Lonseal Corp(TYO.4224): FY2024 Q4 Earning Update
Guidance shows profit will be improved in FY2025, Dividend 4.8%, Still Net-Net.
*I’ve already published stock analysis report for Lonseal Corp(TYO.4224). If you’re interested, please check it out.
Lonseal announced FY2024 Q4 earning update in 2025/05/14. (Link)
Due to the cost pressure on energy price and wage hike, the operating profit was down. The reason why the net profit was down significantly is that impairment for the former head office was recorded. Lonseal moved their head office in FY2024. They also re-evaluated the former office market value, then impairment was recorded because they found that the latest market value is less than book value. The former head office was built in 1990 when the Japanese real estate was huge bubble, so the book value is expensive, which is much different from the current market value.
*Link
Regarding the guidance in FY2025, the profit will be improved because of the energy price settle down and passing on the price. Forward PER is 8x.
Next is the dividend. The company announced the expected dividend is 70 yen, which is same as last year. According to the dividend policy, the target payout ration is 20%-40%, so proposed dividend is in line with this policy.(*Expected payout ratio in FY2025 is 40%.) Yield is 4.7%. It’s not bad.
Finally, let’s look the valuation. Based on the latest financial position, it’s Net-Net. For ‘Cash+PER‘ valuation, we have a margin 71%-126%.
In this valuation, the former head office land value is added. Since this asset is no longer to be used for Lonceal business, I expect it will be sold in the near future. According to the last year Annual report, the former head office land book value was 1,312 million yen. Also, the impairment is 680 million. So, the estimated current value is 632 million. This value is added to the valuation sheet.
*Link
I continue to hold Lonceal stock, waiting the future catalyst such a shareholder return expansion, TOB, MBO…