This is a counter which may be worth looking at and buy on weakness....
Full year May 09 - EPS : 3.21
Historial PE based on 29cents = 9x
Half Time Nov 09 Revenue: $157 million
PAT: $11.4 million
EPS: 2.13 cents
Annualise: 4.26 cents
Forward PE: 6.8x
NTA: 24.68 cents
Attraction
a) Order book hits $820 million which is going to last till 2013. based on yearly turnover of $300 million... they have secured job to last for the next 2-3 years.
b) Lian Beng part of Consortium for LINCOLN SUITES 175 unit project. About 82% or 46 units of the 56 units under Phase 1 were snapped up by the close of the weekend (October 24 25, 2009). Expect to benefit from their development projects as well.
Last edit: 13 years 3 weeks ago by niadmin. Reason: formatting
Hi, thanks for your good summary posting. - Just to confirm, their order book is $820 and not $598m as mentioned? - financial position of the firm does not make it seem like a catch. Just wondering whats the greatest factor and catalyst for one to buy this stock. In terms of construction and property counters, there are some out there at even lower valuations.
Hi, Yes, the order book is now $820 million. Care to share some of the construction and property counters that you think are at lower valuation and more attractive than Lian Beng. The next quarterly result will be in April... and i hope to be able to see increasing profit margin as well as accounting for revenue from their development project. The comfort factor for this counter is order book is sufficient to keep them busy till 2013. I am optimistic than they will be securing more projects in the near future with current hot property market.
u were right on the bk order. anw, i was looking also at the following
Lum Chang - 800mm order bk, 10x 09 pe, 0.86x pb
Lee Kim Tah NA order bk - 12x 09 pe, 0.86x pb
Hock Lian Seng 574mm order bk - 7x 09 pe, 2x pb
LC does luxury home building on top of construction
LKT does India, Aussie, PRC and UK and in retail property mgmt
HLS has expertise in tunnels, expressways, rails and MRTs Im quite positive on HLS barring that Im new and not familiar on construction industry business operations and details.
Reason being large cash position, 2 yrs worth of contracts (PB is 2x as theres WIP liabilities). Strong cash flows and cost management evident from last few years of operations. The risk would be if Marina Bay is done, there could be a sudden slump in orders since we do not build rails and highways regularly.
Going forward, the central line construction can provide support for the firm. However no major upside but i do not aim to make predictions.
let me know bt yr thoughts on Lian Beng or other counters u have in mind. I liked yr post on Parkway but I saw it late and wasnt comfortable with their Novena land purchase back in 2007.
Last edit: 13 years 3 weeks ago by niadmin. Reason: formatting
Key Meeting Takeaways
We visited management recently, who provided us with a positive update of the Group's progress and strategy going forward. We believe Lian Beng is now one of the strongest local main contractors, with a comprehensive and integrated range of capabilities which is unmatched.
Our View
The Group is able to undertake private residential projects as well as civil engineering work which opens up more opportunities and diversifies risk. It also owns a large fleet of equipment and is also able to undertake various works in-house such as scaffolding and readymix concrete production.
This helps the Group reduce reliance on external parties and maintain its healthy margins. (1H10: 7.2%) With the strong contracts win momentum in 2010 (Dakota Crescent:$144m, Centro Residences: $78m), the Group now has a burgeoning net orderbook of $820m to be recognised over the next 3.5 years which should ensure revenue growth. (FY09 revenue of $308m)
There was also good news on the property development front. All its four ventures are now achieving healthy ASPs with good demand takeup, and the Group is expected to book in equity profits when they are fully sold.
Due to the robust property market, management observes a growing number of private residential construction projects available for tender, with an upward trend in average tender prices. Coupled with stable raw material costs, margins should trend higher than current levels.
Action & Recommendation
Lian Beng currently has a net book value of $131m as of 1H10, excluding expected property development profits. We believe its net orderbook of $820m is worth an estimated $80m in future profits.
SINGAPORE, 8 April 2010 Singapore's major homegrown building construction company Lian Beng Group has reported a 52% growth in net profit attributable to shareholders to $17.4 million, or 3.28 cents per share, for the nine months of its 2010 financial year. This compares to a net profit of $11.4 million, or 2.16 cents per share, a year ago.
This was on the back of a 4.5% improvement in revenue to $240.5 million. Leveraging its participation over several areas of the construction value chain, including its ready-mix concrete facility, fleet of construction equipment and in-house scaffolding capabilities, the Group also managed to achieve an improvement in gross profit margin to 13.1%, from 11.2%.
The Group also ended the nine-month period with a stronger balance sheet. Cash and cash equivalents stood at $49.8 million as at 28 February 2010, representing an improvement of $43.1 million over $6.7 million as at 28 February 2009.
Mr Ong Pang Aik, Managing Director of Lian Beng, said, "We are encouraged by yet another strong set of financial results. The consistency in our performance over the last few quarters reflects the resilience of the construction industry, and I hope that we will be able to continue riding the growth path going forward."
The Group continues to enjoy brisk business activity flowing from the buzzing local private residential scene. Just this week, Lian Beng announced that it had clinched a new contract to build The Laurels, marking the Group's third contract secured within a month. The other two contracts, secured earlier in March, were for the construction of Centro Residences and Waterbank at Dakota.
These, together with construction contracts for Waterfront Key and The Gale awarded in the first half of the financial year, has added some $530 million to the Group's order book. The Group's order book stands at $850 million as at 31 March 2010.
Demand for construction services is expected to come from the private residential sector as well as public infrastructure projects, which is gradually making a comeback following a continued uptrend in the country's economy.
