SG Investor Hub Blog

Lee Metal at least 6% dividends since 2009!!

been looking ard for something other than Banking shares. In fact, bank shares are a little too high for now. Lee Metal issues about 6% dividends or more constantly. Certainly better than some blue-chip shares. Noticed this as the volume has been increasing and chart wise it has been moving out of the down channel for a while.

I compiled some info for referencing. Available for CPF investing too.

Profitable since 2005 (that’s as far as I can go from the 2009 annual report)
Despite being in a cyclical industry, Lee Metal has been profitable since 2005, even in 2008/2009.

S$m
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
Sales
690.3
1,112.5
1,537.7
1,471.4
983.9
831.5
773.6
696.2
635.9
519.3
445.4
318.6
Net profit
7.1
10.3
15.5
20.4
29.9
22.5
18.9
26.9
40.2
33.1
15.6
13.3
EPS
0.020
0.025
0.035
0.040
0.058
0.048
0.040
0.057
0.085
0.070
0.033
0.028
DPS
0.002
0.018
0.012
0.013
0.030
0.025
0.020
0.025
0.035
0.030
0.020
0.020
payout
10.2%
71.1%
34.0%
32.6%
51.7%
52.1%
50.1%
44.1%
41.4%
43.0%
61.0%
71.2%

STRONG free cash flow generation yield of more than 20%!! In the last 3 years
While profit has declined with the tough environment, FCF yield has remained at least 9% in the last 5 years. For FY16, generated 20% free cash flow yield!!!

2012
2013
2014
2015
2016
OCF          63.5          23.7          43.6          74.1          31.1
Capex        (13.0)        (10.7)          (5.5)        (19.9)          (2.8)
FCF          50.5          13.0          38.1          54.3          28.3
PBT          32.0          47.9          37.6          18.4          14.8
Dep            4.9            7.0          10.1          11.8          10.7
FCF yield
36.1%
9.3%
27.2%
38.8%
20.2%
FCF/share        0.106        0.027        0.080        0.114        0.060

With its strong cash flow generation- has moved from net debt of S$80m in 2013 to net cash of S$8.5m in just 3 years, and that is while paying S$0.085 of dividends in total from 2013-2015!

2012
2013
2014
2015
2016
cash
25.2
50.0
46.1
68.7
69.1
fixed deposit
48.7
65.2
42.9
27.8
28.8
debt
(139.2)
(195.8)
(142.5)
(105.3)
(89.3)
net cash
(65.2)
(80.7)
(53.5)
(8.9)
8.5

Good pay master
Has been constantly paying out dividends. While DPS was cut in 2015, it still translates to 6.8% yield.

2012
2013
2014
2015
2016
DPS
0.0250
0.0350
0.0300
0.0200
0.0200
EPS
0.0567
0.0846
0.0698
0.0328
0.0281
payout
44.1%
41.4%
43.0%
61.0%
71.2%
FCF yield
36.1%
9.3%
27.2%
38.8%
20.2%
FCF/share
0.106
0.027
0.080
0.114
0.060
dividend yield
8.5%
11.9%
10.2%
6.8%
6.8%

Improving outlook?- is the worst over? , coming off a low base?

We note that profit has dropped from S$40m in 2013 to S$13.3m in 2016. (although we note that part of it is due to higher depreciation expense (non-cash)) . 2017 construction demand is expected to be between $28b-35b , similar to 2016 of $27b-34b. + Steel prices have been on the rise…

Valuations: Currently trading at 10.5x PE, not cheap. But given the strong free cash flow generation and good dividend yield and excellent track record of earnings. Believe it is worth a look (esp with the volume in the chart see next few pages)

Daily chart- interesting surge in volume with prices remaining stable between S$0.29-0.295.

