Construction stocks, ignored for quite some time already, are expected to do well in the next few years, thanks largely to massive projects arising from the recent waves of en-bloc sales.

Tiong Seng Holdings is one of the first to rise. 

Pek TV7.13CEO Pek Lian Guan.For 1Q2018, it posted a 400% jump in earnings per share (net profit: S$4.9 million) following an increase in the profitability of its key construction segment.

Construction gross profit margins improved 3.9 percentage points to 10.0%, mainly due to differences in the project mix of the construction segment recognised over 1Q2018.

The Group continued to pare down debt: Its gearing ratio improved to 0.21 as at 31 March 2018 (31 December 2017: 0.41).









Net profit 
attributable to shareholders




Earnings per share 
(Sing cents)




The Group’s construction segment produced revenue amounting to S$131.8 million in 1Q2018, a 12.3% yoy decline.

In line with management’s objective to conserve profit margins in order to ensure earnings resiliency, profit contribution from the construction segment rose 93.7% yoy to S$7.0 million for 1Q2018.

This was driven mainly by an improvement in profit margins as a result of differences in the profile and profitability of construction projects recognised for 1Q2018 as compared to 1Q2017.

Revenue from the Group’s secondary Property Development segment registered a 45.2% yoy decline to S$8.4 million for 1Q2018, mainly due to the timing of revenue recognition. Revenue was derived from the recognition of 3 units (900 sqm) from the Tranquility Residences Project and 7 units (2,038 sqm) from the Equinox Project.

Approximately S$57.3 million of gross development value was sold but has yet to be recognised as at 31 March 2018. These projects include 102 units (18,073 sqm) of the Equinox Project and 1 unit (299 sqm) of the Tranquility Residences project.

Outlook: Construction
In contrast to sluggish market conditions for the construction sector in 2017, proposed inflows of government infrastructure projects and private sector construction demand promises greener pastures as the year progresses into the remainder of 2018.

Construction companies are generally positive on taking on more construction projects in 2018 in view of the slew of en-bloc projects that could be relaunched as well as upcoming mega infrastructure projects, including the NorthSouth Corridor, Changi Airport Terminal 5 and KL-Singapore High-Speed Rail (HSR).

With the Building and Construction Authority’s (BCA) value of construction contracts awarded this year projected to rise to between S$26.0-S$31.0 billion, construction companies are largely optimistic on replenishing their order books toward the second half of 2018.

Outlook: Property Development in China and Singapore
Despite persistent curbs to dampen speculative demand, China’s new home prices rose for their 35th consecutive month in March, with more cities reporting growth as the government supported demand from first-time buyers.

While many expect tightening measures to be gradually extended to smaller cities at risk of overheating, China's drive to get rid of shanty towns - offering money and resettlement to squatters - may continue to counter cooling demand this year.

Buoyed by the stronger-than-expected economic growth outlook, buyer sentiment in the property market in Singapore has continued to improve significantly. Property sales were off to a good start in January as total transactions in both primary and secondary markets doubled compared to a year ago.

The market is displaying signs of fatigue, especially when most of the recently concluded deals were sold through private treaty after unsuccessful public tenders. In addition, developers are becoming more cautious in their pricing strategy after more land sites were awarded at reserve price levels rather than at a premium.

These developments may translate into less upward pressure on selling prices of future projects.

Stock price 

40 c

52-wk range

25-43 c

PE (ttm)


Market cap

S$178 m


324 m

yield (ttm)


Source: Yahoo!

CEO Pek Lian Guan (白連源) commented, “We are heartened to note that our investments in construction technologies, particularly our Prefabricated Pre-finished Volumetric Construction (“PPVC”) capabilities, have served us well as we secured our two recent contracts. With these new additions, our order book rose to approximately S$594.8 million which is expected to extend till 2020.

"We anticipate a spike in construction demand that is projected to come into play towards the second half of the year. Leveraging on our broad spectrum of construction capabilities, we are confident that our innovative methods will place us in an advantageous position to secure both private and public sector projects slated to roll out.”