Thursday 23 November 2017

Lysaght - Too Good to be True? More so Now!

Wrote about Lysaght - Almost too good to be true? about 4.5 months ago.

Surge in top line and bottom line
Lysaght released stunning 3Q17 results, whether you compared in YoY or QoQ

Revenue growth (%)
Net profit growth (%)
3Q YoY
9M YoY

9M17 sales tonnage increased by 27%, revenue jumped 51.7%, gross profit improved, 46.4% net profit surged 46.4%. It enjoyed higher average selling price. Margin was relatively stable.

PE 7.2x
Its current market cap stands at RM145.53m. If we annualise the 9M17 net profit, the stock is trading at an undemanding PE of merely 7.2x.

Net cash per share RM1.67
Its net cash per share improved to RM1.67/share, from RM1.42/share a quarter ago. 
Its cash makes up 47.4% of its market cap.
It has zero borrowing
Ex-cash, the stock is trading at a PE of  3.8x! (based on annualised 9M17 earnings), for a stock that enjoy 39.3% gross margin and 22.1% net margin!

Commenting on the prospects on the company, the group expects to maintain its profitability.

Growth prospects?
The company announced in early October 2017 that it is acquiring 2 acres of land adjacent to its existing galvanizing plant in Tasek, Ipoh, to enhance production flow and to facilitate future expansion plan of the company (source).

Judging all the above, is it not a steal at current share price?

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