Weekly chart

Look at the long monthly tails in 2015- breakout to S$0.355

Dividend Payouts over the last 10 years

Dividend Yield(TTM) = 6.90%

Year Yield Amount Ex Date Pay Date Particulars
2017 3.45% SGD 0.01 2017-04-26 2017-05-22 SGD 0.01 ONE-TIER TAX
2016 6.90% SGD 0.003 2016-11-21 2016-12-09 SGD 0.003 ONE-TIER TAX
SGD 0.005 2016-08-31 2016-09-15 SGD 0.005 ONE-TIER TAX
SGD 0.002 2016-06-08 2016-06-24 SGD 0.002 ONE-TIER TAX
SGD 0.01 2016-04-27 2016-05-23 SGD 0.01 ONE-TIER TAX
2015 6.90% SGD 0.003 2015-11-23 2015-12-11 SGD 0.003 ONE-TIER TAX
SGD 0.005 2015-09-01 2015-09-16 SGD 0.005 ONE-TIER TAX
SGD 0.002 2015-06-08 2015-06-24 SGD 0.002 ONE-TIER TAX
SGD 0.01 2015-04-28 2015-05-22 SGD 0.01 ONE-TIER TAX
2014 12.07% SGD 0.003 2014-11-24 2014-12-12 SGD 0.003 ONE-TIER TAX
SGD 0.005 2014-09-01 2014-09-16 SGD 0.005 ONE-TIER TAX
SGD 0.002 2014-06-06 2014-06-24 SGD 0.002 ONE-TIER TAX
SGD 0.01 2014-04-28 2014-05-23 SGD 0.01 ONE-TIER TAX
SGD 0.015 2014-04-28 2014-05-23 SGD 0.015 ONE-TIER TAX
2013 8.62% SGD 0.003 2013-11-25 2013-12-13 SGD 0.003 ONE-TIER TAX
SGD 0.005 2013-08-30 2013-09-16 SGD 0.005 ONE-TIER TAX
SGD 0.002 2013-06-06 2013-06-24 SGD 0.002 ONE-TIER TAX
SGD 0.005 2013-04-30 2013-05-23 SGD 0.005 ONE-TIER TAX
SGD 0.01 2013-04-30 2013-05-23 SGD 0.01 ONE-TIER TAX
2012 6.90% SGD 0.003 2012-11-23 2012-12-14 SGD 0.003 ONE-TIER TAX
SGD 0.005 2012-08-29 2012-09-14 SGD 0.005 ONE-TIER TAX
SGD 0.002 2012-06-05 2012-06-22 SGD 0.002 ONE-TIER TAX
SGD 0.01 2012-05-03 2012-05-25 SGD 0.01 ONE-TIER TAX
2011 8.62% SGD 0.003 2011-11-29 2011-12-16 SGD 0.003 ONE-TIER TAX
SGD 0.005 2011-08-29 2011-09-16 SGD 0.005 ONE-TIER TAX
SGD 0.002 2011-06-07 2011-06-24 SGD 0.002 ONE-TIER TAX
SGD 0.01 2011-05-03 2011-05-27 SGD 0.01 ONE-TIER TAX
SGD 0.005 2011-05-03 2011-05-27 SGD 0.005 ONE-TIER TAX
2010 6.90% SGD 0.003 2010-11-29 2010-12-17 THIRD SGD 0.003 ONE-TIER TAX
SGD 0.005 2010-08-30 2010-09-17 SGD 0.005 ONE-TIER TAX
SGD 0.002 2010-06-14 2010-06-25 FIRST INTERIM SGD 0.002 ONE-TIER TAX
SGD 0.01 2010-05-03 2010-05-27 SGD 0.01 ONE-TIER TAX
2009 6.90% SGD 0.003 2009-11-26 2009-12-18 THIRD INTERIM SGD 0.003 ONE-TIER TAX
SGD 0.005 2009-08-21 2009-09-11 SGD 0.005 ONE-TIER TAX
SGD 0.002 2009-06-08 2009-06-25 SGD 0.002 ONE-TIER TAX
SGD 0.01 2009-04-30 2009-05-28 SGD 0.01 ONE-TIER TAX
2008 4.48% SGD 0.003 2008-08-21 2008-09-12 SGD 0.003 ONE-TIER TAX
2008-08-11 1 WT FOR 5 SH OFFER OF 1 FOR 5 @ SGD 0.05
SGD 0.01 2008-04-25 2008-05-15 SGD 0.01 ONE-TIER TAX
2007 3.45% SGD 0.002 2007-08-20 2007-09-05 (LST INTERIM) SGD 0.002 LESS TAX
SGD 0.008 2007-04-27 2007-05-16 SGD 0.008 LESS TAX

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STI 3100? Is this Rally actually sustainable?

 Market sentiment will be driven by whether Wall Street can sustain its red-hot rally as the local corporate results season drawing to close, with attention turning to US President Trump’s first address to Congress tomorrow for more details on his fiscal plans, and China’s manufacturing data mid-week.

In addition, Yellen will be addressing this Sat morning 2 am (SG timing). This will be the last address to have some rough gauge and estimate if Feds will be hiking the rates on March 15.

Stocks and bonds are again moving in tandem after diverging in recent months—a sign some investors may be losing faith in the so-called reflation trade. This has been happening since last year. By definition, stocks and bonds should be in opposite directions. But it is not the case, which can be worrying and confusing. I think one of the possible reasons could be foreign investors buying into US bonds, taking some exposure on USD. Personally, I am still waiting on the sidelines for US shares; most of my holdings are in SG as I have better insights.
 
Relooking at STI index, I personally feel that it has been on the high side for quite
some time. It seems possible and logical for some profit takings, STI pulling back to 3050 range. Depending how fast the pullbacks are, preferably it should not break the yellow channel. If not, it is possible to challenge the 3000 mark again. Chart as attached.

