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Stock Profile: Lee and Man Paper
Regional Equity Strategy Q4 2007
Income Statement (HK$ m) Balance Sheet (HK$ m)
FY Mar 2006A 2007A 2008F 2009F FY Mar 2006A 2007A 2008F 2009F
Turnover 3,778 5,161 7,931 11,380 Net Fixed Assets 3,575 5,525 8,326 9,242
Cost of Goods Sold (2,904) (3,799) (5,839) (8,264) Invts in Assocs & JVs 0 0 36 72
Gross Profit 874 1,362 2,092 3,116 Other LT Assets 353 1,281 1,281 1,281
Other Opg (Exp)/Inc (178) (242) (476) (716) Cash & ST Invts 110 215 159 228
EBIT 697 1,120 1,616 2,400 Other Current Assets 1,736 2,825 4,208 5,861
Other Non Opg (Exp)/Inc 0 0 0 0 Total Assets 5,774 9,845 14,009 16,683
Associates & JV Inc 0 0 0 0
Net Interest (Exp)/Inc (71) (78) (124) (188) ST Debt 785 837 537 337
Exceptional Gain/(Loss) 0 0 0 0 Other Current Liab 364 911 1,389 1,814
Pre-tax Profit 626 1,041 1,492 2,212 LT Debt 1,001 1,461 4,297 5,357
Tax (26) (31) (90) (155) Other LT Liabilities 48 65 65 65
Minority Interest 0 0 0 0 Shareholder’s Equity 3,577 6,571 7,720 9,110
Preference Dividend 0 0 0 0 Minority Interests 0 0 0 0
Net Profit 600 1,010 1,403 2,057 Total Cap. & Liab. 5,774 9,845 14,009 16,683
Net profit before Except. 600 1,010 1,403 2,057
EBITDA 795 1,271 1,814 2,684 Non-Cash Wkg. Cap 1,373 1,914 2,818 4,047
Sales Gth (%) 36.3 36.6 53.7 43.5 Net Cash/(Debt) (1,675) (2,083) (4,676) (5,466)
EBITDA Gth (%) 53.0 60.0 42.7 48.0
EBIT Gth (%) 59.8 60.7 44.4 48.5
Effective Tax Rate (%) 4.1 3.0 6.0 7.0
Cash Flow Statement (HK$ m)
Rates & Ratios
FY Mar 2006A 2007A 2008F 2009F FY Mar 2006A 2007A 2008F 2009F
Pre-Tax Profit 626 1,041 1,492 2,212 Gross Margin (%) 23.1 26.4 26.4 27.4
Dep. & Amort. 98 152 198 285 EBITDA Margin (%) 21.0 24.6 22.9 23.6
Tax Paid (7) (16) (90) (155) EBIT Margin (%) 18.4 21.7 20.4 21.1
Assoc. & JV Inc/(loss) 0 0 0 0 Net Profit Margin (%) 15.9 19.6 17.7 18.1
Non-Cash Wkg.Cap. (424) (500) (905) (1,229) ROAE (%) 18.1 19.9 19.6 24.4
Other Operating CF 36 22 124 188 ROA (%) 12.1 12.9 11.8 13.4
Net Operating CF 329 699 820 1,300 ROCE (%) 14.9 15.6 14.4 16.5
Capital Exp.(net) (1,134) (2,730) (3,000) (1,200) Div Payout Ratio (%) 38.7 39.9 40.2 40.0
Other Invts.(net) (1) 0 0 0 Interest Cover (x) 9.8 14.3 13.1 12.8
Invts in Assoc. & JV 0 0 0 0 Debtors Turn (days) 81.0 82.2 84.9 87.2
Div from Assoc & JV 0 0 (36) (36) Creditors Turn (days) 39.2 58.3 67.4 66.4
Other Investing CF (14) (144) 0 0 Inventory Turn (days) 83.1 103.4 100.1 98.1
Net Investing CF (1,149) (2,874) (3,036) (1,236) Current Ratio (x) 1.6 1.7 2.3 2.8
Div Paid (173) (396) (459) (667) Quick Ratio (x) 0.9 0.9 1.3 1.6
Chg in Gross Debt 1,078 1,192 2,536 860 Net Debt/Equity (X) 0.5 0.3 0.6 0.6
Capital Issues 18 1,485 205 0 Capex to Debt (%) 63.5 118.8 62.1 21.1
Other Financing CF (73) (4) (124) (188) N.Cash/(Debt)PS (HK$) (1.7) (1.9) (4.1) (4.8)
Net Financing CF 849 2,279 2,159 5 Opg CFPS (HK$) 0.78 1.20 1.52 2.22
Net Cashflow 29 105 (56) 69 Free CFPS (HK$) (0.84) (2.02) (1.92) 0.09
Valuation Graph : PE
28.0
23.0
18.0
13.0
Price & Price Relative to Index
HK$
38.00
33.00
28.00
23.00
18.00
13.00
8.00
Relative Index
440
390
340
290
240
190
140
8.0
Apr-05 Oct-05 Apr-06 Oct-06 Apr-07
3.00
2003 2004 2005 2006
Lee and Man Paper (LHS) Relative HSI INDEX (RHS)
90
77