Posted by EngineeringProfit > 2018-02-09 10:39 | Report Abuse

Looks like a day after 'good bye' becomes a 'good buy'day

Profitable,huh

Posted by Anthem2 > 2018-02-10 13:47 | Report Abuse

That one off impairment is masking its true intrinsic value. Factor in the average EPS growth, look at it's EV multiples and price to free cash flow ratio, you've got a gem that's moving under everyone's radar.

Posted by LeeFoundation > 2018-02-12 15:22 | Report Abuse

Now looking actively at Petronm for its low pe high net cash biz.

Anything below 13 is still a good and fair valuation for Petronm. Look at just the fcf alone, smart investors will not easily let this counter go off from their radar.

Posted by sosfinance > 2018-02-20 09:38 | Report Abuse

Vietnam growth may be one of the catalyst for its Yamaha motorbike business coupled with recovery of sales in Malaysia. Yamaha is a sustainable "brand" and "moat". It's just waiting for more investors to discover it.

Forget about the price first (RM10.98), go get an estimates of the value, then compare with the price. Always look at 2-3 years in advance, if you can see something/catalyst that others haven't seen it, your return will be above consensus.

Posted by sosfinance > 2018-02-20 11:07 | Report Abuse

consumer stocks are sensitive to inflation and interest rates as well. price increase is common with better features. (one cent increase for coke is equal to additional USD6.45 billion profits).

Posted by x3mg33 > 2018-02-20 17:11 | Report Abuse

About time...11.20

Posted by miketyu > 2018-02-20 21:28 | Report Abuse

what happen

Posted by Tradewinds > 2018-02-20 23:48 | Report Abuse

Realisation of true value.

Posted by alextan5680 > 2018-02-27 07:51 | Report Abuse

Undervalue hlind continue ur north trip

Posted by gabriel1985 > 2018-03-01 12:32 | Report Abuse

Just keep and leave it. Good share.

Posted by Flintstones > 2018-03-01 20:22 | Report Abuse

This stock is creeping up quietly. It reminds me a lot about padini. High free cash flow, high dividend and growth

Posted by sosfinance > 2018-03-01 20:48 | Report Abuse

Don't sell until its Vietnam Yamaha reach maturity (of course if the price runs a lot faster than the fundamental, we have to run first).

Posted by NoPlayBall > 2018-03-08 14:09 |

Post removed.Why?

Posted by padi23 > 2018-04-19 11:23 | Report Abuse

when dividend?posible 40c

Posted by jordanmaggie61 > 2018-04-19 12:06 | Report Abuse

wonderful

Posted by lyk204 > 2018-04-26 10:36 | Report Abuse

Dividend ex-date is 8thMay2018.Entitlement date is 11th May 2018.22sen per share and a special dividend of 10 cent per share

Posted by Lioncity > 2018-05-17 14:13 | Report Abuse

Less ppl notice this counter which is also a Consumer stock, cash rich while PE is only 12. Price yet to move much. Good to enter.

Posted by KingsMan > 2018-05-19 14:03 | Report Abuse

Low profile stock but cash rich..

Posted by kingJ > 2018-05-24 11:51 | Report Abuse

I think should the foreign funds come in, they would surely pick up those rediculesly under value share like this

Posted by Lioncity > 2018-05-25 20:05 | Report Abuse

12.22 New high. Sweet.

Posted by kywoo > 2018-06-13 20:58 | Report Abuse

Review of company,s performance based on 3rd quarter results.

(1) sales
9 months 2018 RM 1.9 billion (+11% )
9 months 2017 RM 1.7 billion (+6% )
9 months 2016 RM 1.6 billion (0 % )
9 months 2015 RM 1.6 billion

(2) Net profit due to HLI shareholers
9 months 2018 RM 228 million (+10%)
9 months 2017 RM 207 million (+16%)
9 months 2016 RM 178 million (+37%)
9 months 2015 RM 130 million (+ 5%)
9 months 2014 RM 124 million (+28%)
9 months 2014 RM 97 million

The profit to shareholders have been increasing every year The only exception was in 2017 when company has to write off RM 176 million due to its investment loss in a newsprint company in the final quarter of 2017. Hence, the final profit results for 2018 will show an increase of about 200% over that of 2017.
Projected net profit to shareholders for 2018 RM 310 million ( EPS $1.00)
Actual net profit to shareholders for 2017 RM 103 million ( EPS $0.33)

The company's shares is currently trading at a PE of around 11. A fairer PE should be around 15. Hence there is still a lot of room for the share price to increase given the current low valuation and fantastic profit growth potential.

