HLIND
Hong Leong Industries Berhad
Company Background
Special dividends can really boost a company's share price, especially for those with lots of cash and low CAPEX. Before the recent tax on dividends, $HLIND / 3301 (HONG LEONG INDUSTRIES BERHAD) paid out a special dividend, which helped its stock price soar. On the other hand, $KSL / 5038 (KSL HOLDINGS BERHAD), a company with a low P/E ratio of just 4.3, has seen its stock price stagnate because it hasn't paid any dividends, even though it is in the net cash position (But I didn't follow up its latest QR so I am not sure about its latest financial performance).
$HLIND / 3301 (HONG LEONG INDUSTRIES BERHAD)
Research by Kenanga
OUTPERFORM – TP RM13.50
"Motorbike Sales Zoom on New Models”
HLIND’s FY24 results beat our expectation. Its FY24 core net profit rose 18% YoY driven by credit easing by motorcycle financiers since 3QFY24, price hikes, and shift toward more premium products with strong margins. It introduced the all-new Yamaha PG-1 (priced from RM6,998) in August 2024 and looks to build a new Guocera tiles plant in 2026. We raise our FY25F net profit forecasts by 7%, lift our TP by 7% to RM13.50 (from RM12.60), and maintain our OUTPERFORM call.
Analyst:
Wan Mustaqim Bin Wan Ab Aziz
wanmustaqim@kenanga.com.my
Higher Sale of Motorcycles Boosts Hong Leong Industries' 4Q Earnings
Hong Leong Industries Bhd’s (HLI) (KL:HLIND) net profit for its fourth financial quarter ended June 30, 2024 (4QFY2024) rose 41.9% to RM98.33 million from RM69.29 million a year ago, thanks to higher sales of motorcycles and improved performance of its associated company.
Earnings per share increased to 31.24 sen from 22.02 sen, the group said in a bourse filing.
Revenue for the quarter inched up 1% to RM773.66 million from RM767 million in 4QFY2023, with the higher motorcycle sales offset by the absence of revenue from the fibre cement board business which the group disposed of in November 2023.
No dividend was declared for the quarter. Hong Leong Industries had declared total dividend payouts of RM1.07 per share in the previous three quarters of the financial year.
For the full year, the group said net profit rose 33.5% to RM387.89 million from RM290.61 million in FY2023, underpinned by favourable sales mix that led to better profit margin, a RM25 million insurance compensation related to flood damages in FY2022 as well as an RM18.7 million disposal gain in the fibre cement board business.
Full-year revenue fell 8.9% year-on-year to RM3.11 billion from RM3.42 billion, amid the slowdown in the motorcycle business in the first three quarters of the financial year.
On prospects, Hong Leong Industries said demand for motorcycles has shown signs of improvement which bodes well for FY2025.
The group added that it has committed to building a new plant for its tiles business, with production expected to begin in 2026.
Hong Leong Industries shares closed unchanged at RM11.24, giving the group a market value of RM3.69 billion. Year-to-date, the stock is up 32.2%. Stripping off special dividend, the stock has an indicative dividend yield of 5.1%.
$HLIND / 3301 (HONG LEONG INDUSTRIES BERHAD)
Source: https://cutt.ly/4emrKKHT
Change in Audit Committee - DATUK NOHARUDDIN BIN NORDIN @ HARUN
Change in Nomination Committee - MR PETER HO KOK WAI
Change in Nomination Committee - MISS QUEK SUE YIAN
Change in Audit Committee - MR PETER HO KOK WAI
Change in Audit Committee - MR EDWARD CHIN FOOK LING
Change in Boardroom - MR PETER HO KOK WAI
Changes in Director's Interest (Section 219 of CA 2016) - PROF DATO' DR JIM KHOR MUN WEI
DEALINGS IN LISTED SECURITIES (CHAPTER 14 OF LISTING REQUIREMENTS) : Dealings Outside Closed Period
$HLIND / 3301 (HONG LEONG INDUSTRIES BERHAD)
$HLIND / 3301 (HONG LEONG INDUSTRIES BERHAD)
Research by Kenanga
Outperform – TP RM12.60
“Motorbike Sales Zoom As Credit Eases"
HLIND’s 9MFY24 results beat our expectation. Its 9MFY24 core net profit rose 11% YoY driven by credit easing by motorcycle financiers from 3Q (Jan-Mar 2024), price hikes, and shift toward more premium products and strong margins from new models. We raise our FY24-25F net profit forecasts by 6% and 8%, respectively, lift our TP by 8% to RM12.60 (from RM11.70), and maintain our OUTPERFORM call.
Analyst:
Wan Mustaqim Bin Wan Ab Aziz
wanmustaqim@kenanga.com.my
HLIND - Notice of Book Closure
KUALA LUMPUR: Hong Leong Industries Bhd’s net profit surged 51 per cent year-on-year to RM99.43 million in the third quarter ended March 31, 2024, mainly due to a RM25 million insurance compensation received for the disruption caused by flood in the motorcycle business.
