Luxchem Corporation Berhad was incorporated on 4 September 1991. It was listed in Bursa Malaysia Main Market on 27th June 2008 at an IPO price of RM1.10. The shares price drop to below 60 sen in the same year but start to recover in 2009.
The main activities of Luxchem are manufacturing and trading of unsaturated polyester resin and related products. They are also involved in importation and distribution of chemical and pertochemical products. Three of Luxchem’s subsidiaries are ISO9001:2000 certified.
Unfortunately, there is no coverage by research house on Luxchem for the latest Fair Value/Target Price. The last done was from CIMB Retail Research in July 2010 whose make a sell recommendation with a target price of RM1.15.
When compare to FBM KLCI, Luxchem shares price are really lagging. In 2010, FBM KLCI move from 1200 to almost 1600 points, but Luxchem share prices stay in the range of RM1.03 to RM1.20.
However, on the positive side, Luxchem is paying a very good dividend since it was listed in 2008. For the past 3 years, the dividend yield stays above 7% which is more than double of the current fixed deposit rate. Furthermore, Luxchem has a low PE ratio.
The table below is the financial summary of Luxchem for the past 3 years.
|Net Profit (‘000)||17,821||18,971||20,483|
|PE Ratio (x)||4.52||7.20||6.66|
|Dividend Yield (%) *||8.06||7.62||7.62|
*Based on price on last trading day of the year
On 30th March 2011, Luxchem share prices close at RM1.12. They declare 5 sen final dividend with an ex-date of 7th June 2011. At last trading price, the dividend yield still maintain above 7%.