· Three business activity & sales %:
i. Management services - 3.74%
ii. Development of properties - 96.03%
iii. Trading of rubber product - 0.23%
· Company website: http://www.lbi-capital.com.my/
· LBICAP is a low profile company; its trading of stock volume is low.
· It hit lot of criteria to pick a good fundamental company, that is:
i. PE low with 5.
ii. High ROE with 16.67%.
iii. Acceptable DY with 3.56%.
iv. High NTA with RM 1.66.
v. V. ROA with 10%.
· But cash flow is the weakness of LBICAP, historical cash flow in category operating and financing activities giving bad result.
· After deduct total bank borrowing from cash holding, LBICAP is a net negative cash company.
· LBICAP should solve its cash problem to be a healthy cash company.
· On the hand, free cash flow of LBICAP is showing healthy and it is increasing in yearly.
· From earning valuation model, it giving intrinsic value RM 2.02.
· The catalyst needed by LBICAP is new property development project.
· In Greenblatt's Magic Formula, earning yield and return on capital giving 11% and 12%% respectively.
· Property development is the source of revenue and revenue of LBICAP. Current LBICAP's townhouse project Desa Saujana 2 at side of completion period.
· Second phase of industrial turnkey development I-Hub@Puchong expected launched this year.
· Project in Section 14, PJ which h comprising 11 units bungalow expected launched by Q3''2015.
· LBICAP also planning to redevelop earlier wet market plan into 24 units’ double storey shop office.
· LBICAP’s bank borrowing need cleared soon because the maturity within one and two years amounted to RM 34,143,262.
· There is uptrend on Revenue, Net profit and ROE since year 2011.
· Dividend is decreasing since year 2012 but the DY is maintained above 3%.
· Here a latest news showing LBICAP going disposed 4 lands with RM 50 million, management going use this cash by:
i. RM 3.5 million clears bank borrowing.
ii. RM 25 million acquires other land.
iii. RM 18 million used on working capital.
iv. Amount left charged by RPGT and expenses.
· Director's active transaction on acquire LBICAP shares and warrant - http://www.klse.my/stock/insider/director/all/8494.jsp#stockDetailDiv
· LBICAP's active shares buy back activity in year 2015 - http://www.klse.my/stock/insider/company/shareBuyback/8494.jsp#stockDetailDiv
· LBICAP's last buy back share is year 2010, and next is year 2015, is it management think the current price of LBICAP is undervalued?