Quarterly rpt on consolidated results for the financial period ended 31/03/2024
Second Interim Dividend
OTHERSHong Leong Industries Berhad ("HLI" or the "Company") - Grant of Shares Pursuant to HLI's Executive Share Scheme 2021
AUTOMOTIVE
$MBMR / 5983 (MBM RESOURCES BHD) $BAUTO / 5248 (BERMAZ AUTO BERHAD) $DRBHCOM / 1619 (DRB-HICOM BERHAD) $HLIND / 3301 (HONG LEONG INDUSTRIES BERHAD) $HIL / 8443 (HIL INDUSTRIES BERHAD)
Research by Kenanga
Neutral
“Chinese New Year Lull in Feb 2024”
New vehicle sales in Malaysia, also known as total industry volume (TIV), came in at 62,833 units in Feb 2024 (-4% MoM, -1% YoY), easing MoM on a shorter working month due to the Chinese New Year break. With 2MCY24 TIV making up 18% of our full-year projection of 710k units (-11% YoY), we consider the number meeting our expectation. Our full-year projection is a tad lower than the 740k units projected by Malaysia Automotive Association (MAA). We hold the view that the impending fuel subsidy rationalisation will likely hurt demand for mid-market models, while remaining optimistic on the sales of affordable vehicles. The industry’s earnings visibility will be backed by a booking backlog of 200k units, unchanged compared to a month ago. Our sector top pick is MBMR (OP; TP: RM5.80), which focuses on the affordable segment. It also offers an attractive dividend yield of about 9%.
Analyst(s):
Wan Mustaqim Bin Wan Ab Aziz
wanmustaqim@kenanga.com.my
AUTOMOTIVE
$MBMR / 5983 (MBM RESOURCES BHD) $BAUTO / 5248 (BERMAZ AUTO BERHAD) $DRBHCOM / 1619 (DRB-HICOM BERHAD) $HIL / 8443 (HIL INDUSTRIES BERHAD) $HLIND / 3301 (HONG LEONG INDUSTRIES BERHAD)
Research by Kenanga
Neutral
“A Two-Speed Market”
We maintain NEUTRAL on the sector. We project industry-wide sales volume, also known as total industry volume (TIV), to contract by 11% to 710k units in CY24, which is a tad more conservative than 740k units projected by Malaysia Automotive Association (MAA). We believe while it will be business as usual for the affordable segment, fuel subsidy rationalisation will likely hurt the demand for mid-market models, giving rise to a two-speed automotive market locally in CY24. In general, the industry’s earnings visibility is still good, backed by a booking backlog of 200k units. Our sector top pick is MBMR (OP; TP: RM5.80), which is a good proxy to the affordable and fuel-efficient Perodua brand. It also offers an attractive dividend yield of about 9%.
Analyst(s):
Wan Mustaqim Bin Wan Ab Aziz
wanmustaqim@kenanga.com.my
AUTOMOTIVE
$MBMR / 5983 (MBM RESOURCES BHD) $HLIND / 3301 (HONG LEONG INDUSTRIES BERHAD) $HIL / 8443 (HIL INDUSTRIES BERHAD) $SIME / 4197 (SIME DARBY BERHAD) $BAUTO / 5248 (BERMAZ AUTO BERHAD)
Research by Kenanga
Neutral
“4QCY23 Report Card: Cruising Ahead”
The sector’s earnings delivery (against our expectations) was better sequentially as 3 out of 7 companies surpassed our expectations. Their CY23 earnings growth was mainly driven by the record automotive industry sales led by Perodua, as well as strong margins from new models. We maintain our CY24 forecast of new vehicle sales in Malaysia, also known as total industry volume (TIV), at 710k units which is a tad lower than the 740k units projected by Malaysia Automotive Association (MAA). We hold the view that the impending fuel subsidy rationalisation will likely hurt demand for mid-market models, while remaining optimistic on the sales of affordable vehicles. The industry’s earnings visibility will be backed by a booking backlog of 200k units. Our sector top pick is MBMR (OP; TP: RM5.80), which focuses on the affordable segment. It also offers an attractive dividend yield of about 9%.
Analyst(s):
Wan Mustaqim Bin Wan Ab Aziz
wanmustaqim@kenanga.com.my
Changes in Sub. S-hldr's Int (Section 138 of CA 2016) - KWEK HOLDINGS PTE LTD
Changes in Sub. S-hldr's Int (Section 138 of CA 2016) - MR KWEK LENG KEE
Changes in Sub. S-hldr's Int (Section 138 of CA 2016) - DAVOS INVESTMENT HOLDINGS PRIVATE LIMITED
Changes in Sub. S-hldr's Int (Section 138 of CA 2016) - HONG LEONG INVESTMENT HOLDINGS PTE. LTD.
Changes in Sub. S-hldr's Int (Section 138 of CA 2016) - HONG REALTY (PRIVATE) LIMITED
Changes in Sub. S-hldr's Int (Section 138 of CA 2016) - MR KWEK LENG BENG
$HLIND / 3301 (HONG LEONG INDUSTRIES BERHAD)
Research by Kenanga
Outperform – TP of RM11.70
“Partaking in RM40b Spare Parts Market”
HLIND is garnering a slice of action in the lucrative and sizeable spare parts market via its new automotive spare parts brand called Tekhne. HLIND will entirely outsource the manufacturing of Tekhne products, which focus on 2-wheelers to capitalise on the huge Yamaha motorcycle population in Malaysia. We maintain our forecasts, TP of RM11.70 and OUTPERFORM call.
Analyst(s):
Wan Mustaqim Bin Wan Ab Aziz
wanmustaqim@kenanga.com.my
Changes in Sub. S-hldr's Int (Section 138 of CA 2016) - TAN SRI QUEK LENG CHAN
Changes in Sub. S-hldr's Int (Section 138 of CA 2016) - HONG LEONG COMPANY (MALAYSIA) BERHAD