L NG Re s o u r c e s Bhd (extracted from Jupiter)

LNG is principally engaged in high precision engineering and precision injection moulding services, specialising in providing a host of synergistic operations ranging from precision moulds, tools, dies, jigs and fixtures design, modification, fabrication, repairs and assembly of final precision injection mouldings.

Quarterly Revenue and EPS improving
The last four quarters has seen improvement in its revenue and bottom-line, compared with a year ago. In the latest quarter (Q3), LNG achieved revenue of RM8.2m which is higher than last year’s quarter by 7.5% while pretax profit increased to RM0.9m from RM0.8m. The higher revenue and pretax profit was due to the recovery in the connectors, semiconductor and the electrical and electronics (E&E) industries.

Both divisions, the precision engineering and the precision plastic injection moulding divisions, achieved higher revenue. On a quarter on quarter basis, both revenue and pretax profit was lower due to lower contribution from the precision division.

Has strong balance sheet to capitalise on opportunities
With total debt of only 0.8m and cash of RM11.2m, LNG is net cash to the tune of more RM10m. This puts LNG in an advantageous position to capitalize on opportunities that may come their way given the improving economic conditions in the US, which in turn would lead to an increase in demand for semiconductors and electrical goods, as corporations and consumers spend more.

In the short term, LNG is unlikely to go to shareholders for funding (unless it is entering into a lucrative venture that has high funding needs) as it still has the ability to gear up - not altogether a bad idea given the low interest rates.