Lankem Ceylon Plc (LCEY.N0000) Stock Recommendation | Score, Valuation, Technicals & Financial Trend

Score

Click here to find our call on this stock

Strong Sell

Sell

Hold

Buy

Strong Buy

MarketsMojo — Loved in India, Now Global

The power of Mojo is now in 29 countries. Explore global equities with the same cutting-edge features you love.Unlock 29 Markets

Comparison

Company

Score

Quality

Valuation

Financial

Technical

Lankem Ceylon Plc

Singer Industries (Ceylon) Plc

Why is Lankem Ceylon Plc ?

Weak Long Term Fundamental Strength as the company has not declared results in the last 6 months

Poor long term growth as Net Sales has grown by an annual rate of 21.20% over the last 5 years
High Debt Company with a Debt to Equity ratio (avg) at times
The company has been able to generate a Return on Capital Employed (avg) of 14.52% signifying low profitability per unit of total capital (equity and debt)

The company has declared Negative results for the last 3 consecutive quarters

OPERATING CASH FLOW(Y) Lowest at LKR -1,116.74 MM
ROCE(HY) Lowest at -22.9%
DEBTORS TURNOVER RATIO(HY) Lowest at 4.29%

Risky -

The stock is trading risky as compared to its average historical valuations
Over the past year, while the stock has generated a return of 35.67%, its profits have fallen by -66.3%

Underperformed the market in the last 1 year

The stock has generated a return of 35.67% in the last 1 year, much lower than market (Sri Lanka CSE All Share) returns of 61.92%

Real-Time Research Report

Verdict Report

How much should you sell?

All quantity irrespective of whether you are making profits or losses

(If sector exposure > 30%, please use optimiser tool to see which are the best stocks to hold in Specialty Chemicals)

When to re-enter? - We will constantly monitor the company and review our call based on new data

Is Lankem Ceylon Plc for you?

High Risk, Low Return

Absolute

Risk Adjusted

Volatility

Lankem Ceylon Plc

35.67%

0.66

44.54%

Sri Lanka CSE All Share

60.36%

3.56

17.37%

Quality

Management Risk

Growth

Capital Structure

Quality grade scale :

Below Average, Average, Good, Excellent

Quality key factors

Factor

Value

Sales Growth (5y)

21.20%

EBIT Growth (5y)

48.19%

EBIT to Interest (avg)

1.19

Debt to EBITDA (avg)

6.20

Net Debt to Equity (avg)

4.43

Sales to Capital Employed (avg)

2.11

Tax Ratio

100.00%

Dividend Payout Ratio

Pledged Shares

Institutional Holding

ROCE (avg)

14.52%

ROE (avg)

15.01%

Valuation

Valuation Scorecard

Valuation grade scale :

Very Risky, Risky, Very Expensive, Expensive, Fair, Attractive, Very Attractive

Valuation Key Factors

Factor

Value

P/E Ratio

Industry P/E

Price to Book Value

EV to EBIT

9.47

EV to EBITDA

7.30

EV to Capital Employed

0.82

EV to Sales

0.38

PEG Ratio

Dividend Yield

ROCE (Latest)

8.63%

ROE (Latest)

-13.45%

Technicals

Technical key factors

Indicator

Weekly

Monthly

MACD

Mildly Bearish

Bullish

RSI

No Signal

Bearish

Bollinger Bands

Bullish

Mildly Bullish

Moving Averages

Mildly Bullish (Daily)

KST

Mildly Bearish

Bullish

Dow Theory

No Trend

OBV

No Trend

Bullish

Technical Indicator Scale: Bearish, Mildly Bearish, Sideways, Mildly Bullish, Bullish Turned

Technical Movement

Analyse All Technical Factors

Financial Trend

Financial Trend Scorecard

Financial Trend scale:

Very Negative, Negative, Flat, Positive, Very Positive, Outstanding

5What is working for the Company

PRE-TAX PROFIT(Q)

At LKR 439.44 MM has Grown at 264.74%

CASH AND EQV(HY)

Highest at LKR 2,014.34 MM

NET SALES(Q)

Highest at LKR 10,975.36 MM

-21What is not working for the Company

OPERATING CASH FLOW(Y)

Lowest at LKR -1,116.74 MM

ROCE(HY)

Lowest at -22.9%

DEBTORS TURNOVER RATIO(HY)

Lowest at 4.29%

RAW MATERIAL COST(Y)

Grown by 5.76% (YoY

INTEREST(Q)

Highest at LKR 443.63 MM

NET PROFIT(Q)

Lowest at LKR -249.18 MM

EPS(Q)

Lowest at LKR -4.84

Here's what is working for Lankem Ceylon Plc

Pre-Tax Profit

At LKR 439.44 MM has Grown at 264.74%

over average net sales of the previous four periods of LKR 120.48 MM

MOJO Watch

Near term Pre-Tax Profit trend is very positive

Pre-Tax Profit (LKR MM)

Net Sales

Highest at LKR 10,975.36 MM

in the last five periods

MOJO Watch

Near term sales trend is positive

Net Sales (LKR MM)

Cash and Eqv

Highest at LKR 2,014.34 MM

in the last six Semi-Annual periods

MOJO Watch

Short Term liquidity is improving

Cash and Cash Equivalents

Here's what is not working for Lankem Ceylon Plc

Net Profit

At LKR -249.18 MM has Fallen at -476.13%

over average net sales of the previous four periods of LKR -43.25 MM

MOJO Watch

Near term Net Profit trend is very negative

Net Profit (LKR MM)

Debtors Turnover Ratio

Lowest at 4.29% and Fallen

In each half year in the last five Semi-Annual periods

MOJO Watch

Company's pace of selling Debtors has slowed

Debtors Turnover Ratio

Operating Cash Flow

Lowest at LKR -1,116.74 MM

in the last three years

MOJO Watch

The company's cash revenues from business operations are falling

Operating Cash Flows (LKR MM)

Interest

Highest at LKR 443.63 MM

in the last five periods and Increased by 8.24% (QoQ)

MOJO Watch

Rising interest cost signifies increased borrowings

Interest Paid (LKR MM)

Net Profit

Lowest at LKR -249.18 MM

in the last five periods

MOJO Watch

Near term Net Profit trend is negative

Net Profit (LKR MM)

EPS

Lowest at LKR -4.84

in the last five periods

MOJO Watch

Declining profitability; company has created lower earnings for shareholders

EPS (LKR)

Raw Material Cost

Grown by 5.76% (YoY)

MOJO Watch

The company's ability to pass on the cost of raw materials to customers has deteriorated; this may lead to a fall in profit margin

Raw Material Cost as a percentage of Sales

Non Operating Income

Highest at LKR 0.61 MM

in the last five periods

MOJO Watch

Increased income from non business activities may not be sustainable

Non Operating income