Lion Forest Industries
Attractive Trading Patterns
Lion Forest Industries, which was featured in my blog on Mega M&A Deals In Malaysia on 22 May, has been trading attractively for the past 3 days. Its stock code on KLSE is 8486. While every single market in Asia dwindled and dawdled on Monday and today, the buying pattern has been very solid in Lion FIB for the past 3 days (you can check out the buying which looks like strategic accumulation, but not very subtle, which leads me to believe the buying is largely genuine rather than syndicate based). As mentioned, the NTA is RM8.21, hence any deal to sell should be struck around RM6.50-RM7.00 at the bare minimum.
LFI through its 97.78% owned subsidiary, Sabah Forest Industries Sdn Bhd is Malaysia's largest producer of printing and writing papers. SFI's main products are paper, pulp, sawn timber, plywood and commercial logs. The subsidiary also produces other products like building materials, lubricants, spark plugs, industrial equipment and automotive components. The respective annual production capacities of SFI for its various products are 150,000 MT for paper, 120,000 MT for pulp, 100,000 m3 for sawn timber, 120,000m3 for plywood and 500,000m3 for commercial logs. In addition, approximately 30% of its wood-based products are exported to countries in the Middle East and the Far East. LFI has a NTA of RM8.21 a share, and even if it is not offered up to its NTA value, market expectations are that its assets could easily fetch around RM6.50-RM7.00 a share. That may be below NTA but it's still a rich price relative to its current share price of below RM4.00.