(3) Motorcycle business profit contrbution

Although HLI is better known as a building material manufacturer and supplier, the fact is that the building material business contributes to only about 4% of total net profit. 96% of total group profit actually comes from the motorcycle business. That is why the profit potential for future profit growth is tremendous given the fact that its Yamaha brand is doing very well both locally and in Vietnam.
Perhaps, the company should be renamed as Hong Leong Yamaha Industries to reflect the importance of its motorcycle business.
9 months total 2018 9 months total 2017 9 months total 2016
Motorcycle profit (Local) RM 171.9 million RM 119.5 million RM 97 million
Motorcycle profit (Vietnam) RM 97 million RM 108 million RM 79 million
Total motorcycle profit RM 268.9 million RM 227.5 million RM 176 million
HLI Group profit RM 279 million RM 243 million RM 207 million
Overall motorcycle share 96.3% 93.6% 85%

The profit contribution from Yamaha Vietnam varies quite a bit from quarter to quarter. There should not be undue alarm that the 3rd quarter 2018 profits dropped quite a fair bit Just look at the following,
Q1 2017 RM 30.7 million
Q2 2017 RM 37,3 million
Q3 2017 RM 40.6 million
Q4 2017 RM 25.0 million
Q1 2018 RM 32.8 million
Q2 2018 RM 38.4 million
Q3 2018 RM 26.0 million
Q4 2018 RM 32.4 million (projected)

The motorcycle business is very secured and profitable as there is always a demand irrespective of the state of the economy. With a strong and well accepted brand like Yamaha, competition is limited. The only real competitor is Honda. In recent years Yamaha is eating into Honda's market share in the local market as well as in Vietnam. Other brands are not as successful in gaining market share. Demand in the coming months in Malaysia would even be better with the 0 rated GST.

(4) Group cash position

One of the strongest item in the balance sheet is the speed and quantum of cash accumulation over the last few years. There are not many listed companies that can build up their cash holdings so consistently and so rapidly. Net cash position ( Cash in bank less bank borrowings) is as follows

As of june 2015 RM 170 million
As of june 2016 RM 271 million
As of june 2017 RM 425 million
1st Q 2018 RM 512 million
2nd Q 2018 RM 568 million
3rd Q 2018 RM 645 million
As of june 2018 RM 720 million (projected)

In 2018 financial year cash holding is increasing at average of RM 73.3 million per quarter. The net cash backing per share is about RM 2.00. Actually, accumulating so much cash without any plan for immediate capital expenditure is poor cash management. The excessive cash pile should be returned to shareholders in the form of more generous dividends. The current dividend payout ratio is far too conservative. Management should consider rewarding shareholders and maximizing their share values through a high dividend payout. A generous dividend payout always lead to higher PE awarded.

Posted by x3mg33 > 2018-06-14 17:24 | Report Abuse

great insight and review @kywoo. I couldn't agree more.

Posted by x3mg33 > 2018-06-14 17:31 | Report Abuse

...." Management should consider rewarding shareholders and maximizing their share values through a high dividend payout. A generous dividend payout always lead to higher PE awarded..." This million dollar question deserves some serious answering from management, internal capital expansion albeit at its optimum, can be ruled out given the current market climate, i really do not see the need to sit on so much cash! This is one of the most conservative and well managed counters in KLSE but also the most frugal one when it comes to dividend payout. Dividend policy over the years have been rather obscure.

Posted by investodiva > 2018-06-18 15:34 | Report Abuse

Why la Quek keep on disposing ?

Posted by kingJ > 2018-06-18 23:14 | Report Abuse

Another capital reduction excercise coming?

Posted by investodiva > 2018-06-19 00:05 | Report Abuse

Why say so?

Posted by investodiva > 2018-06-19 00:08 | Report Abuse

Why say so?

Posted by Lioncity > 2018-06-19 11:02 | Report Abuse

Accumulate on price weakness.

Posted by kywoo > 2018-07-09 21:51 | Report Abuse

So far no one has ever taken the trouble to examine and study the market value versus the book value of the land bank held by Hong Leong Industries. The land bank totaling 18.64 million sq ft of industrial land acquired by the group more than 15 to 25 years ago has never been revalued. If one is to study the acquisition cost of the various plots of land from the annual reports one will find that the book value as reported to be extremely low in relation to current market valuation. Furthermore, most of the plots are located within or nearby urban settings.

