3.1 x F14 PE dirt cheap! gd luck dyodd

 

Lian Beng Group

Ready For A Record Breaking Year

 

Bright outlook next year upgrade to BUY. We caught up with Lian Beng’s management for updates on ongoing construction and property launches, and are now convinced that FY5/14 will be a record breaking year with earnings surpassing its 2012 peak of SGD51.4m. We are also positive that Lian Beng will be able to maintain its dividend payout of 2ct/share payable in the next quarter. We have revised our FY5/14 and FY5/15 estimates by 8-11%, and applied a higher multiple on its construction earnings. Upgrade to BUY with a revised TP of SGD0.68, indicating upside of 30.8%.

Construction orderbook at SGD1.2b. The recent Poh Lian construction scandal offered Lian Beng the opportunity to take-over the Goodwood Residence construction contract, which is scheduled for completion in October 2013. Lian Beng’s orderbook currently stands at SGD1.2b including Dakota Crescent and Laurels, which if completed on schedule by end 2013, will free up manpower for further construction jobs. Since the start of 2013, Lian Beng has secured 7 private sector contracts valued at SGD739m.

New launches selling like hot cakes! King Albert Park, Hong Leong Gardens, and Hougang Plaza were launched year to date. Hougang Plaza, now The Midtown and The Midtown Residences, has achieved an average 62% take-up rate. We expect Lian Beng to begin construction at end 2013 resulting in increased contribution in the 2nd half of FY5/14. Seletar Green is expected to be launched the next quarter.

Well diversified with proven execution strength. At current levels, Lian Beng is trading at 3.1x FY14F P/E, versus peers at between 5x and 7x P/E. We peg Lian Beng construction earnings at 6x, on par with its construction peers. We like Lian Beng for (i) strong orderbook of SGD1.2b comprising of higher margin private sector projects, (ii) latest property launches’ with strong sell-through rates and (iii) a healthy buildup in recurrent income. We upgrade to BUY with a TP of SGD0.68. Lian Beng Group– Summary Earnings Table
FYE May (SGD m)	2011	2012	2013F	2014F	2015F
Revenue	507.3	445.0	446.9	593.6	571.0
EBITDA	81.2	81.5	59.1	95.0	92.6
Recurring Net Profit	48.2	51.5	40.0	68.5	66.4
Recurring Basic EPS (cents)	9.1	9.7	7.5	12.9	12.5
EPS growth (%)	100.4%	6.8%	-22.3%	71.4%	-3.1%
DPS (cents)	1.6	2.0	2.0	2.0	2.0
PER	4.3	4.1	5.2	3.1	3.2
EV/EBITDA (x)	3.1	3.0	6.1	4.4	4.6
Div Yield (%)	4.1	5.1	5.1	5.1	5.1
P/BV(x)	1.1	0.9	0.8	0.7	0.6
Net Gearing (%)	-0.12	-0.37	0.17	0.05	-0.04
ROE (%)	25%	22%	15%	21%	18%
ROA (%)	8%	9%	5%	7%	7%

Private home sales predicted to drop in 2013

Nov 23, 2012 - PropertyGuru.com.sg

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By Andrew Batt:

The number of private home sales in Singapore could drop by more than 20 percent in 2013 after “spectacular” increases this year.

David Neubronner, Head of Residential Project Sales for Jones Lang LaSalle (JLL), issued the warning this week, suggesting that the number of sales this year, which is expected to reach 22,000 units, will correct to “more healthy levels of about 16,000 units” in a worst-case scenario.

In an exclusive interview with The PropertyGuru, he said: “Put in perspective the jump this year, from 15,800 in 2011 to probably 22,000 by the end 2012, has been spectacular. We believe this is not sustainable moving forward and should correct next year."

“In the worst scenario, we estimate the market to correct to the healthy levels of about 16,000 units which were achieved in 2010 and 2011. This is taking into account the anticipated economic slowdown in 2013, clampdown on residency and employment of foreigners.”

Neubronner is also not ruling out a further wave of government cooling measures. He said: “The possibility is always there as long as the buying continues. Based on the recent robust sales volumes and concerns of market foaming, there is always the possibility of another round of measures to take the steam out of the market.”

Neubronner predicts that landed property sales will remain resilient given the limited supply and perennial demand, along with the general aspiration of Singaporeans to upgrade to a landed property. The luxury segment has seen sales volume and values declining over the past year and, according to Neubronner, should bottom out any time soon.

“We anticipate a recovery next year given the values and opportunity on offer,” he added.

The mass and middle market segments are expected to see most of the correcting in 2013, he said, adding that these sectors have been running up rapidly over the past year.

Neubronner also expects the proportion of foreign buyers, which now stands at roughly 20 percent, to stabilise. He said: “Singapore will continue to attract foreign buying interest for a million reasons and we believe the series of measures introduced over the past years will more likely subdue the Singaporeans appetite than the foreigners.”

Neubronner concluded by saying: “Although sales volume will decline, we expect prices to stabilise next year. The fundamentals, like a stable economy with high employment, low interest rates, a robust leasing market in the suburban areas and the overall bullish sentiments, are still strong and we do not see these changing in 2013.”