Posted by petracot > 2012-02-22 14:29 | Report Abuse

Lafarge is an investment-grade blue chip, paying consistently quarterly dividend of 8 to 10 sen per share. All the infra projects particularly the MRT are coming on stream this year. Cement demand is expected to increase in the coming two or three years. Being the market leader with more than 40% share, Lafarge will probably be the greatest beneficiary.

Posted by qwerty8888 > 2012-02-22 14:33 | Report Abuse

but its mother company, France suffering losses... so i think it has indirect impact to local market

Posted by petracot > 2012-02-22 14:48 | Report Abuse

May be slightly in terms of image and perception but not in performance. On the contrary, HQ problems may benefit local minority shareholders. The local Lafarge may pay higher dividend or capital repayment in order to repatriate money to the HQ in France. They may even consider selling off the local Lafarge if the HQ is really desperate. They sold more than 10% of local Lafarge shares at RM6+ to institutional investors 2 years ago.

Posted by petracot > 2012-02-22 22:57 | Report Abuse

Lafarge valuation is high compared to its peers such as Tasek and YTL Cement. With the earning of 0.37 for the year ending Dec 2011 and the closing price of RM7.34 today, PE ratio works out to 20, which is fairly high. High PER of blue chips generally may indicate some kind of future growth or potential.

What goody is there in Lafarge that warrants such high valuation? The answer is in its 30% (3.6 million tons) exported cements.

The exported cements are priced at around USD45 per ton or around RM140 per ton. This is about the break-even cost. The domestic cement price is about RM300 per ton.

Here lies the gold mine. If all the exported cements are diverted to domestic market when demands pick up, there is a potential additional earning of RM160 per ton. That would work out to total additional net pretax earning of RM576 million or net additional earning of RM432 million or 0.50 per share.

Hence, Lafarge has the potential of hitting net earning of 0.87 per share. Of course, this is just on paper. How high can the actual earning be in the longer term? Well, your guess is as good as my guess.

Posted by petracot > 2012-02-28 12:05 | Report Abuse

Lafarge is priced at a premium by the market. Apart from its potential additional earnings from the possible diversion of its 30% exported cement, here is another reason.

The company pays out about 91% of its total earning in 4 quarterly dividends. This is very important to minority shareholders. A bird in the hand is worth two in the bush.

With current total single tier payout of 34 sen, the net return is 4.75%, far above FD rate of 3.1%

Posted by petracot > 2012-03-01 11:56 | Report Abuse

In analyzing Lafarge's earning, you must also consider "Depreciation and amortization (D&A)" which is deducted from net earning. D&A are paper write downs on plant, machinery or land leases but the money is in the company in the form of cash. In the absence of any capital expenditure, the cash can be distributed as capital repayment.

Lafarge has D&A of about RM160 million in 2011 or 18.8 sen per share. Thus the real earning is 55.8 sen per share. Coupled with potential diversion of exported cement to domestic market, the potential earning is RM1.058 per share (34+18.8+50). Discount whatever risk and uncertainty and derive your own estimation of future earning.

Posted by petracot > 2012-03-02 11:35 | Report Abuse

While uncertainties abound in the global economy, Malaysia is pushing ahead with full steam a long list of infrastructure projects - MRT, KLIA2, Iskandar Development Region, Expressways, water projects ... virtually endless with contract values running into tens if not hundreds of billions Ringgit.

Of course, first beneficiaries that come to mind are the construction companies. But the big question is who will get what and will they make profits, with the high-risk nature of construction industries.

Sit back and think for a while. The most likely and more certain winners will be material companies, particularly cement. Without cement, all projects will stall. Projects and developments need millions of tons of cement, literally. The only cement company that has excess capacity that can meet any rise in demand is Lafarge, with current 3.6 million tons being exported to overseas at razor thin profit. That excess cement can be diverted to local market with a short notice.

