From news report last week, L&G's management aims to achieve a market capitalization of RM500mil by the end of 2014 or in early 2015. It might also give bonus issue next year.
Currently L&G's market cap stands at approximately RM397mil at share price of 57sen. To reach RM500mil market cap, it is still 26% short. Does the management hint that its share price will appreciate 26% to 72sen by year end?
Actually it's not that way. L&G's management expects shareholders to convert their loan stocks (ICULS) to ordinary shares to increase its market cap.
As of today, L&G has 695.7mil issued shares & 500.9mil ICULS. Its total mother shares have increased by 10% since Dec 2013 due to conversion of loan stocks.
L&G's FY14 ended Mac14 generates a PATAMI of RM75.3mil, which is a superb 71% improvement from FY13's RM44mil. Its 50%-owned Elements @ Ampang project is fully completed while the wholly-owned Damansara Foresta phase 1 is only 30% completed.
If all ICULS are converted to mother shares, L&G's diluted EPS for its FY14 should be at 6.3sen. This makes current share price at 57sen quite attractive.
As L&G will only launch its next project in the first quarter of calendar year 2015, its next 3 quarter's earning (FY15Q1, Q2 & Q3) will be mainly supported by Damansara Foresta phase 1 which has a GDV of RM800-900mil.
L&G plans to launch 3 projects with total GDV RM2bil early next year, which are:
- Elements@Ampang: 4 towers, 1,000 units, GDV RM800mil (50:50 JV)
- Foresta phase 2 & Tuanku Jaafar Seremban: combined GDV RM1.2bil
Meanwhile, L&G also plans to convert its 2,500 acres of plantation land in Ladang Sungai Jernih, Lembah Beringin, to a township with a GDV of RM100 BILLION! (any typing error?)
The initial master plan of this northern Selangor new township may be unveiled as early as next year!
Possible site of L&G's land. Is it too far away?
L&G has about RM164mil of net cash in the end of Mac14. It will reward shareholders with its first dividend in n years. The dividend will be 2 sen per share, representing RM23.9mil or 31.8% payout if all loan stocks are converted to mother shares.
If L&G is able to achieve 50% sales from its RM2bil worth of projects launched in 2015, then I think it should be good enough.
As for the RM100 billion township, the location seems not as strategic & promising as southern Klang Valley...
As for the RM100 billion township, the location seems not as strategic & promising as southern Klang Valley...
do u think L&G worth to invest? I'd been eyeing for this counter for quite some time.
ReplyDeleteFor me I'll watch first. Perhaps worth for long term but I'm not too confident it can repeat the phenomenal take-up rate for its subsequent luxurious properties.
Deletethe best time to invest in L&G is over. U will make a fortune if u invested in it's LA-R when it was first trade below 10sen
ReplyDeleteMay be can still earn a bit, as it's still a bit undervalued :)
DeleteDear BD, given that L&G has since rise 18.4% since your last article, is currently price 0.675 attractive? If yes, what is the short term target price and mid term TP?
ReplyDeletePlease advice.
I don't have a TP for L&G. If loans stocks are to be considered, current price is fully valued as mentioned in this article, but I think this stock has momentum to go higher. If you are confident that its FY15 will be better than FY14, then it might still be a good investment.
Delete