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22-12-2010, 06:36 PM
I first noticed "LHT" on the many discarded wooden pallets lying around our industrial estates. I asked myself: If each wooden pallet costs a few dollars, and if most shippers or handlers would simply discard them after use, the big pallet suppliers should be enjoying a regular flow of a decent business.
Then I found LHT's website most informative.....
http://www.lht.com.sg/index.html
and the company's FY09 AR and H1 (ended 30Jun10)-FY10 results announcement most interesting.....
http://info.sgx.com/listprosp.nsf/07aed3...3002fccf9/$FILE/LHT_%20AR09_Lowres1.pdf [FY09 AR]
http://info.sgx.com/webcoranncatth.nsf/V...E003F09B7/$file/LHT-Holdings-Half-Yr-30Jun10Results.pdf?openelement [H1-FY10 results announcement]
In LTH, there is an established and profitable pallet supply and rental business - probably already the largest in Singapore. The company owns 2 large leasehold (JTC) factory premises in Sungei Kadut, from which it has its own warehousing/logistics operations, and a wood recycling plant producing a good amount of @Technical Wood mainly for exports; plus having extra space to rent out to 3rd-parties (earning a total rental & service income of approx. $1.72m in FY09) and building a new workers’ dormitory which should bring in a new income stream from FY11 onwards.....
http://info.sgx.com/webcoranncatth.nsf/V...D002788C8/$file/LHT-Holdings-44SgKadutSt1-A31Dec09.pdf?openelement
Based on the 212.98m outstanding issued shares, and today's closing share price of $0.085 (vs. NAV/share of $0.1419 as at 30Jun10), LHT now has a market cap. of only $18.1m. When compared against the present scale of the business operation, the decent and steady recurrent FCF generation and asset base (including a decent nett cash reserve), it is quite obvious that we have in LHT another gross under-pricing situation by Mr Market.
I suppose that's the main reason why some investors (not me!) were prepared to buy up this counter today - way ahead of the release of the coming FY10 full-year results only due in Feb11. I hope this will turn out to be another case of a value investor's wildest dream coming through early!
Then I found LHT's website most informative.....
http://www.lht.com.sg/index.html
and the company's FY09 AR and H1 (ended 30Jun10)-FY10 results announcement most interesting.....
http://info.sgx.com/listprosp.nsf/07aed3...3002fccf9/$FILE/LHT_%20AR09_Lowres1.pdf [FY09 AR]
http://info.sgx.com/webcoranncatth.nsf/V...E003F09B7/$file/LHT-Holdings-Half-Yr-30Jun10Results.pdf?openelement [H1-FY10 results announcement]
In LTH, there is an established and profitable pallet supply and rental business - probably already the largest in Singapore. The company owns 2 large leasehold (JTC) factory premises in Sungei Kadut, from which it has its own warehousing/logistics operations, and a wood recycling plant producing a good amount of @Technical Wood mainly for exports; plus having extra space to rent out to 3rd-parties (earning a total rental & service income of approx. $1.72m in FY09) and building a new workers’ dormitory which should bring in a new income stream from FY11 onwards.....
http://info.sgx.com/webcoranncatth.nsf/V...D002788C8/$file/LHT-Holdings-44SgKadutSt1-A31Dec09.pdf?openelement
Based on the 212.98m outstanding issued shares, and today's closing share price of $0.085 (vs. NAV/share of $0.1419 as at 30Jun10), LHT now has a market cap. of only $18.1m. When compared against the present scale of the business operation, the decent and steady recurrent FCF generation and asset base (including a decent nett cash reserve), it is quite obvious that we have in LHT another gross under-pricing situation by Mr Market.
I suppose that's the main reason why some investors (not me!) were prepared to buy up this counter today - way ahead of the release of the coming FY10 full-year results only due in Feb11. I hope this will turn out to be another case of a value investor's wildest dream coming through early!