Posted by petracot > 2012-03-05 13:01 | Report Abuse

Another Infra project may be launched within next 1 0r 2 years - KL-Singapore High Speed Rail Project (KL-Sg HSR) and the cost is a staggering USD10 Billion or RM30 Billion. The government is serious about the project because it will bring tremendous travelling convenience and economic development. Due to very short travelling time, just imagine 1 hour from KL to Singapore, tourism, retail and property businesses will sky-rocket. Those who have taken HSR or popularly known as Bullet trains in Europe, Japan and China will know how fast and comfortable these trains are.

KL-Sg HSR project will exert more pressure on the demand of cement, which is needed in large quantities for various forms of civil works. Remember: there is only an excess capacity of 3.6 million tons of cement per year in the Malaysian market. And that excess capacity belongs to Lafarge. Import of cement is not feasible because cement is bulky and heavy and freight charges are far too high!

Posted by petracot > 2012-03-12 14:01 | Report Abuse

Lafarge's current earning is not exciting compared to its peers like Tasek and YTL Cement. This is because Lafarge's earning is weighed down by the 30% of its total production being exported at very thin margin of profit.

All other cement companies are virtually in full production for domestic market. Hence, the earnings would not change very much even if demand picks up because they do not have much room to increase production.

It is quite a different story for Lafarge. The 30% exported cement can be re-channeled to domestic market which could rake in substantial earnings. It would normally take 2 to 3 years to build an integrated cement plant if other cement companies decide to increase their capacities. By then, the construction game might be already over the hill.

(This article is for information only and represents author's own opinion. Please do your own research if you are intending to buy or sell)

Posted by E R > 2012-06-06 11:47 | Report Abuse

buy cement.. constructions need cement..

Posted by petracot > 2012-07-07 12:30 | Report Abuse

Lafarge is attracting quite a bit of attention lately with closing price of RM7.95 last Friday. With many mega construction projects notably MRT coming on stream, cement price will gradually experience upward pressure. Currently, there are only two pure cement listed companies- Tasek and Lafarge. Share price of both companies could move north in tandem with increasing demand for cement in the next two years.

(This article is for information only and represents author's own opinion. Please do your own research if you are intending to buy or sell)

Posted by kcfan > 2012-07-28 18:06 | Report Abuse

ECM Libra pointed out that the cement industry's key source of earnings growth increased the cement average selling price.
Since cement is the main construction material, when the Malaysian construction and industrial development projects started, contractors and building materials traders due to the expected cement prices will further increase, which may be the accumulation of inventories of activities that will lead to an average sale of the cement / concrete prices up.
As for another possible push factors of high local cement industry profits, the coal prices, the prices since late 2011 will begin to gradually lower, due to the major coal consuming countries such as the United States, its power generation industry began to be changed from the use of coal-fired power natural gas.
Coal-fired accounted for nearly 30% of the cement factory production costs.
ECM Libra Research Lafajima cement (LMCEMNT, 3794 Main Board industrial products group), the highest share of the domestic cement market, about 40 percent, followed by YTL Cement accounted for 29 percent, the cement industry accounts for about 17% accounted for approximately 10% of and boulder cement (TASEK, 4448, industrial products group). Therefore, once the cement price hike, Lafajima cement is expected to become the main beneficiaries.

Posted by KC Loh > 2012-07-28 18:22 | Report Abuse

cement prices going up by RM1 on Aug 1st, this news should beckon well for cement manufacturers.

I am not in position to tell buy or sell. Check with my brother, kcfan! LOL

Posted by petracot > 2012-08-01 13:40 | Report Abuse

Lafarge hit the high of RM8.20 this morning on the back of rising demand of cement. With all the mega infra projects beginning to take off, demand for cement will remain firm whilst the supply will be quite tight even though there are some additional capacities coming into the market next year.

As pointed out many months ago in this forum, Lafarge has the flexibility of diverting 30% of its export cement or roughly 3.6 million tons to domestic market. RHB is forecasting target price of RM9.05 for Lafarge. I have no doubt that the price is achievable within the next 12 months.

Posted by kcfan > 2012-08-02 11:33 | Report Abuse

On right direction to RM9.Good signal ahead.Thanks petracot.

