This looks like a good punt, as part of a diversified portfolio for the longer term, patient dividend investor. Valuation is undemanding near 80 sen. Net cash. Good dividend yield, ranging 5%-6% or more potentially at this price and probably good over next 5-10 years plus possible price doubling over this period.
I was told from a Muar people saying that the company will "stop" for 3 months till after CNY oh...(However, i don't think so, but hope it is a rumours)
A complete operation halt for three months will be worse than Covid lockdown. If the news is genuine, which I doubt so, the management would have to make annoucement in Bursa as such decision will have material impact on the share price. However no such annoucement can be found.
Nevertheless it's quite likely that furniture demand and therefore production have slowed considerably in recent months. I shared the news in Jun that US furniture retailers were facing serious inventory problems. It's likely that customer orders are drying up now. But such info should have been reflected in the current share price. The share price has declined by a quarter since Jun.
The wood manufacturing sector's prospects appear to be dimming even with the easing in elevated raw material costs and supply chain issues, as the industry is facing yet another obstacle — slowing furniture demand.
@fortunefire, actually, LIIHEN can afford to pay higher dividend. In the past, it has been very conservative, paying only 40% earnings or less. However, over the past 3.5 years, the payout ratio is steadily rising - the question is - will this become a new trend? 2020 - DPS 4.7 sen / EPS 14.0 sen = 33% payout 2021 - 2.7 sen / 7.2 sen = 37% payout 2022 - 6.2 sen / 13.9 sen = 45% payout TTM 2023 - 7.1 sen / 12.2 sen = 58% payout.
With Net Cash of 37 sen, and trading at 87.5 sen, the business is available for sale for only 50 sen. It's long term EPS is 12 sen, i.e. this wonderful business is only selling for a P/E of ~ 4 times.
It's dividend yield is nice for TTM 2023 = 7.1 sen / 87.5 sen = 7.0%. That must beat EPF nicely at this depressed price.
If the Company continues to share its profits with shareholders (e.g. a payout ratio of 80% EPS should be very sustainable given the huge Net Cash position, even to cover very bad lean years), even without any Special Dividends, it's DY will be higher than 7.0% and this stock is well overdue for a re-rating up.
Personally, lower prices is sufficient reason for me to accumulate.
LIIHEN + 2 sen today. Together with 22 other green stocks offsetting 11 red stocks and several unchanged, my portfolio has made new all time high again today. This is new all time highs for the 3rd time in December month alone.
-Revenue gradual recover~ -last quarter net profit 15m include forex loss of 3m -upcoming quarter should has better forex gain as USD spike again since Jan -dividend > 6% p.a
LIIHEN +6 sen, or +6.19% close today. Thanks to LIIHEN and 21 other stocks in green to offset 9 stocks in red, my portfolio made new all time high again today!
The dividend is indeed powerful. It lowered my Average Buy Price from 85 sen down to 78 sen. Today, LIIHEN closed 1.06, highest close. This plus 17 other green stocks to offset 16 red stocks, is enough to edge my portfolio to make new all time high again today. Thank-you Mr Market!
Nice thing about under-valued, high dividend yield stock is that the longer we hold, the more dividends we received, the lower our average buy cost gets without doing anything.
This book is the result of the author's many years of experience and observation throughout his 26 years in the stockbroking industry. It was written for general public to learn to invest based on facts and not on fantasies or hearsay....
Tangtanggood
17 posts
Posted by Tangtanggood > 2022-09-21 10:33 | Report Abuse
Definitely will rise until 0.90. This is best price already