A home grown Malaysian company, London Biscuits Berhad Group’s main business philosophy hinges on manufacturing and marketing cakes and snack food which score high in terms of product safety and quality. The company strongly believes that this is the only way to ensure the customer satisfaction and loyalty to the product and the brand it embodies.
London Biscuits’ individually packed and ready to eat products can be divided into 2 main categories namely:
Corn based snacks
Cake products such as Swiss Rolls, Pie Cakes and Layer Cakes
Corn based snacks
Cake products such as Swiss Rolls, Pie Cakes and Layer Cakes
In addition, London Biscuits also manufactures range assorted chocolate confectionery including chocolate-coated peanuts and biscuits, pancake cookies, jelly and puddings, wafer sticks, cup sticks and snack noodles.
As a pioneer in the cake products segment locally, London Biscuits has fine-tuned the process of making cakes with long shelf life, of 8-12 months, without refrigeration.London Biscuits products can be found in Malaysia and 65 other markets, worldwide. Its main overseas markets are China, Hong Kong, Macau, Indonesia, Singapore, Taiwan, Thailand, Vietnam and the Middle East.
Financial Performance
TURNOVER('000)
10--152,144 (Q3)
09--184,302
08--138,163
07--117,171
06--107,740
05--81,958
10--152,144 (Q3)
09--184,302
08--138,163
07--117,171
06--107,740
05--81,958
PROFIT/LOSS BEFORE TAX
13,904 (Q3)
17,612
9,257
14,604
18,644
14,539
13,904 (Q3)
17,612
9,257
14,604
18,644
14,539
NET PROFIT/LOSS TO SHAREHOLDERS
11,650 (Q3)
16,027
10,504
11,852
14,201
11,503
11,650 (Q3)
16,027
10,504
11,852
14,201
11,503
GROSS EPS (SEN)
13.79 (Q3)
20.54
13.49
16.48
20.39
16.86
13.79 (Q3)
20.54
13.49
16.48
20.39
16.86
GROSS DIVIDEND (RM)
0.04 (Forecast)
0.04 (Forecast)
0.04
0
0.05
0.07
0.15
0
0.05
0.07
0.15
Forecast EPS 2010 = 0.18(with Q4=0.04)
Industry PE = 10
Real Price = 0.18*10 = 1.8
Current Price = 1.25
Current Price = 1.25
(31% upside potential !!)
NTA = 2.16 (42% discount from NTA)
Interest in Associated companies
Lay Hong Berhad 24.59 % @ price 1.15 = worth 0.136 per share
Khee San Berhad 32.87% @2008 0.56 =worth 0.115 per share
TPC Plus Berhad 48% @ 2010 0.255 =worth 0.102 per share
Total = 0.35 per share + cash pers share 0.1585
= 0.5 per share
Reason to Buy:
1)With the company business model is consumer product which is a defensive sector that recorded a steadily growth rate in the business. Diversified client in almost 65 country.
2)Hari Raya is Coming, the profit will be boost up in the coming quarter which maybe exceed forecasted earning.
3)Strong financial record and growth rate.
4) Strong confident from the management on the coming year,
DATO’ SRI LIEW KUEK HIN, SSAP, DIMP, PJK, JP Chairman of the Board, in his statement in the latest annual report: Outlook and Prospects The smile is slowing returning to the face of many Malaysians Manufacturers and Exporters, which were directly or indirectly affected by the global economic crisis, which led several countries to a worst recession that they had experienced thus far. Fortunately, many feel the worst should be over and recovery is in sight. The Board, is once again optimistic and confident that LONDON would be in a good position to end the financial year 2010 with a “bang”.
Recommendation: Strong Buy (target price 1.8)
