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LMA is as dead as "ghost town"

Elidor
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03-Nov-2007 10:55

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OCBC thinks that this will go up, TP at 0.52

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moneymatters
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03-Nov-2007 09:46

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whether price will head North or South - think it is better to let Mr. Market decides. Porter Orlin & UBS certainly think the recent selling was too drastic and have loaded up big time.

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leechongpeng
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03-Nov-2007 06:16

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				Net Earnings	($m)	Earnings Per	Share(cts)	Net Earning
Company	Date	Period	Currency	This Year	Last Year	This Year	Last Year	Gain %
LMA Intl	20071101	Q3	US	1.230	5.255	0.480	0.970	-76.594
LMA Intl	20070807	Q2	US	5.933	7.876	1.020	1.360	-24.670
LMA Intl	20070508	Q1	US	3.489	4.336	0.680	0.800	-19.534

Earning been going down. US dollars will continue to go down.

In Singapore dollar, it will mean a further reduction in earning.

Why would anybody think this counter will goes up?

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moneymatters
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02-Nov-2007 20:43

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http://info.sgx.com/webcorannc.nsf/37e9d50ee377b2304825735f00233861/a7e8e201587b45aa48257387001ad1e5?OpenDocument

http://info.sgx.com/webcorannc.nsf/37e9d50ee377b2304825735f00233861/0883aa105176f35648257387003a1610?OpenDocument

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ROI25per
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02-Nov-2007 20:15

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http://www.remisiers.org/research//LMA-071102-OIR.pdf

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moneymatters
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02-Nov-2007 20:14

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don't think shareholders have any issue with 57 million share option granted since the bar/excercise price is set at $1.06. For those who have bought recently at sub 40 cts level, you will be most happy to see some deserving key executive excercise their options above $1.20 (3X from current level). Until then, these guys need to work bloody hard to get the share price to move North

FYI, OCBC has buy call at 0.52

http://www.ocbcresearch.com/Article.aspx?type=research&id=20071102095053_29115

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jackjames
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02-Nov-2007 19:29

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vested at 0.42 today... , quite promising to go up, company starts the share buy back today, and UBS buying today again..... they are quite hungry to buy up recently..

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KiLrOy
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02-Nov-2007 19:17

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Yells: "I buy only what I can see."

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Good inside review. Company standing a thin edge of the 'chinese wall'. tsk tsk tsk.

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ROI25per
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02-Nov-2007 18:45

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Published November 2, 2007

LMA's share option plan raises questions

By MICHELLE QUAH

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MEDICAL equipment maker LMA International reported lower third quarter earnings yesterday; but its troubles go farther back than that. The past fortnight or so has been a tough one for the company, since it revised its guidance for its FY2007 financial performance.

After the company announced on Oct 11 that its net income for the current financial year will fall - instead of increase, as earlier expected - from the previous year, its stock has shed about a third of its value and analysts have cut their price targets and downgraded the counter.

Closing at 43 cents yesterday, LMA shares have lost 24 per cent of their value - or 13.5 cents - since their close of 56.5 cents on Oct 11. JPMorgan has since reduced the company's rating from overweight to underweight and cut its price target from 68 cents to 37 cents, while Credit Suisse has downgraded the stock from neutral to underperform and lowered its price target from 59 cents to 45 cents.

This dismal stock price performance brings to mind LMA's generous executive share option plan - which, as an incentive reward scheme, now seems at odds with its share performance.

Potential dilution

The Singapore-listed, Dutch company - known best for its LMA laryngeal mask, which provides airway support to patients during surgery - has one of the more generous employee stock option schemes here.

Since its adoption in 2005, the scheme has awarded 57 million shares as options to its directors alone - of which all are still outstanding, according to its annual report for the financial year ended Dec 31, 2006.

These 57 million shares are equal to about 10 per cent of the 587.775 million shares LMA has issued - a sizeable proportion indeed. The estimated fair value of the options granted, that is, the stock compensation charge recorded in the company's books in 2006, amounted to US$1.5 million (S$2.2 million) - compared to its net income for the year of US$22.5 million.

Such a substantial share option grant will no doubt raise concerns among LMA's other shareholders as to the potential dilution of their stakes, when these options are exercised.

The life of these stock options was also recently extended - at an extraordinary general meeting in April last year - from seven years to 10 years, increasing the options' intrinsic value.

Investors should ask if LMA's generous executive share option plan will be tweaked to take into account the more modest financial performance the company is expected to rack up this year.

But perhaps a more compelling question is why LMA has chosen to grant such a large number of stock options to its independent directors?

Of the 57 million stock options granted to LMA's directors, 13.5 million options went to its three independent directors - David Wong, Chew Heng Ching and Lim Hock Beng. They each got 4.5 million options.

There's no doubt as to their contribution; but should a company's independent directors - whose very mandate is to remain independent, in order to safeguard the interests of stakeholders other than the majority shareholders - get such a large number of stock options, if at all?

There are those who believe that owning a stake in a company aligns one's interest to that of the company's. But the Enron and Worldcom sagas at the turn of the century have shown just how management and directors' objectives can deviate wildly from the company's, when they are heavily rewarded with stock options.

