Sj tan, the correct question to ask is whether litrak board will liquidate the company and distribute the cash to shareholders. If they suddenly say want to find new business....we have a problem.
Price (RM) : 3.90 EPS (cents) : 50.16 PE : 7.7 Div (Cents) : 25cents (6.4%)
The company is having RM 765 Mil current asset and RM240 Mil current liabilities. The company is paying RM 200 Mil to its SUKUK , and estimated fully paid in April 2023.
SUKUK interest range from 4.6% to 6.0% , assume 5.3% (Mid point ) , every RM200mil paid will save RM10.6 mil interest per annum. (2sens EPS). Upon fully paid of RM 779mil SUKUK on 2023, interest saving per year will be roughly (RM 41.28 / 7.7sens per annum).
Thus the EPS is expected to be higher in coming year.
2. MCO is partly lifted , i believe litrak will be one of the fastest recover stock.
3. There are chances of LDP concessionaire contract to be extended due to MCO / COVID (Force Majure).
Neither party is in breach of their obligations if they are unable to perform or fulfill any of their obligations as a result of the occurrence of an event of force majeure. An event of force majeure shall mean an event not within the control of the party affected which that party is unable to prevent, avoid or remove and shall include:
i. War hostilities, invasion, act of foreign enemies, rebellion, revolution, insurrection, military or usurped power, civil war, terrorism;
ii. Ionizing, radiation or contamination by radioactivity from any nuclear waste, from the combustion of nuclear fuel, radioactive toxic explosive, or other hazardous properties of any explosive, nuclear assembly or nuclear component thereof;
iii.Pressure waves caused by aircraft or other aerial devices travelling at sonic or supersonic speeds;
iv. Natural catastrophe including but not limited to earthquakes, foods subsidence,lightning and exceptionally inclement weather; and
v. Riot and disorders, criminal charge, sabotage, strike, lock out, labour unrest or other industrial disturbances (affecting the performance of the Concession Agreement) which are not the fault of the Concession Company or its contractors, which causes, or can reasonably be expected to cause either party to fail to comply with its obligations.
If an event of force majeure occurs, the Concession Period may be extended for such period as the parties thereto may agree, or in the absence of such agreement, as shall be determined by the Minister.
Well said.. The only concern I have for litrak is whether they are able to negotiate with the current gov to extend their concession tenure beyond year 2030. If the gov grants them extension even with reduced toll rate is still better off for them given their their borrowings is going to be fully paid in year 2023.
If LITRAK able to fully paid the in year 2023, after that all the earning will be use for highway maintenance and dividend? dividend will be very very thick then! Please correct me if I'm wrong.
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....
Sj Tan
7 posts
Posted by Sj Tan > 2019-07-09 15:27 | Report Abuse
The share price spike up once Gov announced to take over the highway. But in long term, it will affect its revenue right? Any sifu can explain to me?