LHT Holdings

[mikh]

I believe the long term trend favours reusable pallets instead of wooden ones.

Aren't wooden pallets reusable?

From my experience, wooden pallets are easily damaged and may rot if exposed to rain for a long period of time. Plastic pallets are better but I guess far more expensive.

But perhaps LHT pallets are of better quality !

i can share that Australia requires wooden pallets to be sterilized, fumigated etc before being imported; so that's a negative for exports there

[Nick]

I believe the long term trend favours reusable pallets instead of wooden ones.

Aren't wooden pallets reusable?

From my experience, wooden pallets are easily damaged and may rot if exposed to rain for a long period of time. Plastic pallets are better but I guess far more expensive.

But perhaps LHT pallets are of better quality !

i can share that Australia requires wooden pallets to be sterilized, fumigated etc before being imported; so that's a negative for exports there

I was looking through LHT products and their wooden pallets looks to be of good quality. They also manufacture plastic pallets.

But with its spotty financial record over the past 5 years and seemingly lack of revenue growth and solid dividend payout, I wouldn't consider it as a yield or growth stock. But then again, I am not very good in analyzing micro-caps so my views may differ.

[Musicwhiz]

My take is to give it some time and observe the Company first. Put it on your "watch list" if you may call it that. No rush to purchase something if you are unsure about it.

[cif5000]

They also manufacture plastic pallets.

I thought they are merely a wholesaler.

[dydx]

I believe there is a typo error here. It simply doesn't make any sense to spend approx. $5.0m to build a dormitory for only the company's own foreign workers.

It's not a typo error.

Of the $5m, the bulk is used for "addition and alteration works to the existing factory building". Dormitory is for company's own foreign worker.

building a new workers’ dormitory which should bring in a new income stream from FY11 onwards.....

Therefore, I don't see it as a new income stream. A reduction in expense? - maybe.

Thanks for highlighting my errors. I have checked with my sources who informed me that LHT plans to add additional wood recycling (into wood chips) capacity plus a workers’ dormitory in the existing factory building at 44 Sungei Kadut Street 1. The planned capacity expansion is expected to come on-stream by 2012. Apparently, this project carries official blessing, including the possibility of having the existing JTC land lease extended.

So we can reasonably expect a revenue increase in the future.

[dydx]

FY10 (ended 31Dec10) result just out and makes interesting reading.....
http://info.sgx.com/webcoranncatth.nsf/V...2004983CE/$file/LHT-Holdings-Ltd-31Dec10-Full-Year-Results-FINAL.pdf?openelement [FY10 results announcement]

If we adjust the FY10 and FY09 profit figures for (1) the higher forex loss in FY10 ($412k, vs. $170k in FY09), and (2) the one-off $1502k gain from revaluation of investment property in FY09, we can actually see that underlying profits and FCF from LHT's core pallet manufacturing and distribution business have improved by quite a lot.

LHT has declared a higher $0.003/share (vs. $0.0025/share in FY09) Final dividend.

[dydx]

As Japan goes into rebuilding its devastated North-East coastal area in the next few years, would LHT's Technical Wood products.....
http://www.technicalwood.com.sg/index.html
enjoy a surge in demand and orders, and as a consequence also bring in a lot more profits?

Based on the latest FY10 results announcement, LHT recorded a total revenue of $2.38m and a total OP of $0.77m in FY10 from sales/exports of Tecchnical Wood products and Timber related products.

[dydx]

The just released FY10 (ended 31Dec10) AR makes interesting reading.....
http://info.sgx.com/listprosp.nsf/6c6be9...0000bcef3/$FILE/LHT%20AR2010_LOWRES_a1.pdf

FY10 revenue from the core (1) pallet/packaging products increased 71.6% yoy to a new record of $27.66m, and (2) pallet rental increased 20.7% yoy to $3.28m. And OP from these 2 core segments are up too. It appears LHT is gaining market share quite quickly. Just on this score alone, there is a good reason that Mr Market ought to look at re-rating this grossly under-priced counter.

I now look forward to the coming $0.003/share FY10 Final dividend (vs. $0.0025/share for FY09), which is payable on 25May11, with 'XD' date on 9May11.

[dydx]

LHT has just announced the plan/agreement to establish a wholly-owned Eco-Products plant in the Eco-Industrial Park in Tianjin to manufacture and assemble eco wood products, to support the Sino-Singapore Tianjin Eco-City development project and for exports.....
http://info.sgx.com/webcoranncatth.nsf/V...50031ABED/$file/LHT-Tianjin-Eco-Products-Plant-Establishment.pdf?openelement [Announcement]
http://info.sgx.com/webcoranncatth.nsf/V...50031ABED/$file/Press-Release-17-April-2011.pdf?openelement [Press Release]

The initial investment amount of $4m can be easily funded by LHT's existing cash reserve and recurrent operating FCF from its well-established Singapore operations. In a way, this new project is a confirmation that LHT's Technical Wood products and the related manufacturing technologies/expertise does carry quite a bit of "Eco" investment value.

Since Tianjin is near to Japan, and Japan will need to import a lot of materials (including wood) for the massive re-building after the recent earthquake and tsunami, the new project appears timely and may well become a mini bonanza for LHT.

[dydx]

As a surprise, today (16May11) Mr Market decided to turn bullish on LHT and cheered the share price all the way up to close at a recent historical high of $0.105. Total volume done at 955 lots is also a historical high since Jan10. The buyers were so enthusiastic that they cleared the little shares left on the 'sell' queue towards the market close. Is something positive imminent?

Based on LHT's 212.98m outstanding issued shares and the last done share price of $0.105, market cap. now stands at $22.36m, and this figure remains substantially lower than LHT's equity position of $31.628m as at 31Dec10. It looks like there is still more room for Mr market to do its work and trick!