LBS Bina Group Berhad - New lease of life
Date:
2011-08-24
Firm:
JF APEX
Stock:
Price Target:
2.03
Price Call:
BUY
Last Price:
0.755
Upside/Downside:
+1.275 (168.87%)
JF Apex Securities ' BUY ' TP RM 2.03
Investment Highlights
- Transforming into a significant medium to high-end developer. LBS Bina Group Berhad (LBS) has long been recognised as a low-to-medium cost developer. The Group has recently rebranded its corporate image and reposition itself to become one of the significant medium-to-high end property players after realising that its previous business model failed to withstand the financial crisis in 2008. We believe the stock will be back into investors' radar screen once it posts more convincing earnings this year and its successful launches of high-profile project, D'Island, in Klang Valley.
- Strong turnaround. LBS has successfully returned to the black in 2010 by achieving RM16.5m net profit against losses of RM17.2m posted in 2009 thanks to strong sales and higher margin achieved from its medium-to-high end projects. Going forward, we estimate the Group to record net profit of RM40.1m in 2011F, a whopping jump of 142.6% yoy and maintaining its profit momentum for 2012F and 2013F with net profit of RM83.4m and RM119.7m respectively.
- RM9.1b sizeable GDV to sustain the Group's earnings over the next 10-15 years. LBS has a total undeveloped land bank of 2,400 acres in Klang Valley, Cameron Highlands, Perak, Johor and China yielding total GDV of RM9.1b (ex-China). The Group targets to launch its flagship high-end project, D'Island, in Puchong in September 2011. The response for the pre-sales is encouraging with 90% take-up for the 122 units of 3-storey superlink houses being launched, pricing over a million or RM370-400psf.
- Strong unbilled sales. The Group has successfully chalked in about RM591m unbilled sales which provides earnings visibility of almost 1.7x of the Group's 2010 revenue of RM341m. Going forward, LBS is expected to continue to achieve impressive new sales with its strategy of focusing middle to high income level house buyers, which is less prone to rising cost of living.
Recommendation
Attractive valuation with potential 165% upside. Our non-rated target price for LBS is RM2.03, which is based on 50% discount to its RNAV/share of RM4.07 in view of LBS being a small cap stock. Our target price also implies 9.4x 2012F and 6.5x 2012F PER. Current valuations look attractive as it is trading at 7.4x 2011F and 3.6x 2012F PER, which is significantly lower than the sector average of 13-14x.
Discussions
1 person likes this. Showing 33 of 33 comments
For medium and long term investors, this counter is worth to be considered given its good fundamentals. It should be able to climb to RM 1.50 from RM0.79 now within a year. It will be another Hua Yang or Glomac in the making.
2012-02-07 11:06
If Apex's projected profit of RM83mil and RM120mil for 2012 & 2013 respectively turn out to be correct, this counter will be still under-appreciated and undervalued at RM2.03. :-) Time will tell
2012-02-07 19:03
hi value inv. y LBS will be another Hua Yang? any bad news to LBS. But r u knew Landbank of Hua Yang how many n value? n r u know Hua Yang pricing now is after exbouns arly.
2012-02-08 00:55
Hua Yang is a good counter can be up to $2.00. you may consider it. Hua Yang going to invest oversea development. check it out! Good earning profit in 2011 and will going on till 2013 base on forecast.
2012-02-08 09:00
Hua Yang is no doubt a good counter especially for people who have started to buy earlier like. Afew months or a year ago. (I went in early too. :-))
To aim for 100% return from now, LBS is now a better choice as it has locked in more sales and has more projects in the pipeline to support and sustain its share price appreciation in the next one year if Apex's analysis and projection is correct. Time will tell.
2012-02-09 15:17
As per Bursa website, LBS' director has been accumulating his company's shares. The company may have very good 4th quarter's result to be announced soon. :-)
2012-02-12 21:28
By end of this month. It is likely to be earlier. More importamtly, how often do we get to invest in a company with a RM 9 billion GDV growth story? Just imgagine, if it can generate another RM 1 bil sales in the next 15 months on top of its existing RM 650 mil sales already locked in last year, how much profit will it be able to generate?
Hence, it is a golden opportunity to be able to ride on this exciting growth story.
2012-02-13 14:08
As per Bursa website, its MD is still accumulating the shares in this company. So, the share price shall at least hold at the current level, if not moving up soon in the near term. :-)
2012-02-16 10:27
JF Apex was correct and right on the dot for its projection of LBS' 2011 net profit. Hence, it will exciting to see if its 2012 projection for LBS's profit turns out to be true, ie double of that achieved in 2011.
2012-03-26 18:15
Hua yang and LBS both are good performing counters. To make the choice I will focus on Hua yang first, the Q4 result will be out in May; EPS will be about 34cts for the whole year. To be able to level with Hua yang LBS must turn in at least 20 cts EPS for the next year which means the rev. must be about 700M ( shouldn't be a problem if the forecast of 800M+ by its CEO can be achieved) ,the next 3Q can give us the indication, so I prefer to wait and see meanwhile get the best out of Hua yang first.
2012-03-26 19:41
http://www.theborneopost.com/2012/03/21/lbs-bina-back-on-track-making-its-mark-on-property-scene/
85 sen today. Waiting for its first quarter result to validate JF Apex's profit projection ie RM83 mil profit for 2012.
2012-04-02 20:51
Don't forget Hua Yang, Q4 just ended,net profit will be higher than the consensus 42M and the dividend may be more than last year 7.5 cts. ( CEO said that )
2012-04-02 21:06
RM 400 mil gain for LBS soon?
As per the latest The Edge Weekly Magazine, LBS is believed to be selling its JV land in Zhuhai to refocus on the local property market. Premised on the estimated value of the land as stated in the earlier OSK research report, the land may be worth RM600 mil for LBS's latest 50% stake in the Zhuhai joint venture land. In other words, LBS stands to reap a one-off extraordinary gain as high as RM400 mil because the current book value of the JV land is carried at RM195 mil.
Based on its current share price of RM0.855, the market capitalization is RM330 mil only and the company may book in such a substantial extraordinary gain. So, it is interesting to see what is going to be unfolded in the near future for the company and its share price.
http://leo.lbs.com.my/docs/quater-report/osk-analyst-report---strategic-repositioning-for-lbs.pdf
2012-04-09 06:12
Potential RM 400 mil gain? WOW !
This means > RM 1 gain per share as the paid up capital comprises of 386 mil shares of RM1 each.
2012-04-10 09:33
No, this means this FY profit will be at least RM1.20 if it really makes this extraordinary gain of RM1.00. Funny, why the sellers don't consider this.
2012-04-10 14:08
I'll joint you later, I'll be happy to see that you all have 20 sen ahead of me.
2012-04-10 14:37
Read more: LBS Bina to reap RM650m from sale
http://www.btimes.com.my/Current_News/BTIMES/articles/20120418192840/Article/index_html
2012-04-18 23:10
Can't help falling in love with LBS, joint you all at .89 to cheer..........cheer! LBS.
2012-04-19 09:06
You are right Invest, but I can't help it , with the news that may give such a good extraordinary gain, I must take position and how do I know that the news gave the -ve effect. I could have saved some money buying at a lower price. Anyway what is done is done just hope that the due can really bring in some gain to the company.
2012-04-20 14:41
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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....
Tan Bee Ben
LBS drop to 0.74 today... any block for the rise?
2011-09-20 18:13