Nam Lee Pressed Metal

[dydx]

Based on the latest (30Sep14) B/S, Nam Lee is sitting on a huge net cash balance of $41.2m - approx. $0.17/share - and the Group's B/S and assets remained substantially funded by its own equity. If we include the large $33.2m trade debtors balance as near-cash, the adjusted net cash balance (including near-cash) will balloon to $74.4m, or approx. $0.308/share.

Despite the weaker NP for FY14 (ended 30Sep14) at $7.05m (-20.8% YoY), Nam Lee continued to generate good FCF (pretax, and before changes in working capital items) which amounted to $12.2m (-4.8% YoY) - approx. $0.0505/share.

If we apply a multiple of just 5.0x on the FCF of $0.0505/share, Nam Lee's well-estabished business is worth at least $0.2525/share. Adding the adjusted net cash of $0.308/share will give a fair value of each Nam Lee share at $0.5605/share, which is a 13% premium over its latest (as at 30Sep14) NAV/share at $0.496.

It is quite clear that based on the last done share price of $0.285, Nam Lee remains grossly under-priced. I suppose the easiest way for Nam Lee's management and BOD to unlock the value of Nam Lee shares is to declare a 'jumbo' special dividend from the group's net cash reserve.

[davidoh]

In 2007 NL gave out a large super special dividend

[BlueKelah]

Hopefully with lower oil prices, global trade will get a boost and the shipping and container industry will start recovering resulting in more orders for Namlee's products.

Namlee is still profitable in these uncertain times and unfavourable industry conditions due to experienced Mg.

For a special div, business will have to pick up quite a bit and earnings start flowing in before Mg will be happy to do a large payout, they are a pretty prudent bunch when they need to be and generous when they are able to be.

London ME Aluminium

Aluminium price action indexmundi.

Looks like aluminium is up from march lows of USD1700/ton to ~2000/ton this month. Hopefully maintains around this range which should benefit Namlee in terms of raw materials cost and result in better margins.

- accumulating -

[davidoh]

is this company worth keeping for long term to earn dividend

thank you

[FatBoi]

is this company worth keeping for long term to earn dividend

thank you

Hi davidoh, how long is long term for you? 10 years? If you trust historicals to be a good proxy for future, then I can tell you that Nam Lee's dividend history goes back more than 10 years ago. I happened to blog about that recently.

But many buddies will tell you that a lot will depend on the sustainability of their business model, can they continue to generate sufficient free cash flows to support the dividends? There has to be consideration if they can maintain their relationship with Transicold Carrier for aluminium-related products. But to me, this is not easy for an outsider like us to answer. Maybe even management cannot answer these questions well.

If you let historical numbers guide you, then the stars are pointing to that Nam Lee looks like an interesting candidate to keep fueling that dividend you are looking for. But again, at what price and for what yield? More things for you to mull over.

Afterall, Nam Lee is only one out of 160 odd SGX-listed stocks that have paid out dividends for at least past 10 consecutive years.

[BlueKelah]

is this company worth keeping for long term to earn dividend

thank you

Yes. [emoji3] so long as management does not change and keep doing what they have been doing for past few decades... you are welcome.

-- via Xperia Z1 with tapatalk

[kikababoo]

is this company worth keeping for long term to earn dividend

thank you

Yes. [emoji3] so long as management does not change and keep doing what they have been doing for past few decades... you are welcome.

-- via Xperia Z1 with tapatalk

i dont like the idea of mgmt investing 6 mil SGD (IRRC) in bonds to earn the meagre amt of interest. and that's prob a sign of relative lack of financial savviness from mgmt. (it's their family money to them so they prob don't care, invest in bonds under coy name or distribute as dividends to indiv shareholders for them to invest themselves prob don't make a diff to them, zzz).

(barely vested).

[Jack EL]

Heard some rumours about the young generation joining the company and it is quite messy now. Don't know how this will affect the company's future direction and management. But I believe a company's future depends largely on the direction of the management. If the company is messy, I think it is a big negative for the long term.

[brattzz]

young gen join family biz is expected and should be carried out asap, for the old gen can coach and train them well!
Initially, all will be messy, that is where old gen can teach and experience exchange!
young gen also can share new ideas and thoughts!

[dydx]

Heard some rumours about the young generation joining the company and it is quite messy now. Don't know how this will affect the company's future direction and management. But I believe a company's future depends largely on the direction of the management. If the company is messy, I think it is a big negative for the long term.

It is dangerous to spread and rely on rumours!

Based on Nam Lee's long track record, we know the 3 senior Yong brothers (also the founders) as EDs are united and have worked well all these years growing the business, which is also managed by non-family related professional managers, including the trusted and proven Lim Hock Leong as Group General Manager. There is every reason to believe the 3 senior Yong brothers and the same IDs would continue to supervise and guide the younger managers including any from the 2nd-generation Yong's.

While labour costs in Singapore have gone up further, Nam Lee has since many years ago re-positioned its main manufacturing operation into Southern Malaysia, and the prevailing weakened (by some 3.2% since 30Sep14) MYR vs. SGD exchange parity is expected to have a certain positive impact on Nam Lee's operating profit margin at least in the 1H of this FY15.

We must also not forget Nam Lee is holding a huge cash reserve in excess of SGD40.0m (equivalent to over $0.17/share), and its latest (30Sep14) NAV/share at $0.496 continues to provide an unusually high asset coverage and Margin of Safety to the last done share price of $0.28.

I look forward to the coming $0.015/share Final dividend for FY14