Posted by petracot > 2012-08-02 11:41 | Report Abuse

A tale of two cement companies: There are only 2 pure cement companies listed on the Bursa, Lafarge and Tasek. Share price of Lafarge keeps rising hitting the high of RM8.60 this morning while the price of Tasek seems stagnating. Here's the explanation: As the demand and price of cement increase, Tasek can only benefit from price increase. Lafarge will reap profits from both increased demand as well as price because Lafarge has excess capacities of 3.6 million tons.

Posted by edlim > 2012-08-02 14:20 | Report Abuse

cheers............... go go go........

Posted by petracot > 2012-08-08 16:25 | Report Abuse

Lafarge is charging again, moving up by 41 sen to hit the high of RM8.70 this afternoon. On the other hand, Tasek drops 9 sen to RM9.90 per share. As explained earlier, Lafarge has the excess capacity to capitalise the booming construction industry. RHB predicted the target price of RM9.05 for Lafarge. I think the target price of RHB will soon be breached.

Posted by kcfan > 2012-08-22 07:55 | Report Abuse

The short-term stock price trends or 8.40-8.54 ringgit due technical support.

Posted by kcfan > 2012-08-22 10:42 | Report Abuse

minor rebound.good

Posted by petracot > 2012-08-29 12:43 | Report Abuse

Lafarge registered improved half-year result from 15.2 sen to 17.3 sen per share, which represents an increase of 14% over that of Lafarge registered improved half-year result from 15.2 sen to 17.3 sen per share, which represents an increase of 14% over that of last year. At the same time, the company declared a quarterly single tier dividend of 8 sen.

The 3Q and 4Q results should improve further due the 6% cement price increase which took effect from 1 Aug 2012. As more construction contracts are awarded, the demand for cement will increase further. As pointed out in earlier postings, Lafarge is currently the only cement manufacturer that has excess capacity to meet the rising demand.

Posted by kcfan > 2012-08-29 23:46 | Report Abuse

Better H2 forecast.
http://www.orientaldaily.com.my/index.php?option=com_k2&view=item&id=21932:&Itemid=198

Posted by kcfan > 2012-09-04 23:23 | Report Abuse

LMCEMNT began last month, the cement price rise by 6% in the next two years is expected by the large-scale projects insulation with the local cement demand, analysts optimistic about the half of the product make the site back to Young, and the company will pay off the floating-rate notes, short-term ability to pay dividends is expected to be strong.

Posted by kcfan > 2012-09-04 23:49 | Report Abuse

LMCEMNT is about to become a "zero liability" company, brokerage optimistic about the ability to distribute higher dividends in the short term.

Posted by petracot > 2012-09-06 12:51 | Report Abuse

In time of market volatility, a blue-chip high-dividend stock like Lafarge gives one some peace of mind. Lafarge pays out quarterly dividends of 8 sen nett for first 3Qs and 10 sen nett for 4Q giving a total of 34 sen, which works out to a yield of 4%, quite decent compared with FD rate of 2.8%.

There could be higher dividend payouts in the next few years due to the following factors:

a) Earning is increasing as a result of higher sales and higher margin
b) By this September, the company is debt free with nett cash in the coffer.
c) There is a recurring free cash flow of 180 million generated by depreciation in addition to normal earning, which works out to about 20 sen. This amount can be distributed as capital repayment on top of normal dividend.

Posted by liew kimguan > 2012-09-06 12:57 | Report Abuse

ya, LMCEMENT is a good dividend and growth stock also.

Posted by kcfan > 2012-09-10 10:54 | Report Abuse

Yes.Minor rebound on low volume.

Posted by petracot > 2012-09-14 11:37 | Report Abuse

Lafarge goes ex-dividend today. It is interesting to note that share price went up as high as RM8.79 this morning, a hefty gain of 37 sen from the reference price of RM8.42 per share. what's going on? Normally price would dip upon ex-d.

