peaceful. Cheers to all stakeholders. Keep up the good work.

Sardin

753 posts

Posted by Sardin > 2023-11-06 11:47 | Report Abuse

A lot of "fundamental" investors overlooked this stock because of bumpy EPS from 2015 to 2023. This roller coasting EPS could be the reason that washes HLIND out from their research list. What they might not know is sudden drop of EPS in 2017 is masked behind the loss materialised when sold out the inflated tangible assets of the prolong loss-making paper factory. It did not reflect the actual overall performance of HLIND. This is how I interprete performance for year 2017: actual EPS should be more or less close to FY2016 with a trim on the net asset which are not productive. Whereas 2020 and 2022 were hit by plant fully/partially shutdown during MCO which are non-fundamental related and non-repeatable. Fundamental of the company has not be shakened actually and large retained profit has been accumulated since 2019 (NTA increases from RM 5.17 to RM 6.45 excluding non-controlling interest). In addition on that, with much cheaper energy and raw material price and higher selling price compares with FY2023, earning for FY2024 is almost certain to increase further. The accumulated cash is also earning a better return because of higher interest rate. Tile business will be back to normal and quite profitable in 2024. That's I think is the better reason while a lot fundamental investors miss this when they rely on apps to filter for growth of EPS and steadily high ROE.

stockraider

31,527 posts

Posted by stockraider > 2023-11-07 10:39 | Report Abuse

Yes this is a rock solid fundamental stock with good div too loh!

Sardin

753 posts

Posted by Sardin > 2023-11-14 11:18 | Report Abuse

X3mg33, venturing into very exciting business

Posted by lionel messi > 2023-11-14 12:05 | Report Abuse

Really? Cool. Thanks Sardin.

Sardin

753 posts

Posted by Sardin > 2023-11-14 16:01 | Report Abuse

Based on the best info I obtained and my own judgment, this is what I think possible to happen:
1. Scrap the plan of new tile plant
2. Allocate the capital to the new capital-intensive business
It is so boring here looks like other people do not have anything to share.

Posted by lionel messi > 2023-11-15 07:53 | Report Abuse

I supposed most have nothing to share because this counter is too low profile, peaceful and safe. Not like those goreng dodgy stocks. As the saying goes no news is good news. Boring is the new sexy. Eagerly awaiting their upcoming quarterly result. Cheers.

Sardin

753 posts

Posted by Sardin > 2023-11-15 09:54 | Report Abuse

I thought you were focussing on american football

Posted by lionel messi > 2023-11-15 11:16 | Report Abuse

Offseason now bro. Now back in Argentina for holiday and following HLI from here. Thinking of dumping all my money into this undervalued gem. The ringgit is so cheap also. What say you bro? Cheers.

Sardin

753 posts

Posted by Sardin > 2023-11-15 22:12 | Report Abuse

Hi Lionel, to be frank, that is not a good idea. While HLIND is undervalued, don't put more than 5% of your wealth in this stock. Otherwise your money will be controlled by HLIND instead of you controlling your money. You know what I mean. Diversify your investment into equally good alternatives to preserve your freedom and peace of mind. I agree with you that we should sit back, read the coming quarterly report which I think earning will be decent, and see how much dividend is to be announced. For the time being, the best thing to do is probably doing nothing and guess the amount of interim dividend that is coming soon.

Sardin

753 posts

Posted by Sardin > 2023-11-15 22:25 | Report Abuse

Here are my other thoughts:
1. Sources say that HLIND is preparing to get involve in global EV business, partner with someone (probably to have access to the technology required). Well, I think this is not surprising because the big guy is not doing charity paying over 3 million ringgit a year to the managing director to sit there running "grocery business".
2. So far the expansion of the 400 mil RM new tile plant has nothing contracted. What I think is that HLIND might have a more attractive alternative / option so this is put a side and might finally be cancelled to give way to that more attractive investment.
3. Whether or not the 400 mil RM tile plant is to be materialised, tile demand is growing and will gain traction because Indonesia is moving to a new capital (East Kalimantan). This will spur the demand for high quality tiles and West Malaysia has the advantage as a close supply to the construction site.
That's are my 2 cents.

