Lion Brewery (Ceylon) Plc (LION.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

Comparison

Company

Score

Quality

Valuation

Financial

Technical

Lion Brewery (Ceylon) Plc

Ceylon Beverage Holdings PLC

Distilleries Co. of Sri Lanka Plc

Melstacorp Plc

Why is Lion Brewery (Ceylon) Plc ?

Strong Long Term Fundamental Strength with an average Return on Equity (ROE) of 24.84%

Healthy long term growth as Net Sales has grown by an annual rate of 22.22% and Operating profit at 31.63%
Company's ability to service its debt is strong with a healthy EBIT to Interest (avg) ratio of 6.98

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

OPERATING CASH FLOW(Y) Highest at LKR 19,501.44 MM
DEBT-EQUITY RATIO (HY) Lowest at -48.47 %
RAW MATERIAL COST(Y) Fallen by -7.5% (YoY)

With ROE of 28.15%, it has a fair valuation with a 3.94 Price to Book Value

The stock is trading at a premium compared to its peers' average historical valuations
Over the past year, while the stock has generated a return of 42.12%, its profits have risen by 13.2% ; the PEG ratio of the company is 1.1

Real-Time Research Report

Verdict Report

How much should you buy?

Overall Portfolio exposure to Lion Brewery (Ceylon) Plc should be less than 10%
Overall Portfolio exposure to Beverages should be less than 30%

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

When to exit? - We will constantly monitor the company and suggest at the appropriate time to exit from the stock

Is Lion Brewery (Ceylon) Plc for you?

Medium Risk, High Return

Absolute

Risk Adjusted

Volatility

Lion Brewery (Ceylon) Plc

42.4%

1.74

33.63%

Sri Lanka CSE All Share

41.16%

2.63

15.67%

Quality

Management Risk

Growth

Capital Structure

Quality grade scale :

Below Average, Average, Good, Excellent

Quality key factors

Factor

Value

Sales Growth (5y)

22.22%

EBIT Growth (5y)

31.63%

EBIT to Interest (avg)

6.98

Debt to EBITDA (avg)

Net Debt to Equity (avg)

-0.20

Sales to Capital Employed (avg)

3.11

Tax Ratio

39.60%

Dividend Payout Ratio

38.70%

Pledged Shares

Institutional Holding

ROCE (avg)

57.96%

ROE (avg)

24.84%

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

3.94

EV to EBIT

7.45

EV to EBITDA

6.35

EV to Capital Employed

5.30

EV to Sales

1.02

PEG Ratio

1.06

Dividend Yield

0.01%

ROCE (Latest)

71.23%

ROE (Latest)

28.15%

Technicals

Technical key factors

Indicator

Weekly

Monthly

MACD

Bullish

RSI

No Signal

Bollinger Bands

Mildly Bullish

Bullish

Moving Averages

Bullish (Daily)

KST

Mildly Bearish

Bullish

Dow Theory

No Trend

Mildly Bullish

OBV

No Trend

Mildly 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

7What is working for the Company

OPERATING CASH FLOW(Y)

Highest at LKR 19,501.44 MM

DEBT-EQUITY RATIO (HY)

Lowest at -48.47 %

RAW MATERIAL COST(Y)

Fallen by -7.5% (YoY

CASH AND EQV(HY)

Highest at LKR 45,404.04 MM

OPERATING PROFIT MARGIN(Q)

Highest at 19.11 %

-2What is not working for the Company

ROCE(HY)

Lowest at 28.83%

Here's what is working for Lion Brewery (Ceylon) Plc

Debt-Equity Ratio

Lowest at -48.47 % and Grown

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

MOJO Watch

The company has been reducing its borrowing as compared to equity capital

Debt-Equity Ratio

Operating Cash Flow

Highest at LKR 19,501.44 MM

in the last three years

MOJO Watch

The company has generated higher cash revenues from business operations

Operating Cash Flows (LKR MM)

Operating Profit Margin

Highest at 19.11 %

in the last five periods

MOJO Watch

Company's profit margin has improved

Operating Profit to Sales

Cash and Eqv

Highest at LKR 45,404.04 MM

in the last six Semi-Annual periods

MOJO Watch

Short Term liquidity is improving

Cash and Cash Equivalents

Raw Material Cost

Fallen by -7.5% (YoY)

MOJO Watch

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

Raw Material Cost as a percentage of Sales

Depreciation

Highest at LKR 783.49 MM

in the last five periods

MOJO Watch

The expenditure on assets done by the company may have gone into operation

Depreciation (LKR MM)