Hong Leong Asia

[barista]

10% drop since 19th Jan....wonder what's going on.

[Thriftville]

Anyone interested in this company?

It's a good stock to buy during crisis, due to fall in demand for construction material. HL group also has good reputation in the business.

[guru]

I'm interested in this too. I think the share price is not reflecting the sum of its parts. That's why new CEO is undergoing strategic review on its BUs. There could be spin-offs. The current price could be taking into account the concern over China's prospects. But I think this is a good one to bet on for Asia's growth story beside the usual suspect.

Anyone have more thoughts to share?

[karlmarx]

HLA is probably trading at a slight discount (20%) to the mark-to-market valuation of its businesses. not all of its businesses are listed so we can't be more accurate on this. it will be good also if we have access to its separate balance sheets.

its most valuable and prospective businesses are probably yuchai, tasek, and its building materials unit.

it was noted that they intend to divest their packaging business and i think this is a good move. but any sale will not yield a significant amount of cash.

i have no idea on the P&L of xinfei but management does not seem too happy with its performance.

they hired a new ceo, but he is not much younger than the chairman. i worry if he can last more than 5 years.

taking into consideration of its high debt level, risk of hard landing in china, and everything else above, i see HLA as being fairly valued at the moment.

[Thriftville]

Thanks Karl for sharing the insights!

I have not been following HL Asia's news. Any idea how analyst managed to convince buyers that it's worth $5?
Was it due to China's policy to help the poor to get refrigerator?

[freedom]

Yuchai 3Q balance sheet showed that trade receivable jumped 100% with revenue around the same, not a good sign.

[SLC81]

Time to revisit HL Asia.
FY13 result has shown great improvement:

1) Yuchai engine division revenue & profit has improved by 22% (now trading at PE of 7x in NY Stock exchange)
2) Loss at Xinfei has reduced to $ 40 mils
3) Building material and packaging units business are doing fine
4) Newly acquired unit Airwell has good potential with raising revenue to to export to Europe

HL Asia is in Net cash position and the ongoing plan to dispose loss-making Xinfei if comes true will unlock great value for share holders.

In 2009, HL Asia was hiring bankers to sell Xinfei for $ 700 Mils (almost equal to curent HL Asia market cap). They won't be able to sell at that price this year. HL Asia has been raising non-stop for 2 months now so i think market is now hoping for something good

[CityFarmer]

I found that the name of the thread, wasn't consistent with the company listed name. So I changed the name from "HL Asia" to "Hong Leong Asia".

Please take note

Regards
Moderator

[SLC81]

Surprised o know that Yuchai diesel engine are not only popular in china (#1) but significant export to neighboring countries.

Even Kamaz, a russian truck manufacturer use Yuchai engines for their buses

http://www.abw.by/news/159722/

[propertyinvestor]

Im thinking its entirely possible for a takeover offer to be launched for HL asia. Sum of parts valuations at conservative estimate is around $2.50 / share