HONG LEONG INDUSTRIES BHD

KLSE (MYR): HLIND (3301)

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Last Price

9.01

Today's Change

-0.18 (1.96%)

Day's Change

9.01 - 9.14

Trading Volume

11,000

Overview

Market Cap

2,954 Million

NOSH

328 Million

Avg Volume (4 weeks)

19,863

4 Weeks Range

9.01 - 9.30

4 Weeks Price Volatility (%)

0.00%

52 Weeks Range

8.57 - 9.90

52 Weeks Price Volatility (%)

33.08%

Previous Close

9.01

Open

9.03

Bid

9.01 x 2,400

Ask

9.08 x 100

Day's Range

9.01 - 9.14

Trading Volume

11,000

Financial Highlight

Latest Quarter | Ann. Date

30-Jun-2022 [#4] | 19-Aug-2022

Next QR | Est. Ann. Date

30-Sep-2022 | 22-Nov-2022

T4Q P/E | EY

14.01 | 7.14%

T4Q DY | Payout %

5.53% | 77.50%

T4Q NAPS | P/NAPS

5.81 | 1.55

T4Q NP Margin | ROE

11.26% | 11.07%

Market Buzz
Company Profile

Sector: CONSUMER PRODUCTS & SERVICES

Sector: CONSUMER PRODUCTS & SERVICES

Subsector: AUTOMOTIVE

Subsector: AUTOMOTIVE

Description:

Hong Leong Industries Bhd is a Malaysia-based company that primarily operates through two segments. The company?s consumer products segment manufactures, assembles, and markets consumer products, including motorcycles, scooters, and related parts, and produces ceramic tiles. The industrial products segment produces and distributes industrial products comprising fibre cement and concrete roofing products. The company also has associates that are involved in motorcycle manufacturing and distribution, as well as newsprint manufacturing and marketing. Hong Leong Industries generates the majority of its revenue from the Malaysian domestic market.

Discussions
5 people like this. Showing 50 of 2,279 comments

Karma4444

holland results liao, tomorow all motor masuk longkang

2021-11-22 18:28

Sardin

I beg to be differ. This 2022 Q1 result is far better than what I predicted. With this result I'm a lot more confident that HLIND will achieve RM 0.90 to RM 1.00 annual EPS for FY 2022. If this is real share price will have very good chance to go up to RM 11.00 or higher by end of FY 2022.

2021-11-22 21:09

firehawk

different opinions .... let's see tomorrow how the market judge it :D

2021-11-22 22:36

kywoo

The fact that the company continues to declare a 17 sens interim dividend for the poor 1st quarter results only means one thing. Management believes that the next three quarters will produce good results. If the coming two quarters show good results, the final dividend may be maintained despite the setback in the first quarter. We are talking of 52 sens for 2022 financial tear. In the next three quarters, there will be higher sales and profits because the company will be in full production and demand for its products will pick up. The uncertainty now is that we do not know how Yamaha Vietnam will be doing in the next three quarters. This quarter is the first time they are making losses instead of contributing profit to the group. The other good news is that the group is still cash rich and maintaining good dividend payout despite lower profitability is not a problem.

2021-11-22 23:17

alexnada

Vietnam side should be better now as previously, they were in full lockdown for at least 4 months. The lockdown has been lifted and things are starting to move again. Definitely going to be better in the coming months.

2021-11-23 09:40

Sardin

Very likely result is already good in Oct and Nov so that the management made a statement where "barring any further MCO, result for FY 2022 will be satisfactory". Furthermore, in general, Malaysian's income has reduced in the past two years and many M40 has now fallen into B40. These people are then motivated to opt for a cheaper mode of transportation which is motorcycle instead of car, due to affordability and the need to rebuild their emergency fund. Lesser disposable income will also encourage them to save recurring fuel and maintenance expenses which can only be feasibly achieved by choosing motorcycles.

2021-11-23 09:41

firehawk

LOL .... only market speaks the truth :D

2021-11-23 09:44

Sardin

80% of the profit comes from market in Malaysia. Contribution from Vietnam is only 20%.

Spread of Covid-19 and MCOs etc. will change the timing of motorcycle production and therefore the transaction but not reducing the demand (the demand should be increasing instead). Therefore recovery would be strong and quick.

2021-11-23 09:48

Thirai Thiraviam

@Sardin - Thanks for the information. Looking at the steep decline in revenue, I was apprehensive about the future of the stock.