Without the encumbrance of dividend, Lafarge is free to chart a new uptrend. The global economy is slowing including that of Malaysia but the country is embarking on multi-billion mega infrastructure projects; MRT, TRX, high-speed train, oil & gas storage etc. The total spending runs into more than 100 billion RM. It does not matter at all which construction company gets the project; all of them need cement for their construction works. Hence the sure winners are the material suppliers, especially cement manufacturers.

Things may get even hotter as more project works are awarded. Keep your eyes on the news flow of new project launching and keep track of the cement prices.

Posted by kcfan > 2012-09-14 20:39 | Report Abuse

Thanks petracot on further info share out.Let's wait and see on the progress.

Posted by petracot > 2012-09-18 21:51 | Report Abuse

Lafarge moved up 18 sen to close the day at RM8.78 per share with a volume of more than 2 million shares. Examining the trade details, looks like big timers are buying. Many deals were in the multiple of ten thousand and there was a single deal of 121,900 in the afternoon.

Posted by kcfan > 2012-09-19 07:49 | Report Abuse

Good signal.Thanks on close following.

Posted by dknycom > 2012-09-19 10:03 | Report Abuse

LF CEMENT ON HIGHEST AGAIN. CHEERS.

Posted by petracot > 2012-09-24 11:44 | Report Abuse

In the midst of market doom and gloom this morning, Lafarge holds on tenaciously at RM8.76 apiece, unchanged from last week's close. Such phenomena is termed resilience. On top of that, two cross single trades took place with 200,000 and 372,900 shares changed hands respectively. The stock price reflects the bullishness of construction sector in the near future.

Posted by petracot > 2012-09-28 12:36 | Report Abuse

By this evening, the 2013 budget will be tabled. Lafarge has shot up 29 sen to close the morning at RM8.89 apiece. The market is probably anticipating more infrastructural spending which would exert pressure on the demand of cement. Is the market right in its assessment of the budget? Let's sit back and watch the presentation of the budget. If the market is wrong, price of Lafarge will fall on Monday. If the market is right, price of Lafarge may be sustained or inch up further.

Posted by petracot > 2012-10-02 12:41 | Report Abuse

There was no surprises of infrastructural spending in the 2013 budget. Most people think that present mega projects such as MRT, TRX, PNB Tower, Oil & Gas projects and other developments are more than sufficient to sustain the current construction industry at least for the next few years. Most of these projects have just been launched and are about to go into full swing development. Hence the demand pressure for cement is yet to be felt. The mad rush for cement would probably occur sometime next year onward. Cemex, one of the leader in providing ready-mixed concrete in Malaysia is optimistic of the growth for cement.

Share price of Lafarge is being maintained at pre-budget closed of RM8.90 apiece. It is flirting with the all-important resistance of RM9 per share. In order for Lafarge to pierce through this barrier, there must be substantial real demand for cement in the next few months.

Posted by kcfan > 2012-10-03 22:23 | Report Abuse

Expect cement orders to pick up further starting 4Q12 onwards due to execution of projects (which were awarded in early 2012) in 2H12.

Amongst the key projects are: MRT1 civil works, expansion of Tanjung Bin and Jana Manjung power plants. We reiterate our cement demand growth projection of 8.0% in 2012.

Interestingly, coal prices have been trending downward. Currently it trades at USD87.5pmt, 29% lower than its peak in September 2011. Coal and fuel costs accounted for about 50% of total production cost.

Hence, with i) strong demand, ii) higher price, and iii) low costs may translate into higher profit margins for cement players.

Posted by dknycom > 2012-10-04 09:45 | Report Abuse

THIS COUNTER WILL BREAK RM 9.00 LEVEL ANYTIME FROM NOW....
WATCH IT.

Posted by Fat Cat Tim Buddy > 2012-10-04 09:49 | Report Abuse

that 29 lots from RM9 , you wanna predict like this meh..., later if no hit 9, u will let ppl diu, worth or not

Posted by dknycom > 2012-10-04 09:53 | Report Abuse

BRO. NOW ALREADY RM 8.98!!!

Posted by petracot > 2012-10-04 11:19 | Report Abuse

Bingo! Lafarge has just broken through RM9 barrier touching RM9.02 per share at the time of writing. I am not a contractor or cement dealer so I don't have the actual feel of cement demand on the ground.

