Technically LBS looks good at PE 10.8 and P/S at 1.06. Grandma see this as very good potential as the rise in the price is also consistent and gradual. Also very decisive in movement compared to some hovering at price for very long.
Published: Monday July 29, 2013 MYT 12:00:00 AM Updated: Monday July 29, 2013 MYT 6:53:03 AM LBS Bina aims to double profit
BY CHERYL POO CHERYLPOO@THESTAR.COM.MY
PETALING JAYA: Although LBS Bina Group Bhd has strongly hinted at a higher-than-industry-average dividend rate, its board continue to waver between rewarding shareholders with a more handsome payout and growing its Malaysian business with incoming funds.
Their consideration is to use a mere portion of the deferred cash payment, which will be received in four portions from end-2014 to 2017, to incentivise investors. But even so, it is a decision that weighs heavily on the board.
But what is more exciting is its lofty ambition to double last year’s net profit of RM37.2mil to RM74mil in three years.
Managing director Datuk Lim Hock San finds this doable on its encouraging first-quarter pre-tax profit of RM16.1mil, a 10.9% improvement from last March.
“Things are looking good for us. We will focus on and grow our local land bank of 2,055 acres to double our profits,” said Lim, whose family owns 51.2% of the business via Intelrich Sdn Bhd.
Collectively, the projects to be rolled out over the next decade are estimated to total RM15bil in gross development value (GDV).
The feasibility of LBS Bina’s internal goal would be dependant on the take-up rate of its project launches, Alliance Research analyst Bernard Ching told StarBiz. The group was certainly poised for growth, he added, judging from its total land bank.
Last week, Kenanga Research published a report saying that the strong growth in earnings was attibutable to project timing, and that the projection of a RM56mil net profit for the year ending Dec 31, 2013 was achievable.
To recap, the small-cap property player had inherited three projects in China via the reverse takeover of Instagreen Corp Bhd 11 years ago. A fortnight ago, it sold these assets to Zhuhai Holdings Investment Group Ltd for HK$1.65bil (RM680mil).
As part of the deal, LBS Bina will receive a cash settlement of HK$500mil (RM206.24mil), followed by a proposed settlement of 225.56 million new shares in Hong Kong-listed Zhuhai Holdings at HK$1.33 per share worth HK$300mil (RM123.74mil) and promissory notes for the sum of HK$850mil (RM350.61mil).
The one-off deal contributed a pro forma gain of RM309mil to group revenue, and the fact that the group still owns 264 acres of the Zhuhai International Circuit – the 60% exchange in shares – indicates potential for future business opportunities in the territory.
Meanwhile, the board is keeping mum on the new dividend policy until the first tranche of the cash payment of HK$500mil and the 225.56 million shares come through by the end of August.
In the last two years, LBS Bina had paid out dividends of 2.5 sen.
hi sifu, any reasons that this is a good stock? what needs to be announced has been done. and they are keeping quiet about thier dividend should they want to reward investors. what else could be new??
Thanks, csk396. Based on the CIMB research report, LBS' share is potentially worth > RM6 based on its RNAV if it could sell off its third plot land in Zhuhai at RM1.5 billion. So, theoretically speaking, it is better to keep LBS share than fixed deposit in the long term. It is kinda sure win barring unforeseen scenarios.
Hi supeman88, I rather wait for special dividend pay out. It should be big sum of money. But before the special dividend expired this counter have to raise up to certain value in order not to impact on investor benefit.
Grandma see very good work of this counter. Overall at this point a better escalation than Kimlun. Their net profit margin of close to 10% and OP margin of close to 15% is within the construction sector performance though most of this type of counter carry the 4 pillars which include some PD. When comparing with Kimlun, to be fair, Kimlun over the last 5 years have a much better track record than LBS in overall ROE, ROA, ROI. While Grandma is currently in LBS, this will b very short term here base on the above info. In short, Grandma feel Kimlun is steadier than LBS in terms of growth but for now its LBS.
One year ago, CIMB Research assigned a TP of RM2 when it was trading around RM0.8.
Now CIMB has assigned a new TP of RM3 to LBS. When you have identified a company with great potential, It is more worthwhile to invest in longer term rather trying to outsmart or beat the market by trading short term many times for the same counter which will likely benefit the stockbroking firms more. http://research.cimb.com/index.php?ch=5013&pg=5014&ac=57862&bb=file
Young man, investment is personal and one where you use your judgement because gain is also personal. You will not use your gain to buy shares for someone else and similarly your loses by blaming someone else. So choose wisely.
Grandma and value investor. Thank you for sharing may 2012 and August 1 3013 cimb report on lbs. looks like they 'may' give out 53 sen special dividend or give 1:1 bonus share. MAY give is a grey word used by MBf holdings when they sold credit card subsidiary but the stingy management swallowed all profits and took co. Private What's your opinions. Please as you both follow this counter. Can share pls? Much appreciate your posting.
Grandma, well said. There are many ways to buy or sell shares at a point in time. For me, FA makes up 60% higher now because the index is at all time high. TA makes up the rest, plus catalyst.
Certain forummers can mock you for buy high and sell higher. They can mock you till cow come home. Ironic.
Posted by Grandma > Aug 8, 2013 01:54 PM | Report Abuse
Young man, investment is personal and one where you use your judgement because gain is also personal. You will not use your gain to buy shares for someone else and similarly your loses by blaming someone else. So choose wisely.
Worth to note that the share wasn't rated on both occasions, with no official Target Price (first page, top right hand corner), except the casual mention of it in the pages behind.
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Posted by Grandma > 2013-07-27 09:51 | Report Abuse
Technically LBS looks good at PE 10.8 and P/S at 1.06. Grandma see this as very good potential as the rise in the price is also consistent and gradual. Also very decisive in movement compared to some hovering at price for very long.