12 September 2014

HLIB: LBS Bina on solid footing

  12 September 2014

HONG Leong Investment Bank (HLIB) Research sees LBS Bina Group Bhd on a solid footing domestically as the property developer sits on an undeveloped landbank of some 728.4ha that could yield RM18.2 billion in future gross domestic value.

The research firm said LBS Bina is likely to monetise its Chinese assets worth RM970 million at the market value to acquire more land in Malaysia. The company wants to beef up its landbank reserves that are currently sufficient to last another 10 years.

“After many years of delay, LBS Bina successfully struck a deal to monetise its 60 per cent stake in two plots of land in Zhuhai, China. This is a landmark moment in the group’s history as it allowed LBS Bina to finally monetise its valuable landbank in China, which we expect to fund its footprint in Malaysia,” HLIB Research said in a report yesterday.

The two plots of land in Zhuhai include the 79.7ha of development land and the 136.7ha of Lakewood Golf Club. The lands are worth HK$1.65 billion (RM681.81 million).

LBS Bina is committed to share the proceeds of the Zhuhai land sale with a series of special dividends spread across five years.

The company, founded by Datuk Seri Lim Bock Seng in 1960s, had declared the first eight sen special dividend on August 20 last year and is scheduled to cumulatively pay out another 24 sen of special dividends over the next four years, which translates to a cumulative 14 per cent yield.

The company also has a regular dividend payout of 30 per cent.

“We estimate the combined regular and special dividends to translate into an overall dividend yield of 5.9 per cent and 7.6 per cent, respectively, which is an attractive proposition for investors,” HLIB Research said.

The research firm has a “neutral” call on LBS Bina stock with a target price of RM2.41.



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