SG quarter growth GDP = 0.1%, revising this year's growth from 1.8% to 1.4%
Given the current economic backdrop, construction stocks may be coming up next. Based on trading activity, I have noticed quite a bit of buyups for this counter LianBeng.
Yet on the other hand, please note that construction counters are generally quiet; not much volume.
Something to consider.
SINGAPORE: Lian Beng 1QFY16 Results Flash Note (Meet expectations)
| Company | Share Price | Recommendation | Our Target Price | Within Expectation (Y/N) | 1QFY16 net profit YoY | Highlights of Results |
| Lian Beng (LBG SP) | 0.51 | BUY | 0.79 | Y | +169% | See comments attached |
1QFY16 net profit surged 169% to S$32.3m (representing 36% of our full year forecast) due mainly to the recognition of property development profits namely Newest, KAP residences, Eco-tech@Sunview and The Midtown. Gross profit however fell 8.5% due to lower sales from the construction and ready mixed concrete segment. As at 31 Aug 15, Lian Beng has an order book of S$452m.
Healthy net gearing. Lian Beng continue to maintain a healthy net gearing of 26.4%.
Pending the results briefing on Thursday, we maintain our BUY recommendation and SOTP target price of S$0.79. Of note, Lian Beng is currently trading at 0.53x P/B, 2.9x FY16F PE with a FY15 dividend yield of 5.9%.
Link to results: http://infopub.sgx.com/FileOpen/Results.ashx?App=Announcement&FileID=373299
Thanks
Regards
Loke Chunying
UOB Kay Hian Research
DID: +65-6590 6637
Email: cyloke@uobkayhian.com
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