COUNTER: LIAN BENG GROUP LTD
BUSINESS:
Established in 1973, the home-grown building construction group is principally involved in the construction of residential, industrial and commercial projects, and civil engineering projects as a main contractor. As an A1 grade contractor with the Building and Construction Authority (BCA), it is allowed to tender for public sector building projects of unlimited contract value. Its has business footprint in overseas, such as Malaysia, Indonesia and even Maldives.
BUSINESS:
Established in 1973, the home-grown building construction group is principally involved in the construction of residential, industrial and commercial projects, and civil engineering projects as a main contractor. As an A1 grade contractor with the Building and Construction Authority (BCA), it is allowed to tender for public sector building projects of unlimited contract value. Its has business footprint in overseas, such as Malaysia, Indonesia and even Maldives.
HIGHLIGHTS:
(1) The latest financial results saw around 6% jump on both revenue and profit to shareholders over last 9 months as compared to same period last year. Order book stood at approximately $640 mil, which provides sustainable activities flow till FY2017. Debt to asset ratio is maintained at healthy range of 50%.
(2) Besides construction, the group has diversified into property development. Currently, it has stakes in 10 property development and investment projects, with about S$90 mil to be progressively recognized subsequently.
(3) Facing with competitive environment in construction, the group has been building its recurrent income stream through supply of ready-mixed concrete, Asphalt, leasing of construction equipment and rental income from investment properties (joint venture with Century for local worker dormitories).
(4) UOB rated this counter at 0.725 based on 25% discount from RNAV evaluation.
REASONS TO BUY:(2) Besides construction, the group has diversified into property development. Currently, it has stakes in 10 property development and investment projects, with about S$90 mil to be progressively recognized subsequently.
(3) Facing with competitive environment in construction, the group has been building its recurrent income stream through supply of ready-mixed concrete, Asphalt, leasing of construction equipment and rental income from investment properties (joint venture with Century for local worker dormitories).
(4) UOB rated this counter at 0.725 based on 25% discount from RNAV evaluation.
(1) From price chart, the counter has tendency to break out from recent down falling channel. Transaction volume was relatively low during the falling period, so it suggests that major shareholder was not selling in any panic mode. Trader could position for potential uptrend.
(2) The counter has been maintaining earning with growth over the challenging environment in construction sector. Looking ahead, it could generate significant revenue from investment property and leasing business. Higher evaluation on shares price could be realized in future.
(3) Annual dividend is around 4%
ENTRY PRICE:
Immediate support and resistance 0.55 and 0.58. So suggestion is to BUY within this range.
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