Posted by lionel messi > 2023-11-16 09:29 | Report Abuse

Thanks Sardin. Great insights as always. Appreciate it.

ykloh

506 posts

Posted by ykloh > 2023-11-18 15:45 | Report Abuse

it has cash of 1.6bln. it can pay 0ut 100% of profit as dividend.

Sardin

753 posts

Posted by Sardin > 2023-11-18 18:11 | Report Abuse

Commendable result with "stingy dividend". Expected.

Posted by lionel messi > 2023-11-21 08:52 | Report Abuse

Yup. Just cruising along happily and enjoying the scenery.

Zoemee

5 posts

Posted by Zoemee > 2023-11-24 15:10 | Report Abuse

Hong Leong Industries Bhd expects a successful financial year as motorcycle demand rebounds.The company recorded a net profit of RM87.67 million in the first quarter ending Sept 30, 2023.https://www.instagram.com/p/Cz2tE0hhKn8/?img_index=1

Posted by lionel messi > 2 months ago | Report Abuse

After all the excitement in UP, next playground is here right Sardin?

Sardin

753 posts

Posted by Sardin > 2 months ago | Report Abuse

Hi Lionel, I shifted my focus and got too immersed in UP.

Sardin

753 posts

Posted by Sardin > 2 months ago | Report Abuse

I dropped you a Christmas card. Search your mailbox.

stockraider

31,527 posts

Posted by stockraider > 2 months ago | Report Abuse

Attractive earnings & div stock mah!

Posted by Leesa688 > 2 months ago | Report Abuse

Thanks Sardin for all your input here and UP.

Posted by Fabien _the efficient capital allocator > 2 months ago | Report Abuse

HLI wishes to inform that the Proposed Disposal of HCB has been completed today. Upon completion, HCB has ceased to be a subsidiary of HLI.



The Proposed Disposal was completed for an Estimated Purchase Price of RM76.13 million.

Posted by observatory > 2 months ago | Report Abuse

HLI disposed HLI Trading Limited to a related party. This came after the disposal of Hume Cemboard Industries 6 months ago

chamlo

1,148 posts

Posted by chamlo > 1 month ago | Report Abuse

Why HLI not moving like UP?

Sardin

Hi Lionel, I shifted my focus and got too immersed in UP.

3 weeks ago

Posted by lionel messi > 1 month ago | Report Abuse

Just collect the almost 60 sen dividend every year for a yield of above 6% and sit patiently. Stock market is not just a stock picking game. It is also a waiting game.

alexnada

32 posts

Posted by alexnada > 1 month ago | Report Abuse

Well said.
the waiting part is never easy.

Posted by lionel messi > 1 month ago | Report Abuse

Easy peasy. Just work hard and grow your day job. Good stocks will take care of itself.

Posted by HarryBottle > 1 month ago | Report Abuse

Here are my other thoughts:
1. Sources say that HLIND is preparing to get involve in global EV business, partner with someone (probably to have access to the technology required). Well, I think this is not surprising because the big guy is not doing charity paying over 3 million ringgit a year to the managing director to sit there running "grocery business".
2. So far the expansion of the 400 mil RM new tile plant has nothing contracted. What I think is that HLIND might have a more attractive alternative / option so this is put a side and might finally be cancelled to give way to that more attractive investment.
3. Whether or not the 400 mil RM tile plant is to be materialised, tile demand is growing and will gain traction because Indonesia is moving to a new capital (East Kalimantan). This will spur the demand for high quality tiles and West Malaysia has the advantage as a close supply to the construction site.
That's are my 2 cents.

Hi Sardin, may I know why do you think the Tile business will improve? Any insights on this business/industry?

Posted by lionel messi > 1 month ago | Report Abuse

Welcome Harry. You are in a good place. Yes, Sardin is a great guru. Would love to hear from him but he may have found an even better place. We are on our own now. Can only hold on to his past wisdoms. But stick around. May turn out to be a gem.

stockraider

31,527 posts

Posted by stockraider > 3 weeks ago | Report Abuse

Good bluechip investment mah!

Posted by Fabien _the efficient capital allocator > 1 week ago | Report Abuse

3 billion market cap company. of which 1.6 billion net cash. generates 280-300 million annual profit. very profitable company at cheap valuation. HOLD.