Fundamentally, I think the US may not increase rates without knowing Trump’s policies. Thus if Trump did not address and present his policies in detail tomorrow, there may be a chance that Feds may not hike and hold back that option on 15th March.  Yet again, my guess is as good as yours.

In other news, Nokia seems to be making a comeback, relaunching the iconic model of 3310. It promises a battery life lasting up to a month, which is awesome in today’s context. Should you be keen to buy Nokia shares in Finland market, it is available for your trading account too. Nokia Corp (HEL:NOKIA)


click to enlarge












Stocks to watch:
*Venture: 4Q16 net profit jumped 20.6% to $54.1m, taking full year earnings to $180.7m (+17.3%), surpassing estimates; Quarter revenue rose 23.1% to $854.6m from new products/programmes, and growth from existing products. Pretax margin was maintained at 7.6%, while bottom line was partially weighed by a $22.6m legal settlement cost. First and final DPS of $0.50 was maintained. MKE maintains buy with TP of $11.50.

*UOL: FY16 net profit declined 27% to $287m, missing estimates. Revenue climbed 13% to $1.44b, lifted by strong property development sales (+27%) on higher progressive recognition of Riverbank@Fernvale, Botanique at Bartley and Principal Garden. Hospitality operations (+2%) benefitted from better performance at Australian hotels. But bottom line was weighed by lower share of profits from JVs of $4.3m (FY15: $29.1m) and a $9.7m fair value loss on investment properties (FY15: $60.9m gain). Maintained first and final DPS of $0.15. Trading at 0.66x P/B. MKE last had a Buy with TP of $7.39.

*Golden Agri: 4Q16 net profit of US$46.3m (+136.7%) brought FY16 earnings to US$399.6m (FY15: US$10.4m), within expectations. For the quarter, revenue grew 37.8% to US$2.1b on the back of a 37% jump in CPO prices and 7% increase in output. But earnings were hit oilseeds losses and a US$34.3m impairment in China. Bottom line was buttressed by a US$62m deferred tax income arising from tax-based asset revaluations. First and final DPS raised to 0.635¢ (FY15: 0.502¢).

*CWT: FY16 net profit tumbled 32% to $73.6m, below estimates. Revenue slipped 7% to $9.3b, as commodity marketing (-7.2%) was impacted by lower ASPs and volumes, while logistics (-4.2%) suffered from slower trade flow. Excluding exceptional items, largely comprising expenses accrued to an ongoing project and a $6.7m withholding tax, operating profit was $110.1m. Slashed first and final DPS to 3¢ (FY15 total payout: 9¢). Trading at 43% premium to its NAV/share of $1.456.

*Pacific Radiance: 4Q16 net loss deepened to US$36.2m (4Q15: US$2.6m loss) on impairments (US$12m), FX loss (US$2.2m) and disposal loss (US$6.8m). This pulled FY16 net loss down to US$118.6m (FY15: US$3.8m profit), below estimates. Revenue for the quarter sank 44% to US$12.1m amid lower utilisation and reduced charter rates for OSVs, while bottom line was further dragged by a spike in finance costs (+69%) on higher borrowings. Net gearing leapt to 1.6x (FY15: 0.86x). No DPS declared (FY15: 1¢). NAV/share fell 28.8% to US$0.408..

*QAF: FY16 net profit surged 129% to $120.4m, bolstered by a $59.4m gain from a partial 20% stake sale in Gardenia Bakeries KL (GBKL). Revenue fell 11% to $889.5m from the deconsolidation of GBKL, but all other segments saw healthy sales. Final DPS of 4¢ maintained, bringing full year payout to 5¢ (unch). NAV/share at 93.8¢.

*Sinarmas Land: Swung into 4Q16 net profit of $46.5m (4Q15: $7.8m net loss), bringing full year earnings to $114.9m (-19.7%). FY16 revenue fell 8.2% to $878.4m from lower sales of land for commercial and industrial purposes, offset by higher residential unit handovers. Gross margin fell 2.2ppt to 66.5% from decreased sales of higher margin land parcels. First and final DPS of 0.19¢ maintained. NAV/share at $0.47.

*Asian Pay TV: 4Q16 DPU slumped 27.8% to 1.625¢, bringing FY16 payout to 6.5¢ (-21.2%). Quarter revenue slipped 2% to $83.9m, dragged by lower contribution in all three segments consisting basic cable TV (-2.1%), premium digital cable TV (-3.3%) and broadband (-1.1%), on the back of lower ARPU and reduced churn rate, despite a 2.2% increase in overall subscribers. Accordingly, EBITDA margin narrowed 2.3ppts to 59.5%. Guided for FY17 DPU of 6.5¢, implying an attractive indicative yield of 13.8%. NAV/unit at $0.85.

