ValueBuddies.com : Value Investing Forum - Singapore, Hong Kong, U.S.

(12-05-2014, 05:30 PM)opmi Wrote: [ -> ]Maybe they need the money..

Perhaps.
Or perhaps they are finally listening to SH and increasing the dividends. Maybe they got tired of getting bombarded every AGM about this issue.

I did some face research on LTC and noted the followings:

- the core business yield about 10%, outlook in steel demand remain uncertainty due to general slowdown in private construction sector
- significant amount of profits from investment properties are unrealised as the LTC adopted a less-prudent approach in valuing the investment properties (fair value approach)
- property development contributed significant portion of profits for FY2012 and FY2013, but the future profitability remain uncertainty, a question mark as to whether necessary to provide impairment on the bungalows

Overall it is true that LTC is undervalued in some ways, but apparently it will not be easy for them to unlock the true value especially on general correction trend in property market.

On the plus side, I think LTC has been actively paying down the borrowings and I expect it will be debt-free in the coming quarter, so increased dividends.

[ not vested ]

(15-05-2014, 02:51 PM)valuebuddies Wrote: [ -> ]I did some face research on LTC and noted the followings:

- the core business yield about 10%, outlook in steel demand remain uncertainty due to general slowdown in private construction sector
- significant amount of profits from investment properties are unrealised as the LTC adopted a less-prudent approach in valuing the investment properties (fair value approach)
- property development contributed significant portion of profits for FY2012 and FY2013, but the future profitability remain uncertainty, a question mark as to whether necessary to provide impairment on the bungalows

Overall it is true that LTC is undervalued in some ways, but apparently it will not be easy for them to unlock the true value especially on general correction trend in property market.

On the plus side, I think LTC has been actively paying down the borrowings and I expect it will be debt-free in the coming quarter, so increased dividends.

[ not vested ]

In the last results released, management has indicated that the steel segment is still restively stable. There isn't any slowdown in construction. There's a general downtrend in prop prices and transactions but if u look at the private residential market alone, there will be twice the number of units launched in 2015 than in 2014, and 4 times in 2016 (24,000+ units) according to URA
How is this a slowdown?
I do expect profitability to reduce because steel prices are softening though

As for valuing the properties, nowadays the FRS rules requires mostly mark to market or fair value accounting for recording properties so I wouldn't say it's not prudent

In fact there are still companies who values its investment properties using the cost-less-depreciation method, eg. Hupsteel, Lee Metal.

(16-05-2014, 09:47 AM)valuebuddies Wrote: [ -> ]In fact there are still companies who values its investment properties using the cost-less-depreciation method, eg. Hupsteel, Lee Metal.

From Lion Teck Chiang AR2013 PAGE 39:
"Investment properties are measured initially at cost, including transaction costs. The carrying amount includes the cost
of replacing part of an investment property at the time that cost is incurred if the recognition criteria are met.
Subsequent to initial recognition, investment properties are measured at fair value which refl ects market conditions
at the end of the reporting period. Gains or losses arising from changes in the fair value of investment properties are
included in profi t or loss in the year in which they arise."

From HupSteel AR2013 PAGE 44:
"Investment properties are initially recognised at cost and subsequently carried at cost less accumulated depreciation and
accumulated impairment losses. Freehold land on which the freehold industrial building and warehouses are sitting on is
not depreciated. Depreciation on other items of investment properties is calculated using a straight-line method to allocate
the depreciable amounts over the estimated useful lives of up to 50 years. The residual value, useful lives and depreciation
method of investment properties are reviewed, and adjusted as appropriate, at each balance sheet date. The effects of any
revision are included in profit or loss when the changes arise."

New accounting rules (FRS) generally encourages mark to market.

I think you mixed up the "investment properties" with "Property,plant and equipment"
From Hupsteel AR2013 PAGE 43:
"Property, plant and equipment
Property, plant and equipment are initially recognised at cost and subsequently carried at cost less accumulated
depreciation and accumulated impairment losses."

From Lion Teck Chiang AR2013 PAGE 39:
"Property, plant and equipment
All items of property, plant and equipment are initially recorded at cost. Subsequent to recognition, plant and
equipment and furniture and fi xtures are measured at cost less accumulated depreciation and accumulated impairment
losses."

PPE will be recorded as initial cost less depreciation blah blah blah
Investment properties are pretty much mark to market.

Just been through FY14Q4 results.
Hard to find many positives.

Basically LTC steel division is hit by oversupply, keen competition, and a worldwide compression in steel trading margins.
Profit dropped significantly due to all 4 divisions suffering a drop in profitability.
Property development both locally and in Malaysia is not doing well, resulting in a net loss of 3million for the division.

Only positive thus far is the still positive free cashflow.
Working capital has also jumped up from70-80mil in 2012 and 2013, to over 110 mil in 2014, indicating that going forward, they will need to commit more cash to fund operations.

The one thing that may be a red flag is the lack of dividends this quarter. Why is there a dividend declared in Q3 (suddenly) and none for Q4? I am worried that this is to allow Tan Sri William Jem to collect some dividends before he disposes a larger percentage of his stake.
If so, this is a big red flag.

FY15-Q3 (ended 31Mar15) result just out.....
http://infopub.sgx.com/FileOpen/LTC_Thir...eID=348747
Another overall steady quarter sustained mainly by higher sales and profits from industrial park development sales in Malaysia.

Another surprise interim dividend of $0.01/share - just like last FY14 - which will be payable on 12Jun15.

Latest FY15 FY results are pretty encouraging.

EPS improved from FY14, even after you consider that the extraordinary gains recorded (due to revaluation of their FH industrial properties) is much lower in FY15 than FY14

Net margins and ROEs are all still very low, similar to FY14

But FCF has been +ve for several years, and if LTC can maintain +ve FCF in this current very difficult environment for steel, it's a good sign that when things recover, they will be able to capitalise on it.

Cheng family corp gov not very good leh. See parkson IPT.

http://www.theedgemarkets.com/my/article...nit-rm641m

(30-08-2015, 08:04 PM)opmi Wrote: [ -> ]Cheng family corp gov not very good leh. See parkson IPT.

http://www.theedgemarkets.com/my/article...nit-rm641m

Is this parkson deal related to the LTC acquisition?
I know they are all part of a restructuring in the Lion group, but how else is it related?

LTC acquisition is regarding departmental stores (SOGO) in Malaysia