2015年2月20日星期五

Insider Asia’s Stock Of The Day: Land & Gener

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Author: Tan KW   |   Publish date: Wed, 18 Feb 17:11


Land & General (L&G) (Fundamental: 3/3, Valuation: 3/3) is one of Malaysia’s oldest property companies, and is synonymous with the development of Bandar Sri Damansara. The company was badly hit during the 1997-98 Asian financial crisis, and spent the next decade restructuring its debts.
These restructuring efforts have since borne fruit. After several years of large losses, L&G has been consistently profitable since FY March 2006.  From FY2010 onwards, its financial performance improved significantly as a strengthened balance sheet, the entry of new substantial shareholders (the Mayland Group) and the property market boom gave rise to increased launches.  
In FY2014, L&G’s revenue increased more than two-folds to RM491.9 million while its net profit jumped 71.3% to RM75.3 million. For 1HFY15, revenue grew 58.1% to RM363.5 million y-o-y while net profit rose 168.2% to RM89.9 million.
Its ongoing Elements@Ampang and Damansara Foresta projects are near completion and have locked in over 90% sales. Going forward, the company plans to launch projects worth RM2 billion in the medium term, comprising serviced apartments adjacent to Elements@Ampang, Damansara Foresta Phase 2 and Tuanku Jaafar Homes.
While the property market is soft, L&G’s existing projects are well located in matured areas. Looking much further out, it has about 2,500 acres in Lembah Beringin, north of Bukit Beruntung and Rawang.
L&G has a solid cash-rich balance sheet. As at 1HFY2015, net cash stood at RM360.1 million, equivalent to 34 sen per share or nearly two-third of its current share price of 52.5 sen. The company started to pay dividends in FY2014, amounting 2 sen per share or a yield of 3.8%.
L&G is trading 7.9% below its September 2014 book value of 57 sen with a trailing 12-month P/E ratio of 4.2 times. However, investor should note that there are 145.9 million of ICULS outstanding, which if converted could potentially dilute earnings and net assets by 14%.
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This article first appeared in The Edge Financial Daily, on February 18, 2015.

http://www.theedgemarkets.com/my/article/insider-asia%E2%80%99s-stock-day-land-general

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