*Sunningdale Tech: 4Q16 net profit spiked 63.3% to $21.5m, bringing FY16 earnings to $39.1m (-7.2%). For the quarter, revenue inched 3.4% higher to $184.1m, as higher sales from automotive (+10%) and consumer/IT (+9.6%) was offset by lower contribution from healthcare (-3.4%) and mould fabrication (-16.7%). Gross margin was stable at 13.6% (+0.3ppt), while the bottom line was boosted by one-off gains for FX ($8.4m) and disposal ($5.1m). Raised first and final DPS to 6¢ (5¢). NAV/share at $1.87.

*Sarine: 4Q16 spiked to US$5.0m (+238.5%), lifting FY16 earnings of US$18.0m (+401%) to come in line with consensus estimate. In the quarter, revenue jumped 52.6% to US$18.9m, primarily due to increased diamond manufacturing equipment, Galaxy family systems, in India, as well as higher recurring income. MKE last had a Buy with TP of $1.97.

*SingMedical: Turned in FY16 net profit of $2.4m (FY15: $0.1m loss), lifted by a re-measurement gain of $1.6m. Revenue rose 34.3% to $41.6m from new acquisitions Novena Radiology and Lifescan Imaging, acquired in Apr ’16 and Sep ’16, while gross margin expanded 4.6ppts to 35.8%.*Tiong Seng: FY16 net profit jumped 49% to $15.3m, on higher revenue of $774.3m (+37%) from increased construction contracts (+31%) and sales of development properties (+92%). Bottom line impact from the absence in disposal gains from car park lots and fixed asset were mitigated by a turnaround in JV contribution to $0.9m (Fy15: -$3.1m). Construction order book shrank to $1b (FY15: $1.3b). Raised first and final DPS to 0.8¢ (FY15: 0.5¢). NAV/share at $0.5731..

*Cosco Corp: 4Q16 net loss narrowed 35% to $313m, bringing full year loss to $466.5m (+18%). Quarter revenue of $409.8m (-43.5%) was dragged by reduced income from shipyard (-44%) and shipping (-3.3%). Gross loss worsened to $467.5m from $336.1m, on inventory writedowns. Bottom line saw a $65.4m net writeback of trade receivables (4Q15 impairment: $304.6m), but was partly offset by a 443% surge in taxes to $155.5m from de-recognition of deferred tax assets. NAV/share at $0.1501.

*Soo Kee: 4Q16 net profit growth of 38.4% to $3.1m was partially pared by FX loss of $0.8m. This brought FY16 earnings to $6.5m (-22.6%). Quarter revenue soared 50.2% to $54.7m from contribution of gold and silver dealer SK Bullion, acquired in Apr ’16. While pretax margin was stable around 7%, bottom line was drag by higher taxes (+199%). Maintained first and final DPS of 0.5¢. NAV/share at $0.095.

*Money Max: 4Q16 net profit surged 42.1% to $1.5m, doubling FY16 earnings to $6.2m. For the quarter, revenue of $34.7m (+34%) was led by stronger pawnbroking business and retailing of pre-owned items. Maintained first and final DPS of 0.5¢. NAV/share at $0.1816.

*SUTL: 4Q16 net profit rose 49% to $2.0m, as revenue climbed 9% to $8.1m on increased F&B sales and berthing income, but partly offset by lower membership transfers, entrance fees and subscription base. Expenses (+2%) rose at a slower pace on increased operating leverage. First and final DPS of 2¢ declared (FY15: nil).

*Raffles Medical: MOU signed to explore cooperation between Chongqing Liangjiang New Area Administrative Committee and the Company on healthcare-related projects.*Duty Free Int’l: Proposed placement of 15.6m shares at $0.38 each, to raise net proceeds of $5.7m. The bulk (90%) will be for M&A and/ or potential business opportunities, with the remaining for working capital.

*Koh Brothers Eco Engineering: Awarded a subcontract by Keppel Seghers for civil, structural, piping, marine and architectural landscaping works for Singapore’s fourth desalination plant at Marina East. The contract is scheduled to complete by Jan ’20, and will lift group’s order book to $576.8m from $569.5m.

*Hong Leong Asia: 40.2% owned China Yuchai announced that Saudi Arabia has ordered 321 Xiamen Kinglong buses, which are powered by Yuchai’s heavy-duty engines.

*Yoma: 15:85 JV with Metro Group Wholesale & Food Specialist, to establish a one-stop food distribution platform in Myanmar.

*KS Energy: 80.09% owned KS Drilling was awarded a US$5m contract, utilising the KS Discoverer 6 land drilling rig in Indonesia for eight months.

*Profit warnings:
– Progen
– PSL Holdings
– Midas
– Resources Prima

 

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