The following can be found from the latest annual reports;

6.14 million sq ft freehold industrial land with total book value of RM 45.3 million.
Hence, book value per sq ft is RM 7.38

10.5 million sq ft leasehold industrial land with book value of RM 24.0 million
Hence, book value per sq ft is RM 2.30

If the company is to revalue or dispose of the land today it is likely to fetch at least RM 150.00 per sq ft for freehold land and RM 80.00 for leasehold land. (This is just a very conservative assumption) If this be the case the revaluation is as follows;

6.14 million sq ft freehold land @ RM 150 per sq ft is valued at RM 921 million
10.5 million sq ft leasehold land @ RM 80 per sq ft is valued at RM 840 million

Total current market value is RM 1,761 million
Total book value at cost is RM 69.3 million
Total revaluation surplus is RM 1,692 million

The total shareholders fund as of 31st March is RM 1,563 million. With the revaluation surplus, the shareholders fund would increased by more than 100% to RM 3,255 million. The Net Asset backing per share would be more than RM 9.00.

As a company is always treated as a on going concern, the intrinsic value of its assets is not of immediate importance. It is only important in the event of the takeover party liquidating the assets for extraordinary capital gain. Hence, Hong Leong Industries is very attractive for privatization both for its under valued land bank and the huge pile of cash holdings. As a minority shareholder I hope privatization would never happened as this is truly a very strong and profitable company.

With zero rated GST effective from June 2018, sales of motorcycles will spike in the next 12 months or more. One can expect the company to report very good financial results for the next few quarters. This company is under rated and there is much room for its share price to reflect its true potential value.

Posted by x3mg33 > 2018-07-09 22:08 | Report Abuse

Full year results worth the wait when released in Aug 2018.

Posted by Lioncity > 2018-07-12 18:03 | Report Abuse

Sell volume is quite aggressive, today manage to queue at 11 and got it, still a little worried why so much sell down.

Posted by Lioncity > 2018-07-24 16:57 | Report Abuse

Aww 11 support broke...

Posted by Lich > 2018-07-28 23:27 | Report Abuse

https://seeking-alpha.com/2018/07/28/hong-leong-industries-bhd-rm13-31-thanks-mat-rempit/

Posted by x3mg33 > 2018-07-30 16:15 | Report Abuse

I refer to the link on the valuation written and posted earlier.

https://seeking-alpha.com/2018/07/28/hong-leong-industries-bhd-rm13-31-thanks-mat-rempit/


I have been studying and following developments on this counter for quite some time now. Most of the comments and assumptions are valid and spot on. Whilst most of the write up are based off available facts and figures and to safely arrive on a valuation model, I would like to add on some pertinent points not mentioned here.

1) Strength of balance sheet and cashflow: This counter has a very strong balance sheet with solid fundamentals on the assets coupled with very low gearing ratio (extremely low). The net cashflow from the last Q reported stood at in the region of MYR 700mil. Not many companies, infact I can say just a handful would have such staggering amount. You would appreciate for a company to operate financially well, cash is afterall, still king.

2) P/E: Current PE is just under 11 and is far below its peers and consumer segment FBMKLCI. The consumer segment benchmark PE would be between 15-20. Earnings from previous quarters and coming quarter would bring the total EPS for the year to MYR1.00. Conservatively, this company would be able to trade at 15 PE hence bringing a valuation of MYR 15.00. I can easily name a few companies with ridiculously high PE but backed with poor balance sheet and growth potentials listed in the local bourse, best is, they are heavily traded by institutions because of spreads.

3) Dividend: for a counter to attract investors, it should also reward investors with strong returns. this counter has been paying decent dividends over the years, within circa 40-42sens for the past financial years. This translates to a dividend yield of just 3.8%. I would expect a yield of 5-6% based on the dividend yields trend from the past. Conservatively if a yield of 5% is applied at a price of MYR 15.00, this would translate to a dividend of 75sens per year. This would sure attract investors to the fold. The company is able to pay such a dividend with its strong cashflow and distributable reserves.

