Tuesday, September 2, 2014

LONBISC 4Q14 Result +28% YoY



1.       4Q14 EPS jumped 20% to 2.14 sen as net profit increased 28% YoY to RM3.16m. The higher net profit is caused by better PBT margin at 6.0% against 4Q13’s 2.4%. This should be caused by lower commodity prices globally in the current quarter. As for full year, FY14 EPS gained 8% to 9.68 sen as revenue is up 24% to RM360m.
2.        Positive outlook for FY15 given the increase in production line (confectionery segment). This should allow new business opportunities to be secured.
3.        Book value increased to RM2.11 from RM2.10 on Jun-2013. Current share price of RM0.845 means there is still 60% discount to the full book value of RM2.11.
4.        Theoretical Fair Value of RM1.05 based on 10x FY15 Fwd. PE. Assuming LONBISC can deliver same performance for FY15, its FY15 EPS should be 10.5 sen (+8% YoY). Based on 10x Fwd PE (similar to Small Cap PE), this stock is easily worth RM1.05 or 24% upside from current price.

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