2021-11-23 17:46

Sardin

@Thirai - What you feel is very normal if you just look at the surface of the number alone that happened 5 to 2 months ago because it is not a nice figure. However, to see beyond this or to be able to see the future, you need to digest this figure with OTHER INFORMATION. By checking the quarter result in MCO 1.0 and how the earning recovered after that would help you to understand. You may be able to observe that the company is now coping with MCO 3.0 in a lot more effective way to reduce the impact and also you may be able to see that the shock level to the shareholders is a lot less from how the share price curve changed.

2021-11-24 09:39

Sardin

This share is a growth stock + turnaround (from temporary issues). Growth stock generally gives you long term return and turnaround gives you short term return. With these two combined, you can expect a medium return at low risk in within a year. I don't think there would be any buying opportunity for this stock if it is without temporary steep drop of revenue and profit due to MCO 3.0.

2021-11-24 09:46

Sardin

If you are still worrying perhaps you should look for other stock that suits your profile better. It is not good to hold any share you do not feel safe about it.

2021-11-24 09:50

Sardin

1. Guocera Holdings Sdn Bhd Group’s new strategy is to move away from
ceramics to focus on the mid to high-end market segments for porcelain
tiles, particularly those with distinctive product features and concept-
based selling. The immediate and long-term plans are to broaden and
deepen market penetration for both domestic and international channels.
(page 19 of Annual Report 2021(“AR2021”))
Apart from key international markets like Vietnam, Thailand, Singapore and
Australia where the Guocera brand is well-recognised, what are the
Group’s plans in terms of penetrating new international markets? What are
the other new international markets that the Group targets to penetrate?
Response:
For Guocera, besides the few countries mentioned in the question, we also export
to Europe, Middle East and America. With our focus on higher-end products, we
are now able to offer a better concept range of products via our existing network
of customers to improve the demand.
2. The Group’s revenue contributed by Singapore customers increased
significantly to RM34.1 million (2020: RM15.3 million) (Note 30, page 129 of
AR2021).
Which of the Group’s products attributed to the increase in revenue from
Singapore customers? What is the expected demand from Singapore
customers for the Group’s products, going forward?
Response:
The significant increase in the Group’s revenue from Singapore customers in
FY2021 as compared to FY2020 which was mainly contributed by Guocera
Group was because of shorter lock-down period in FY2021. We believe that our
higher-end products will also help to improve our sales from Singapore.
impairment losses are disclosed in Note 30 of the Financial Statements (page
121 of 2020 Annual Report).
3. The Group’s 1st quarter ended 30 September 2021 (“1QFY22”) recorded
57.6% drop in revenue to RM277 million (1st quarter ended 30 September

2022-01-14 12:01

Sardin

2020: RM652.66 million), while profit before taxation (“PBT”) declined to
RM6.2 million (1st quarter ended 30 September 2020: RM93.0 million). The
lower revenue and PBT was due to lower sales across all product segments
because of Movement Control Order (“MCO”), which caused the
curtailment of production for 2 months. (Quarterly Report for 1QFY22)
(a) With the gradual reopening and normalisation of economic activities, to-
date, how and to what extent has it impacted the orders for the Group’s
products?
(b) Has the Group’s current production level normalised?
Response:
(a) With gradual reopening and normalisation of economic activities, the orders
for the Group’s products have progressively improved towards the level prior
to the recent lock down.
(b) Although all our factories have resumed operation, there is continual
disruptions to our productions as a consequent of COVID-19, supply issues
and absence of workers due to quarantine.
4. The Group’s inventory has increased from RM212m in FY2020 to RM303m
in FY2021. What is the reason of the high inventory on 30 June FY2021.
(page 69, Statement of Financial Position)
Response:
The increase is mainly due to the increase in the CKD parts stocks in Yamaha
operations. As the CKD parts were ordered 3-4 months ahead, the stocks have
increased because of the continuous arrival of the CKD parts during FMCO
period while the production was curtailed.
5. Page 22 of AR states that "Earnings, capital expenditure requirements,
borrowings repayment, capital adequacy, dividend yield and other relevant
factors are considered by the Board in determining the actual dividend
payout."
As of June 2021, net cash plus money market fund was RM1.25 billion or
RM3.8 per share. The capex was only about RM50 million for FY2021.
As asked in previous AGMs, does the Group have any concrete plan to
substantially invest the excess cash in high return projects? Failing that,
can the Board set a date to return excess cash to shareholders? This will
help to increase the Return on Equity which has been declining.
Response:

2022-01-14 12:03

Sardin

The Group has been gradually declaring higher dividend payout over the years
with dividend yield around 5% at the current share price. The Group is likely to
continue to declare dividend on this basis.
6. The share of profit from Vietnam's associate has declined every year from
RM134 million in FY2017 to RM36 million in FY2021. Noted that the decline
has started before the pandemic. What are the root causes? What have the
Vietnamese management done to reverse the trend?
Response:
There was a strong competition on pricing in Vietnam market especially from the
major competitor. Yamaha Vietnam will be introducing a new scooter model and
this is expected to enhance the financial performance of Yamaha Vietnam.
7. HLI has exited the concrete roofing products and distribution of building
materials. The performance of the HLI in the future will be dependent solely
on the manufacturing and sale of consumer products comprising
motorcycles, spare parts and ceramic tiles.
With very strong balance sheet and strong cash reserves, can the
Board/Management provide some updates/guidance to shareholders on
expansion of current core business and potential new business that can
reduce its dependence on the motorcycle business in Malaysia and
Vietnam for its future growth.
Response:
Both ceramic tiles and motorcycles have great potential to grow their businesses.
The Group will continue to explore on new businesses, both in terms of organic
growth and inorganic growth. The Group will also continue to look for opportunity
for potential merger and acquisitions.
8. How is Vietnam e-bike to affect Vietnam’s motorcycle industry? Will it affect
Yamaha’s market share? Will Yamaha come out with e-bike in Vietnam?
Response:
E-bike market in Vietnam is still very early stage with only a few players involved,
this hence would not affect Yamaha’s market share for the time being.
Nonetheless, Yamaha Vietnam has included e-bike industry in its planning.

2022-01-14 12:03

Sardin

Above QnA of latest HLIND AGM

2022-01-14 12:11

observatory

Sardin, thank you for sharing the Q&A.

The document link can be found here
http://www.hli.com.my/gm_current.php

I attended the AGM. There were many questions asked and answered during the AGM that couldn't be found in the published minutes or Q&A documents!

I've noted a few. For example, there were questions about the number of shifts for the Malaysian motorbike plants (mostly 2 shifts), utilization (80% of current capacity), downtime due to parts shortages (affecting overall production 10% to 15%). There was also a question about frequent changes of senior management in the past few years (they replied it's fine).

The person preparing the minutes is too lazy! It deprives important info from shareholders who couldn't attend the AGM.

He only did the bare minimum to comply with the listing requirement which dictates that listed companies must produce a "Summary of Key Matters Discussed" after their AGMs. Companies much smaller in size than Hong Leong Industries have done better!

I hope someone in the company senior management or the board will read this message.

If you can't do somethings like spending an extra 30 minutes to produce a more complete minutes, how could we shareholders expect you to protect our more important interests?

2022-01-14 20:26

Sardin

Hi Observatory, I observed the same too. Actually there's one more thing about hiring of operators. Perhaps some of the info are sensitive to be disclosed. However I agree with you that they should at least give a proper explanation to us. Probably next time we can ask to change the share registrar company. According to the rule the minutes have to be signed by HLIND chairman before it can be published. Either the chairman has also not performed a good job at this or there are other problems we do not know.

2022-01-21 12:29

Sardin

Or we can, in the next AGM ask them to explain why they didn't publish the complete Q&A for last AGM.

2022-01-21 12:33

Sardin

Given the following situation:
1) 2 shift production (3 shift for certain models)
2) 10% to 15% downtime due to part shortage
3) hiring more operators
4) 80% capacity utilisation
I believe that:
1) demand of motorcycles is high and will remain high (new hiring won't happen just to fill back log)
2) critical part supply (could be chip) is hand to mouth situation due to tight supply and high demand at the same time
3) there's capacity to absorb increasing order and hiring more operators can then be making sense
All these together with other data, next quarter result will be very satisfying. I would be surprised if it is not.

2022-01-21 12:52

Sardin

Hi ZZProzaz, it is from people who works in this industry. I'm not sure what was the capacity utilisation prior to Covid 19 but I guess there has been some expansion done and in progress.

2022-01-28 14:09

Sardin

"With growing demand for Yamaha's products, HLYM's capacity expansion plans were expedited to fulfil the piling orders and to meet the future growth of the business. Several new facilities have been installed and mass production commented in FY2021 to increase supply output. A new assembly line and inspection facility, equipped with the latest motorcycle evaluation technology, were installed to produce motorcycles of the highest quality." AR 2021.

