Lum Chang Holdings

[ahyu02]

I have some questions regarding Lum Chang FS.

In balance sheet, cash and cash equivalents at the end of FY is,
2012: 80516
2013: 63648

However, in cash flow statement, cash and cash equivalents at the end of FY is,
2012: 79683
2013: 63219

I think some other companies' FS also have this discrepancy. Why there is such discrepancy?

[CY09]

Hi, the discrepancy arises due to the cash and cash equivalents which has to be pledged (as collaterals).

See note1 of the cash flow statement and you will notice it

[yeokiwi]

Pg86 of AR12.

balance sheet = 80516
cash flow = 80516 - 10-823 = 79683

Included in cash and cash equivalents of the Group is an amount of approximately $4,480,000
(2011: $2,245,000) held under the Malaysia’s housing Developers (Control and Licensing) Act 1966,
withdrawals from which are restricted to payments for expenditure incurred on the project.
As at 30 June 2012, cash at bank of $10,000 (2011: $613,000) and short-term bank deposits of $823,000
(2011: $1,095,000) were pledged as security for bank facilities.
For the purposes of presenting the consolidated statement of cash flows, the consolidated cash and cash
equivalents comprise the following:

[smallcaps]

Wow, shareholder aware... like!

Lum Chang has paid a dividend of two cents per share for the last three financial years. “Our shareholders are usually the older generation who have been holding [our shares] for years and they want regular income,” Fong says. In fact, the dividend payout was raised from 1.5 cents per share to two cents in FY2010. “We felt our profits had stabilised and two cents is something which is quite achievable and sustainable over the medium term,” Fong says.

http://www.theedgesingapore.com/componen...nt&print=1

[TheMillennium]

I differ. I believe LC is just an ordinary construction/developer company which doesn't have an edge to provide a proper catalyst to revalue its stock.

Historical price has been trading sideways ever since the slight recovery from 2008 GFC.

Construction industry by itself is very price competitive. Contract bidding set a price ceiling on how much each project can be earn. Construction is also labour-intensive which means that in the past, foreign construction companies were able to compete with throat-cutting price bidding by suing its foreign workers "cheap labour" advantage. Of course, now that foreign worker levy increases, this will just provide a double whammy from both price & cost pressures.

Also, you have to look at the nature of the contract. Public construction contract, though huge in numbers provide very narrow margin, which means construction companies thread along a thin line of project execution. Any delay or miscalculation can result in a loss-making.

Such is also why construction companies slowly shift toward property developing. As for property prospect? It is no doubt the industry is on the down trend.

I was once vested in LC for a short period of time at 30c but realised my fundamental analysis for them is flawed.

*not vested*

Very accurate and true. Very stagnant. Low profit margins. Only upside is the 5+% yield. But there are much better companies out there with higher yields too.

Anyway, any updates on the lawsuit with Ryobi Kiso?

[mkmk]

Anyway, any updates on the lawsuit with Ryobi Kiso?

No updates from either parties since Aug 29.

[smallcaps]

Nucleos under construction:

[Image: y6udysem.jpg]

[dydx]

Lum Chang is constructing another nice building!

[gautam]

Lum Chang is constructing another nice building!

I agree.

lumchang has the reputation of building beautiful buildings and this is their economic moat.

but looking at their past record, if only they held on to their prime ppties at sweetenham and belmont, i think they would huat big big by now.

but then again, how many pple could have foreseen the great price in prime freehold land prices over the past 10years? normally it is "potong jalan" for construction companies.

the fact that they have bought the prime london ppty recently for recurring income suggests that the management realised the importance of having passives from holding ppties.

[junming82]

Lum Chang seems to be a good construction company stock to invest esp. for dividend income. They were profiled in the Edge magazine in April as a low key sector with a good dividend yield which serves as an alternative to investing in REITs.

Lum Chang - good stock with good dividend yield