- Warehousing : Rental of warehouse, handling and providing logistic solution services
- Freight Forwarding : Sea and air freight forwarding and shipping agent
- Transportation and Distribution : Trucking and container haulage
2 years ago, ILB had underwent a restructuring exercise which had saw the disposal of warehouses in Shenzhen and Henan during 2013. The disposal had resulted in ILB's sharp declining revenue for the year 2014. Along with several provision in their other investment, namely HengYang Petrochemical Logistic Ltd, ILB had been seen performing below par for the year 2014, sipping into the red zone.
However, with the disposal of the warehouse in 2013, and after rewarding shareholder with treasury shares and good dividend in 2014, what is lying ahead for ILB in 2015 and beyond?
ILB had been trading in a low volume nature for the past 8 months since October 2014. However, the company had saw numerous share buy back especially from the director during the season, which had saw both executive director, Mr Tee Tuan Sem and Makoto Takahashi, each totaling more than 11% of shares directly.
ILB consolidation had finally came to a halt when the company had approved a 10% share buy back, which had saw the company whipped up shares from the open market, starting from a lowly 70 cents region. The company had recently put in huge share buy back at the range of RM 0.80.
A quick outlook would see the share being supported well at the range of RM 0.80, and the continuous buy back will be looking to see ILB trading in the region of RM 0.80 to RM 0.90 in no time.
ILB - Still Banging on China
2 years ago when ILB had decided to sell off their warehouse in ShenZhen and Henan, there had been rife speculation that ILB could be exiting the China market, cashing out and look for new opportunity at the other region. However, with the massive economy development in China, it could be unwise for not tapping with the growth of the great nation. The sale of the warehouses is a restructuring exercise in ILB to focus on the higher demand area in China, which means area with higher utilization rate.
According to sources, ILB operation in Wujiang, China, had been running at 100% utilization rate for all its 6 warehouses. The company had previously invested another RM 56million to build 3 more warehouses in that area, in which the 3 warehouses will be ready for operation now. Sources had informed that the 3 new warehouse will probably hit up 100% within 2015.
WuJiang, situated in the southern of Suzhou, and eastern side of Shanghai, is a strategic place for warehousing with it's close proximity from the port and main city.
The 3 new warehouse that will be ready and operational in 2015 will see a great contribution towards the bottom line of ILB FYE 2015.
Riding on the completed airport from UAE
Despite the challenging year in 2014, ILB 50:50 joint venture, INL, had achieve a occupancy rate of 52%. However, in line with the fully operational Al Maktoum International Airport, INL is believed to be able to see more occupancy rate for it's close proximity towards the airport. INL facilities including high quality warehouse and cold room facilities, which will be suitable for diaries and food products that is imported to UAE.
Although the company had saw sharp slide in global oil prices which affected major world economies, the group is still positive on the future occupancy rate for INL, which will be mainly bolstered by the fully operational Al Maktoum International Airport.
Solid Fundamental with Possible Corporate Exercise
As of the latest financial take out, ILB is on a net cash position of approx 70 cents. Currently, ILB is sitting on cash and cash equivalent worth RM 152,698,000. At the current price of RM 0.82, buying the current share will be liken to pay 12 cents for an international logistic company, and on top of that, enjoy the potential growth of the company in China and Dubai. The current price is also reflecting less than 50% of the current NTA of RM 1.71 as well, of which a significant portion is dominated by cash.
ILB had saw massive share buy back from the company as of lately. The recent approved 10% share buy back from the company will allow ILB to buy back a total of 17.8 million shares, with an allocation of fund no more than the company retain earning and share premium, which had a total of more than RM 50 million.
As of the latest tracking, ILB had bought in 1.5 million of shares from 26 March 2015 to 2 June 2015, at a cost of RM 1.158 million. Joining in the bandwagon had saw Makoto Takahashi raking in 742,000 shares on 28th May 2015 at an average cost of RM 0.814.
With the huge accumulation and share buy back, this could throw in the assumption of corporate exercise in the future which could be looking at
- Bonus Issue
- Possible Asset Injection of ILS Sdn Bhd (Integrated Logistic Solutions Sdn Bhd, A Malaysian Logistic company, held privately with common shareholder) to raise fund from public for local expansion, which could possibly see par value reduction, share split, private placement and right issues.
ILB outlook is deemed interesting in the coming future. Even without any near term corporate exercise, with the start of the operation of the 3 warehouses in Wujiang and the cash pile, ILB is poised to see a changing game in 2015. However, with the current massive buy back from director and company, the game just need to get hotter.
Putting your bets in ILB warehouse? You decide
Bone's Short Term TP : RM 0.90
Long Term TP : RM 1.20
Regards,
Bones
Cheers and have a nice day
ILB (5614) - ILB - Integrated Cash Pile
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