2022-01-28 14:30

Sardin

I read from somewhere that Yamaha has been agressively increasing the number of motorcycle service centre in Malaysia but I couldn't recall the source of the information. Maybe someone else here could help.

2022-01-28 14:37

x3mg33

check this link for motorcycle production and sales in SEA. does not show by brand but gives an idea on overall sales n production. MASAAM represents malaysia.

https://fami-motorcycle.org/databases/

2022-01-29 22:36

Sardin

I believe HLIND (Hong Leong Yamaha) like many other companies that produces branded and quality products pay higher than minimum wages to retain skill and productivity. So the impact should be minimal. Also, raising of minimal income domestically means more B40 can afford motorcycles which is their favourite choice of transportation. Therefore I think the positive impact should be higher than the negative impact.

2022-02-07 15:45

Sardin

As for the number of workers, I don't have the info but I don't think 15k is the right number. The actual number could be A LOT smaller.

2022-02-07 15:46

i3lurker

number of employees is compulsory disclosure inside accounts

2022-02-07 20:12

observatory

Disposal by key shareholder. Although it's insignificant to its total 238 million shareholding, I wonder why.

https://www.bursamalaysia.com/market_information/announcements/company_announcement/announcement_details?ann_id=3232124

2022-02-10 19:15

Sardin

To lure you selling

2022-02-10 23:03

Sardin

As a result, labor intensive and low productivity business will be flushed out over time. Service sector including restaurants and hotels will be more challenging. Leaders in the manufacturing sector that produces excellent products that help the productivity of the B40 and M40 (domestic and export) such as home appliances, motorcycles, furniture etc. will remain profitable and continue to enjoy growth because they are able to not only pass the cost to the customers but increases the price moderately as the purchasing power of the lower classes improve globally.

2022-02-16 11:18

Sardin

The increase of minimum wages are always connected to very high exports. I believe government's faith and courage to increase the minimum wages mainly comes from the result of very good and sustainable export.

2022-02-16 11:22

ykloh

the frequent upward adjustment of min wage level is due the weak ringgit and political expediency. govt looks good for raising the min wage level but if that is not accompanied with increase in productivity, industries and consumers will suffer.

2022-02-16 23:51

Sardin

Hi zzprozaz, it is a good result as long as sales is more than 40,000 units. Anything above that is excellent. This is expected because lots of people trying to avoid the sst by buying before 1st Jan 2022. If every month can maintain 41,500 then annual EPS should be quite satisfactory.

2022-02-18 18:46

Sardin

If Ajinomoto is priced at RM 15, HLIND should be priced about the same.

2022-02-18 18:47

Sardin

Hume is a seperate entity

2022-02-22 21:27

Sardin

Sales remain strong. Just that cost is high. The high cost will be soon transferred to the consumers.

2022-02-24 10:47

zzprozaz

Sardin, do you know when will Hlind raise their ASP of yamaha motorcycle? Is it raised already?

2022-03-01 15:10

Sardin

@zzprozaz, raised already, more than enough to cover cost hike and prosperity tax and profit increase if monthly TIV maintain above 40,000.

2022-03-04 15:02

zzprozaz

Sardin, where to know yamaha motorcycle ASP raised already? Any news?

2022-04-16 12:35

stockraider

Min pay Rm 1500....more people can afford motor loh!

Good for HL Ind loh!

2022-04-17 14:23

stockraider

Also Yen cheap...better margin for motorcycle loh!

2022-04-17 14:24

Sardin

That was the first time. 2nd time is this https://www.zigwheels.my/new-motorcycles/yamaha

2022-04-22 18:12

DickyMe3

Post removed.Why?

2022-06-08 21:22

RWG

this counter look very stable, even klci drop like shit

2022-06-13 18:10

Sardin

Not surprising with defensive business and good dividend yield.

2 months ago

Sardin

It is accumulating energy and momentum to revisit RM9 or higher. This may happen by end of Aug.

2 months ago

Sardin

It has now happened for quite some time. With recent Q4 result I think the price will inch slowly towards RM 10 till the announcement of next quarter result. For the share price to grow to RM 10, it requires annual EPS of close to RM 1 and annual dividend that is close to 60 sen, in view of rising interest rate environment and trend.

1 month ago

Fabien _the efficient capital allocator

EPS at RM1, you are implying PE of 10x. HLI has always trade above 10x multiple because if you striped out their net cash (which is about 50% of market cap), it's ex-cash PER is less than 7x.

1 month ago

Sardin

I'm trying to be conservative

1 month ago

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