Lee Metal Group | Dividend Yield 6.8%
Lee Metal's facility for manufacturing reinforcement steel rebar and mesh products.
Photo: Company
Lee Metal Group trades in steel on the global market as well as supplies reinforcement steel rebar and welded mesh to the local market.
This stock is tops in its dividend yield at 6.8% as its stock price has declined some 20% in the past 12 months to 32.5 cents.
The Group is facing with headwinds in both business segments:
» China’s steel demand contracted by 3.4% in 2014, a sharp reversal from the 6% growth a year ago, and making it the first time that steel consumption dropped in 14 years.
» Its steel fabrication business has been affected by the slowdown in the local construction sector growth (from 6.3% in 2013 to 3.0% in 2014).
These two factors have affected its profitability: 1QFY2015 net profit is down 33.6% at S$4.1 million.
A change in global steel demand and a recovery in the local construction sector will revive its fortunes.