Also, unlike shareholders, the holders of stock options participate in the upside but have little downside risk; so, options don't necessarily align holders' interests with that of the company.

Independent directors

Furthermore, compensating independent directors with a large number of stock options threatens their very mandate to remain independent - and encourages them to be more focused on the short-term and volatile movements of a company's share price, which can also be manipulated.

For that reason, large corporations such as Samsung have refused to grant stock options to their independent directors - in order to maintain their independence.

In LMA's case, there's also the issue of its compensation committee - which decides on remuneration matters, including share option grants - being two-thirds made up of these independent directors.

Chew Heng Ching and Lim Hock Beng sit on LMA's compensation committee and, according to the company's annual report, 'determine specific remuneration packages for each executive director, as well as the granting of the share options in accordance with the rules of the company's executive share option scheme'.

The annual report adds that 'no director is involved in determining his own remuneration'. But even if Mr Chew and Mr Lim do not decide on their own rewards, investors should ask if it is necessarily the best practice for the independent directors to be deciding on the compensation for other independent directors.

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hikitty
Master

02-Nov-2007 18:32

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Don't be too happy for those who have bought LMA shares. LMA is NOT out of the wood yet. Price is likely to dip again and consolidate before its painful crawl up the cliff.

Is Ambu allowed to continue selling imitations of LMA products, pending LMA's patent prosecutions against its subsidiaries in US, China and Malaysia, and Ambu's appeal in Germany (if I am not wrong) against its patent prosecution in Germany?. Does anyone know? Unfortunately, it will take some time for the cases to be heard, and the payment of damages by Ambu to accrue to LMA as profit, coz the judiciary in those countries are not as efficient as Singapore's. Wow, expect a windfall for LMA when the damages are finally paid by Ambu.

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Henry$$$
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02-Nov-2007 18:05

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Load. Up trend!

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ten4one
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02-Nov-2007 14:15

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"The World is A Stage, You and I are merely Actors and Actresses....and play our parts." In fact, that could also apply to the Stock Markets the World over! Play your part well, you win; play it badly, you're a loser. Try to change the script, you're 'dead'!

Whatever you do, don't stay in the Box for too long, get out and think! Cheers!

For LMA, seriouly the Management Team have to really work harder to avoid any 'unwanted' attentions from now on. One more bad move or any bad news is all you need to send the px to the FLOOR this time. I'm concerned and aware of the Company's Share Options; and their running costs which is always rising!

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Manikamaniko.
Master

02-Nov-2007 13:10

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It's good to read again Ten4One's excellent post on the multitude of market players in existence.

On an uptrend, many will take the profit which they have made when they bought low low...
One must not exclusively cloud one's thinking with dominant ideas of manipulators 'controlling the market'.

Avoiding personal opinion and prejudice is the best way to go...

And this is achieved by being a chartist (ie. simply observe only price action alone)

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hikitty
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02-Nov-2007 11:18

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Look at the low volume transacted this morning. Don't be tricked by the "manipulators" (contra traders) who are still trying to prop up the price. As they buy, the selling volume keeps on increasing!

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hikitty
Master

02-Nov-2007 11:04

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Buying interest in LMA through rotational play seems to be over for now? Contra players seem to be still trying to probe up the price?

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TradeChancellor
Veteran

02-Nov-2007 09:47

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From the looks of the results, the worst seems over as they are now trying to revamp the system. I think the current stock price is already built into considerations for Q4 results too. So if Q4 is better than expected, the price might rise?

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hikitty
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02-Nov-2007 09:01

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When the 3rd quarter report is viewed in its proper perspective, the selldown was clearly overdone. Comparative figures for total income up to Sept: 2006: $17,063million vs 2007: $10,208 million. Unfortunately, the manipulator or manipulators of LMA shares clearly DON'T have deep pockets, unlike Starcruise and are rather cheapskate. LMA manipulators should look at Starcruise's trading volume.! SC has never been consistently profitable every quarter and yet it has been pushed north very often!

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ten4one
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02-Nov-2007 08:27

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Simple logic moneymatters - willing Sellers, willing Buyers....oneside thinks it is goodbye while another thinks it is good-buy! Without them, you & I would have buy, hold and watch ..............into the next horizon :) These're the people that the STock Markets so interesting and dynamic!

Hikiity, the tree may not save you from the onslaught and could easily be uprooted.....unless it s a BAYAN 'TREE Smiley

BTW LMA's result is out, go check it out! Don't expect too much and you won't be disappointed! Cheers!

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Manikamaniko.
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01-Nov-2007 16:28

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Hikitty... :)

From your last post below, it would seem that you are actually quite a nimble trader, a far cry
from the 'loyal' investor who holds a stock through thick and thin, through its highs and lows...

I may be wrong, but I hope you are, so you will avoid the bigger uncertainties of the longer term...

I mean... who can tell there won't be a major bear market in the months ahead?... Smiley

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moneymatters
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01-Nov-2007 14:34

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ten4one, what twisted logic are we talking here when the former SSH/FM paid 0.88 for their shares and the latter bought it for a song below 0.4.

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