How To Spot A Good Trade Part 2

There is earnings recovery, and then there is distinctive earnings recovery. There are still a number of issues which troubles the stock but overall its a concerted recovery over the past 18 months. Time for a major rerating. Its not a business I particularly like or fancy, just a trade in rerating.

A good indication of firmer footing, the company also declare a 2 sen dividend after paying nothing for sometime.

I only manage to get a report by RHB Research. This was dated February 2010, and their estimates have been surpassed, plus they had a target price of RM1.80. I am sure they would be revising that a bit higher now.

RHB Research:
Outlook. We remain positive on LFIB’s earnings outlook and on the back of:
1. The change in the National Automotive Policy in end-Oct that introduced incentives for local autoparts manufacturers, which is positive for SCB’s motorcycle parts and accessories business; and
2. Our projected total industry vehicle (TIV) sales volume growth of 8.5% in 2010, which will boost sales volumes at LFIB’s tyre manufacturing division;
and
3. The implementation of the two stimulus packages that will boost demand for building materials.

Earnings forecasts. We are raising our FY06/10-12 net profit forecasts by 43.4-51.5% to RM56.3m, RM62.0m and RM65.3m respectively, to reflect higher sales volume at the tyre manufacturing division.

♦ Investment case. Following the upward revision in our net profit forecasts, indicative fair value is raised by 43.9% to RM1.80 based on 7x revised CY2010 core EPS of 25.7 sen. Upgraded from underperform to Outperform as valuation has become attractive.


8486 LIONFIB, LION FOREST INDUSTRIES BHD

Quarterly rpt on consolidated results for the financial period ended 30/6/2010
23 Aug 2010, 18:33
Report Status UnAudited
Quarter 4th Quarter
For Financial Year End 30/06/2010


Individual Period Cumulative Period


Current Year Quarter Precending Year Corresponding Quarter Current Year to Date Precending Year Corresponding Period

30/06/2010 30/06/2009 30/06/2010 30/06/2009

RM'000 RM'000 RM'000 RM'000
Revenue 241,648 190,782 873,619 598,037
Profit/(Loss) before Tax 56,145 17,574 183,667 170,351
Profit/(Loss) after Tax and Minority Interest 46,318 12,435 150,817 167,495
Net Profit/(Loss) for the Period 47,976 13,087 163,745 160,885
Basic Earnings/(Loss) per Shares(sen) 20.03 5.40 65.38 75.38
Dividend per Share(sen) 2.00 0.00 2.00 0.00



As At the End of Current Quarter As At the Preceding Financial Year End
NTA per Share(RM)

4.6800 4.0900




NOTE: The above opinion is not an invitation to buy or sell. It serves as a blogging activity of my investing thoughts and ideas, this does not represent an investment advisory service as I charge no subscription or management fees (donations are welcomed though). The content on this site is provided as general information only and should not be taken as investment advice. All site content, shall not be construed as a recommendation to buy or sell any security or financial instrument. The ideas expressed are solely the opinions of the author. Any action that you take as a result of information, analysis, or commentary on this site is ultimately your responsibility. Consult your investment adviser before making any investment decisions.

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