HONG LEONG INDUSTRIES BHD
KLSE (MYR): HLIND (3301)
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Last Price
9.12
Today's Change
+0.07 (0.77%)
Day's Change
9.05 - 9.12
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65,000
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Discussions
6 people like this. Showing 50 of 2,523 comments
On the other hand, RCE Capital was a pleasant surprise. For several years, the growth was rather weak at low single digit. RCE profit records are not superior to HLIND. But one big difference is RCE Board was willing to return excess capital to shareholders, thereby improving its capital efficiency as illustrated in its robust ROE.
After adjusting for the bonus share issue, annual dividend was increased from 3 sen in 2017, to 4 sen in 2018, 5 sen in 2019, 6 sen in 2020, 7 sen in 2021, and 9 sen in 2022. And there was another 18 sen special dividend in late 2022.
The market took notice of RCE’s good corporate governance. On a 5-year basis, share price grew 163% (from RM0.83 to RM2.22) on unadjusted basis. After factoring dividend, share price actually grew 296% (RM0.56 to RM2.22)!
2023-08-09 21:33
Out of these 3 stocks, I like Allianz the most. Allianz’s 5-year return is not as impressive as RCE, but it is still much better than HLIND. On unadjusted basis, its return was 21% (from RM12.50 to RM15.14). After dividends are included, it returned 54% (from RM9.81 to RM15.14). So, unlike HLIND, a 5-year investment in Allianz has at least earned the cost of capital for its shareholders!
More importantly, just like RCE Capital, Allianz has been returning excess cash to shareholders in increasing amount. Dividend per share has increased from 40 sen in 2018 to 85 sen in 2022, and is still increasing. So the market has taken notice recently. Share price has been moving upward in tandem.
Of course, there are many other good investment opportunities besides these three companies. I mention these three for illustration purpose – that good businesses and good management alone are no guarantee for good investment return. The Board has to be shareholders oriented, and is willing to share its fruits with the minorities!
Therefore until HLIND board shows sign by being more (minority) shareholders centric, I will continue to underweight HLIND and overweight Allianz.
2023-08-09 21:38
Great call Observatory. Allianz is surging. Hopefully one day HLIND will be like this. It has all the necessary ingredients. After all Quek is getting old. Not implying he is sick or going to go soon. Just that when people are nearer to god or heaven, they can change to be more generous. Sort of like a calling or born again. Cheers.
2023-08-22 12:23
Useful insight & sharing from Observatory DividendGuy67.
despite the growing huge cash pile, > 60% div payout from earnings is quite reasonable, can't really accuse the company for not sharing the profit.
my gut feeling is, nothing going to change (on cash pile) as long Quek is around. anyway the old man is 82, if we can hold the stock long enough; the hope is eventually someone with different mind will emerge to do something that could uplift the stock valuation & price.
2023-08-24 12:47
Fair comment remus. As long as dividend yield is more than 6%, I can live with that.
2023-08-29 10:53
Fabien _the efficient capital allocator
Look at this way. you are getting paid 6% every year while waiting. this is cash rich company risk of bankruptcy is low. has dominant market share. stable earnings and cash flows.
2 months ago
Spot on Fabien. Just auto cruise and enjoy the scenery. Wonderful. Life is peaceful. Cheers.
2 months ago
Quek can live up to 100 quite easily with the monies he has. But I am also okay to get 6% returns for the next 18 years ..... haha
2 months ago
For a certain reason, I think there will be a great news for all shareholders not late than 2025, and most likely to be in within next 12 months. The news that all of you have been waiting for so long.
2 months ago
Thanks Sardin and long time no hear. I also have a certain feeling you are going to be right. Cheers.
2 months ago
Yes they may well be accumulating capital for expansion or new venture such as electric motorcycle
2 months ago
Will competition from many new electric scooter players impact HLI? Trust the board and management are on top of the game and we remain taikor in our core business.
2 months ago
HLI can and will also be market leader in electric scooter lor. No big deal and no problem. We have the means, size, expertise and connection.
2 months ago
The Queks are buying... they already own 77%... what do you think is their next move?
2 months ago
HLI has plenty of cash, a dominant market share, bright prospect going forward with the implementation of targeted petrol subsidy. Makes great economic sense to take it private. The shrewd, savvy and opportunist like Quek will surely be aware of this and is getting ready to pounce before gets too expensive. Too cheap and lucrative to ignore and share.
2 months ago
Highly possible. The price spread and movement is very small... extraordinarily small, don't you feel strange?
2 months ago
Hi lionel messi, do you plan to attend AGM? Just curious... anyone know what door gift was given in the AGM last year?
2 months ago
Sardin, anything extra you can decipher from the latest annual report. Looks like their e scooter is launching soon. Great development.
2 months ago
Somebody wants to put a floor on the price by stacking buy orders at various prices. Interesting....
2 months ago
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.
1 month ago
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
1 month ago
Smart money accumulation phase over. Looks like taking off soon. Fasten your seat belt guys.
1 month ago
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.
4 weeks ago
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.
4 weeks ago
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.
3 weeks ago
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.
2 weeks ago
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.
2 weeks ago
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.
2 weeks ago
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.
2 weeks ago
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
1 week ago
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I have reservation about HLIND’s cash hoarding right from the beginning. I also view HLIND as being less transparent versus the other two. For example, in its annual reports it would lump performances of different businesses together instead of providing breakdown. Unlike the other two, it also did not open to analysts through regular results updates.
Therefore it was not a surprise that HLIND share price remained range bound. In fact, on a 5-year basis (week 7-Aug-2018 to today), even after adding back dividends received, the total return was practically zero (RM8.98 to RM8.99). In fact, if dividends are excluded, the return would be -23% (RM11.70 to RM8.99)!
2023-08-09 21:31