Friday, February 13, 2015

About LTKM

It has one of the strongest balance sheets amongst poultry related companies in Malaysia. Net cash stood at rm8.3 million or rm0.192 per share at end Sept 2014, in an industry where most players are highly geared.

The company has since expanded into a 400 acre highly automated bio secure farm in Malacca and is the single largest layer farm in Malaysia. LKTM remains tightly held by its founders (61% stake).

Current capacity totals 1.4 million eggs per day, including its famous Omega 3 eggs marketed under LTK Omega Plus brand. Over 40% of eggs produced are exported to Singapore and HK with the balance sold to local wholesalers.

It is trading at a trailing 12 month PER of 6.8 times and price to book of 1.25 times.

It has been able to maintain relatively consistent dividends even when earnings dipped sharply in FY March 2012.

Earnings can be volatile due to the volatility of major raw materials, corn and soybean. For 1HFY2015 sales increased 8.4% year on year to rm93.4 million while pre tax profit rose 38.7% to rm21.0 million.

The outsized increases in profit and margin were due to higher selling prices for eggs and lower raw materials costs. The weak ringgit may raise costs in the near to medium term.

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Please note that all data given are merely blogger's opinion. It is strongly recommended that you do your own analysis and research before investing.