Nam Lee Pressed Metal

1 December, 2015: Stocks with Momentum
http://sdb.theedgemarkets.com/2015/SMR/S...maxmgh.pdf

Nam Lee reported annual profits of $12.9 million for FY2015 ended September, an 80% increase over its $7.15 million earnings in FY2014. Earnings in its seasonally weak 4QFY2015 rose sixfold to about $900,000 from $150,000 over the same quarter of last year.

The improved earnings came on the back of a 16% rise in turnover to $164 million from $141.5 million in FY2014. The company reported that increased revenue from its aluminium segment was the primary driver of higher sales in FY2014. Its gross profit margin also improved significantly to 22.7% in FY2015, from 16% previously..........................................................

The annual numbers look ok but the quarterly numbers from the Edge are non-sensical. Nam Lee only provides year to date numbers but if you subtract the 9 months numbers from the full year numbers, Q4 net income was $6,045 versus $3,349 in Q4 2014. The comment about the 4th quarter being seasonally weak also does not bear scrutiny if you look at the historical numbers. The Edge must be mixing up different company financials......

(02-12-2015, 04:53 PM)GreedandFear Wrote: The annual numbers look ok but the quarterly numbers from the Edge are non-sensical. Nam Lee only provides year to date numbers but if you subtract the 9 months numbers from the full year numbers, Q4 net income was $6,045 versus $3,349 in Q4 2014. The comment about the 4th quarter being seasonally weak also does not bear scrutiny if you look at the historical numbers. The Edge must be mixing up different company financials......

Haha those analyst dunno how to calculate properly lah but lucky for us they seem to be wanting to push namlee price up.

Anyone attended agm ?

(29-01-2016, 05:31 PM)ZZF Wrote: Anyone attended agm ?

be patient someone will post about the AGM on their blog or article will appear on some website soon...

Nam Lee continues to deliver strong profits in spite of the poor local construction sector market. This would seem to point at increased contribution from the refrigerated container business with Carrier (ie revenues are down but margins are up, suggesting less revenue from the super competitive construction sector and more from the Carrier business). I was unable to attend this year's AGM, so am unclear as to whether they have received bigger orders from Carrier (which was hinted at during the previous AGM) but certainly the increase in profits over the last year is unlikely to have come from the metal frame business with HDB.

                             Q2 2015/16            Q1 2015/16            Q4 2014/15          Q3 2014/15         Q2 2014/15           Q1 2014/15        
Revenues               $32,132                  $39,088                 $49,657               $43,205               $40,246                $30,934 
Gross Profit            $  8,485                  $  8,962                 $13,073               $10,448               $ 7,307                 $ 6,547
%                             26.4%                    22.9%                   26.3%                24.2%                  18.2%                 20.9%     
PBT                       $  4,048                  $   3,972                 $  5,302              $ 4,043                $ 3,642                 $ 2,996
%                             12.6%                     10.2%                   10.7%                  9.4%                  9.0%                     9.7%
Net Profit               $  2,719                  $   3,377                 $  6,045               $1,763                $ 2,594                  $ 2,538
%                                8.5%                      8.6%                   12.2%                  4.1%                  6.4%                     8.2%
EPS                           1.127c                     1.414c                    2.48c                  0.76c               1.094c                   1.027c

Looks like 5 cents of EPS is achievable and given historical pay-out ratio of 40-50%, another 2.25 - 2.5 cents dividend should be possible given an attractive dividend yield of 7.5 - 8.3% at the current stock price of 30 cents. NAV is at 52 cents, so we are still at a hefty discount to NAV and, if the company earns 5 cents, PE is a modest 6x. All in all, a good performance in a poor market. The Carrier contract got renewed last year, so we should have 4 more years without uncertainty. Hopefully that will carry them well through the current Singapore construction downturn. 

Vested

hmm seems like no one from VB attended AGM or bothered to post. However this is what i read from carrier website recently.

After the 12,900 new primline unit order from maersk last october 2015, this 3,000 unit order may not look as impressive. 
https://www.carrier.com/container-refrig...stems.aspx

But nevertheless, it should trickle down nicely into Namlee's order book and keep their new msia factory humming along just fine.

In this pretty bad shipping and global economy, countries still need to export and import food, people still need to eat, which means shipping companies will still need to spend money on improving and maintaining their refridgeration systems.

Construction/property sector will take a hit this year. But if government do more HDB works and other projects, the hit to Namlee construction division may hopefully be cushioned.

-v- "The carrier man can...."

Just had a close look into the 2Q/1H (ended 31Mar16) FY16 result.....
http://infopub.sgx.com/FileOpen/Nam%20Le...eID=404776

The much improved margins in 1H - against a flat Revenue, GP +27.4% YoY to $17.4m, and GPM improved to 24.5% (from 19.2% in 1H-FY15) - is encouraging, as Nam Lee is benefitting from a change in product mix (likely related to the long-standing Carrier Transicold business), and likely also from the prevailing lower aluminium and steel market prices.

With only measured new capex, Nam Lee's net cash reserve - hitting $40.5m as at 31Mar16 - continues to rise, and it is reasonable to expect this trend to continue, pointing towards a high possibility of even bigger dividends payout (last FY15: a total $0.025/share) to come.

(15-05-2016, 06:40 PM)dydx Wrote: Just had a close look into the 2Q/1H (ended 31Mar16) FY16 result.....
http://infopub.sgx.com/FileOpen/Nam%20Le...eID=404776

The much improved margins in 1H - against a flat Revenue, GP +27.4% YoY to $17.4m, and GPM improved to 24.5% (from 19.2% in 1H-FY15) - is encouraging, as Nam Lee is benefitting from a change in product mix (likely related to the long-standing Carrier Transicold business), and likely also from the prevailing lower aluminium and steel market prices.

With only measured new capex, Nam Lee's net cash reserve - hitting $40.5m as at 31Mar16 - continues to rise, and it is reasonable to expect this trend to continue, pointing towards a high possibility of even bigger dividends payout (last FY15: a total $0.025/share) to come.

The cash balance moves around a lot. The pattern at Nam Lee is that their cash balance drops as they win new contracts and increases as contracts are finished (simple working capital). Typically, when revenues drop (as in Q2), the cash balance balloons but then reverses as they work on new orders (and this can be lumpy). I think it is better to look at EPS (using a 40 - 45% pay-out ratio) as a proxy for dividends. Also, historically, the company has maintained a significant cash balance. Pay-out ratios were :

2015 : 47%
2014 : 51%
2013 : 41%
2012 : 34%
2011 : 33%
2010 : 34%
2009 : 50%

(15-05-2016, 08:16 PM)GreedandFear Wrote: I think it is better to look at EPS (using a 40 - 45% pay-out ratio) as a proxy for dividends. Also, historically, the company has maintained a significant cash balance. 

Well, there are people who like to attach additional value to a company's large distributable cash reserve, and such a way to look at valuation is actually quite rational. 

Based on its $40.5m net cash reserve - equivalent to $0.168/share (based on the latest outstanding 241.294m issued shares) as at 31Mar16 - conceivably Nam Lee can just pay out a special dividend of up to $0.10/share without having any negative impact at all to its on-going business operation and the working capital required to support it. What would Mr Market's reaction be when this happens?

Let's also look at Nam Lee from another perspective : Does it make sense for the share price to stay at the $0.30 level - supported by a already high dividend yield expectation of 8.3%pa (based on a $0.025/share yearly payout) - for the long term, when its NAV/share (31Mar16 : $0.515) and per share net cash reserve continue to increase with time?