Aug 1, 2011

LPCK still too cheaper than LPKR

Small to medium size property developer PT Lippo Cikarang Tbk (LPCK), owned by Lippo Group, has skyrocketed 265% in  the last 6 months, while its larger sister company PT Lippo Karawaci Tbk (LPKR) only gained 34.48% in the same period.
Investors finally recognized that the valuation of Lippo Cikarang is too cheap compared to Lippo Karawaci. But, Lippo Group likely prefers to provide press statement of LPKR rather than LPCK. In November last year, Insider Stories tried to write about LPCK as an alternative compared to the expensive stock Lippo Karawaci. 
LPCK today surged 8% to Rp1,280 per share from Rp350 in 6 months ago. Referring to the first half earning of LPCK at Rp141.51 per share, price to earning ratio (PER) of LPCK is 8.97x.  
Using the same benchmark applied to LPKR which recorded Rp13.65 EPS, its PER is 57.87x, too expensive compared to its sister, Lippo Cikarang. The size is not always a matter.

Disclosure: No position at the stock mentioned above.

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