This counter is very conservative and has been under the radar for a quite some time and is truly a diamond in the sand. It bears the Hong Leong brand of companies under its founder Mr Quek, known for its shrewd business model and acumen. You can hardly go wrong under the HL belt. Value investors would appreciate highly such a counter..... if they ever notice.

Just exchanging views here really, happy to share and discuss more so we can learn from each other. Thanks.

Posted by kywoo > 2018-07-31 03:56 | Report Abuse

Well said. In a way what you are saying basically endorsed what I have said in all my previous write ups. Anyone buying into this company is buying the business prospect of Yamaha motorcycles in Vietnam and Malaysia. One can forget the building material business as it contributes peanut to the company's net profit.(ie 3%) In fact, the motorcycle business is doing so well that the company is on an auto pilot mode. It is the only company in Bursa that does not have a full time CEO for many years now. The chairman is a non executive chairman and earns a directors fee only. Hence total directors remuneration is very low in relation to total revenue and profits.This is indeed very kind to the minority shareholders as company expenses are minimized.

If only the company can improve on two areas the stock can really fly and reach a PE of 15 to 18.

Firstly. in its annual reports and quarterly announcement the management need to be far more transparent. For example, one can never find out its actual motorcycle sales and their market share in both the Malaysian and Vietnam markets. In the annual report motorcycle sales and profit are lumped with those of the ceramic tiles business disguised as contribution from Consumer Products.
Obviously, this not fair to the minority shareholder reading the reports. When the company has to write off its investment in Malaysia Newsprint in 2017, no warnings were given in previous reports that the newsprint business was doing so badly. Hence, future annual reports need substantial improvement in transparency.

Secondly, the dividend payout rate can be much higher as the cash pile is building up too fast. The return on shareholders fund is in fact declining as shareholders fund is growing faster than profits. Since the company has no need of immediate capital expenditure or acquisitions the cash can be returned to shareholders by means of a more generous dividend policy. Based on an EPS of 1.00 a dividend of 75 sens or more is not unreasonable.

I hope the board will take note of what we say here and respond accordingly.

Posted by Lioncity > 2018-08-03 10:24 | Report Abuse

Volume spike yesterday, consolidation could be ending soon, accumulation between 10.88-11.10 range. Qtr report is coming in 2 weeks time.

Posted by Lim Tek Wai > 2018-08-03 11:21 | Report Abuse

Very nice

Posted by Lioncity > 2018-08-03 16:52 | Report Abuse

Good closing today, high 11.60, closed 11.48. More to come next week don’t stop.

Posted by Lioncity > 2018-08-27 16:59 | Report Abuse

Long waited qtr report. Retest 11 supporting line again. And I pick up more today.

Posted by alextan5680 > 2018-08-28 19:41 | Report Abuse

Super QR tomorrow fly

Posted by Lioncity > 2018-08-28 20:02 | Report Abuse

Actually not really, there’s a 60 mil write back impairment as per written inside the report. (See page 10). Profit before tax actually decreased qoq due to festive season & holidays. Well let’s see how market react tomorrow.

Posted by lizi > 2018-08-28 21:43 | Report Abuse

yup, without the write back, it is the worst profit before tax for the past 11 quarters.

Posted by shpg22 > 2018-08-29 12:54 | Report Abuse

HLIND is more of a dividend stock than growth. P/E is less important in valuing than DY. Its FCF is at record high, meaning dividend likely to be increased ahead. In facts its FCF had increase by 38% YoY. HLIND is a text book example of a strong and growing FCF company.

Posted by shpg22 > 2018-08-29 20:32 | Report Abuse

I m expecting a min 50 cent div for FY19 compare to 47 cents last year, translating to a DY of 4.0% @ fair price of 12.50.

Posted by ongkkh > 2018-11-12 21:03 | Report Abuse

Qtr result is out, declare 15c div

Posted by Pang > 2018-11-15 16:22 | Report Abuse

Hlind Net cash RM860.5 mil

Posted by Lioncity > 2018-11-30 16:44 | Report Abuse

Today both Quek’s company mpi & Hlind drop -10% & -6% respectively, both are cash rich & fair PE, just wondering what happen Aiyo.

Posted by shareinvestor88 > 2018-11-30 18:55 | Report Abuse

sell tp 3

Posted by trulyinvest > 2018-11-30 22:48 | Report Abuse

Out of shariah compliant list. Islamic funds unload

Posted by shpg22 > 2018-12-01 22:06 | Report Abuse

Sell sell don't wait.