Posted by DividendGuy67 > 4 days ago | Report Abuse

This one is certainly a "should own" stock. The only question for me is "how much?" That depends on your objective, your risk tolerance, what is your investment philosophy and strategy. I have mine where I am highly diversified, where my neutral position is around 3% capital. And this one should be neutral. My only complain is why Quek has been hoarding cash for the past 9 years - what exactly are his plans?

Having said that, if you are feeling speculative - note the 6 year triangle consolidation. Within the next 1-2 years, there should be some kind of a breakout.

Happy reading - http s://dividendguy67.blogspot.com/2024/02/hlind.html.

stockraider

31,527 posts

Posted by stockraider > 4 days ago | Report Abuse

Go for it longterm loh....next 4 yrs can above Rm 20.00 mah!

Posted by lionel messi > 2 days ago | Report Abuse

Cool. Meantime just shake legs and collect the decent yearly dividend. Life is peaceful as it should be.

ongkkh

219 posts

Posted by ongkkh > 23 hours ago | Report Abuse

insider knew the div and buy in advance

Posted by Fabien _the efficient capital allocator > 22 hours ago | Report Abuse

Special dividend 50 sen 😋

Posted by Fabien _the efficient capital allocator > 22 hours ago | Report Abuse

Wait for management to sell their non-core assets of Guocera tiles business and more bumper dividends for us.

Posted by DividendGuy67 > 19 hours ago | Report Abuse

Fuiyoh .... 50 sen special dividend beat my expectations so, so, nicely!
Total dividend this year is now 70 sen. At current price of 9.57, that's still easily above 7% dividend yield.
I am applauding management and the board for not hoarding the cash!
Bravo HLIND!

Posted by EngineeringProfit > 19 hours ago | Report Abuse

Yum...yum...big angpow

Posted by DividendGuy67 > 19 hours ago | Report Abuse

@raider, you echo my thoughts - double before 5 years is a majority scenario in my book too, especially after this Special Dividend landmark decision. For the first time, in a very long time, HLIND finally decided to share more of its cash with shareholders. Truly landmark.

Now is only Q2, and total dividends 70 sen, highest ever (at least past 10 years).
Nice increase from the previous 57 sen too.
This is how dividends should be managed.

Hence, can recommend higher than neutral position for long term investment.
If the price fall, you'll find me there to support and accumulate to be higher than neutral.

cch1042

3 posts

Posted by cch1042 > 6 hours ago | Report Abuse

Do you guys is worth for me to switch from TENAGA to HLI ?

Posted by Leesa688 > 6 hours ago | Report Abuse

So they are listening to all the earlier comments of giving higher dividends.

Posted by observatory > 5 hours ago | Report Abuse

The Board deserves praise for returning unused capital to shareholders through special dividend of 50 sen.

The total amount of special dividend is about RM157m, which is greater than the proceeds from disposal of HLIT (~RM36m) and HCB (~RM80m). But RM157m is only a small fraction of the latest company net cash at RM1.7b

As I’ve commented earlier, the share price will re-rate upwards if the Board returns more cash to shareholders. Today share price movement has just confirmed the point.

To reiterate my earlier comments, let’s compare against Bermaz Auto, which is probably the best run automotive local company. BAuto trailing twelve month revenue was about RM4b, supported by a net cash position of about RM400m, or about 10% of annual revenue.

Applying the same standard, HLI’s annual revenue of about RM3b needs only about RM300m of net cash as working capital. It could safely return RM1.7b - RM300m = RM1.4b of cash to shareholders without affecting its business operations. That works out to be about RM4.5 cash per share.

According to Kenanga, the passenger vehicle sector’s average forward PE is about 11 times. Applying this average, the share price is still worth 11 x RM0.927 (Kenanga’s 2024F EPS) = RM10.2.

In other words, if the Board is willing to put cash to better use, conservatively the share price could be RM10.2 plus special dividends of RM4.5! This has not even taken into account of HLI’s dominant market position. Besides, by showing it cares about minority shareholders' interest, it could enjoys an even higher PE multiple.

Moving forward, I hope the Board could give greater clarity to shareholders and the market how it would best utilise its cash.

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