I would appreciate if some readers who have direct contact with cement dealings or first hand knowledge in the construction industry to give some feed back on the situation. That will benefit members of this forum.

Posted by kcfan > 2012-10-04 15:03 | Report Abuse

break 9.40 now.Bingo go go

Posted by petracot > 2012-10-04 21:55 | Report Abuse

Wow! It was quite a spectacular trading day for Lafarge. As soon as Lafarge broke through the RM9 barrier, people were scrambling to snap up shares, particularly in the morning and late afternoon. The share price was pushed up to an all time high of RM9.41 per share.

Well, I do not know of any specific reasons for the sterling performance apart from those which were shared in this forum. If there is any information which is known to insiders, it would surface in due time. As it is, I think the price is chased up as a result of continuous news flow of MRT contract awards.

You see, as soon as a contractor receives a job of say a few hundred million Ringgit, he needs to think about sourcing of building materials, such as steel and cement. As mentioned before, at the height of construction boom (yet to come), there would be a mad rush for cement.

Posted by dknycom > 2012-10-04 22:04 | Report Abuse

I believe this counter will continue the uptrend situation until next week. RM 10 above is possible anytime in tomorrow onward.

Posted by petracot > 2012-10-05 10:27 | Report Abuse

The price movement of Lafarge this morning defies its fundamentals and even surprises technical chartists. It shot up 60 sen to touch RM10 this morning. I have studied this company for many years and the price movements for the last few days throw my thinking off balance. The rapid rise of Lafarge price is unusual and beyond fundamental and technical analysis. Looks like something significant is brewing.

Does anyone know anything this forum does not cover? Please share your view.

Posted by kcfan > 2012-10-06 00:03 | Report Abuse

Lafarge Malayan Cement - Capital Repayment Prospect.
Review twice on this above report.Will gain your power of holding it.

Posted by petracot > 2012-10-06 13:02 | Report Abuse

As I look through all the information related to Lafarge, there is one aspect I have not mentioned - quarry and ready-mixed concrete. Quarry operation provides aggregates of various sizes for purposes of concrete mixing and road construction. This division has not been contributing much to the bottom line of Lafarge.

However, with the infrastructural construction boom which will last through 2016 (CIDB source), ready-mixed concrete can be a new money spinner for Lafarge. Lafarge ready-mixed concrete is reputed for its high quality and reliability which will attract large and reputable projects.

Recently, Lafarge provided a record-breaking 30-hour non-stop pouring of concrete for the foundation of CIMB Tower in KL Sentral. Currently, Lafarge is the sole supplier of ready-mixed concrete for the Sepang LCCT project. The contract is to supply 600,000 M3 of concrete. This is equivalent to 75,000 truck loads of concrete (8 M3 per truck). Lafarge has 30 concrete batching plants throughout the country and they will be kept busy for quite a few years.

Posted by dknycom > 2012-10-06 18:29 | Report Abuse

I CAN ASSURE THAT THIS COUNTER WILL BOOM IN NEXT FEW WEEKS.
TP OF RM 12.00 ABOVE IS POSSIBLE THIS TIME. NO KIDDING.

Posted by dknycom > 2012-10-06 18:29 | Report Abuse

I CAN ASSURE THAT THIS COUNTER WILL BOOM IN NEXT FEW WEEKS.
TP OF RM 12.00 ABOVE IS POSSIBLE THIS TIME. NO KIDDING.

Posted by dknycom > 2012-10-06 18:29 | Report Abuse

I CAN ASSURE THAT THIS COUNTER WILL BOOM IN NEXT FEW WEEKS.
TP OF RM 12.00 ABOVE IS POSSIBLE THIS TIME. NO KIDDING!!!

Posted by dknycom > 2012-10-06 18:30 | Report Abuse

I CAN ASSURE THAT THIS COUNTER WILL BOOM IN NEXT FEW WEEKS.
TP OF RM 12.00 ABOVE IS POSSIBLE THIS TIME. NO KIDDING!!!