Boustead Projects

Does anyone have any view on Boustead Project ? tks.

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The Edge Singapore, May 6, 2015

Corporate: Cover story: Stepping into the limelight

(extract)


New phase of expansion

Chu says Boustead Projects is now looking farther afield for work, and using its balance sheet to secure new contracts. "There is work, but it is very competitive right now. So, for the longest time, we have been talking about generating growth, expanding geographically and expanding along the value chain. That is why we have strategic investments," Chu says.

Boustead Projects is currently building a factory for a medical device manufacturer in Kulim, which is near Penang. The company has also taken a 35% stake in a joint venture to build an industrial park in Iskandar Malaysia. Its partners in the joint venture are Tat Hong International and AME Land. Boustead Projects has also undertaken projects in Vietnam and is now looking for opportunities in Indonesia too.

Yet, Chu says he has not given up on getting more work in Singapore. "Every year, we talk about growing geographically, but Singapore never ceases to amaze us. The volume of work is consistent, but project costs are getting challenging. So, we have come up with more solutions," Chu says.

More than a decade ago, Boustead Projects began holding on to the properties it developed for recurring income. A client, Menlo Logistics, had received approval from Jurong Town Corp to allow a third party to own its warehouse. Menlo Logistics approached Boustead Projects to bid for the project to design and build the facility to its specifications and undertook to lease it back for a number of years.

To be sure, Boustead Projects faces a lot of competition in this segment of the market. For starters, there are real estate investment trusts (REITs), which are specifically designed to hold such assets. Recently, general construction companies such as Soilbuild Construction Group and Figtree Holdings have made inroads into the space too. But Boustead Projects has been quietly fortifying its position.


"We moved ahead again and set up the Boustead Development Partnership," says Chu. The 50:50 partnership with Abu Dhabi Investment Council (ADIC), Abu Dhabi's sovereign wealth fund, gives it the financial fire power and reputation to compete with bigger competitors. In March, Boustead Projects secured its first deal under Boustead Development Partnership, winning a contract to build and lease a new building in one-north for pharmaceutical giant GlaxoSmithKline.

Now, the partnership with ADIC could pave the way for Boustead Projects to raise its risk threshold and climb the value chain. According to Chu, the company is now exploring the possibility of working with clients who might not want to own their own air-conditioning system, or even data centres that do not want to own the hardware. Already, Boustead Projects is working with an electricity generation equipment supplier to house its equipment in its new buildings and sell electricity to the tenants.

I have created a new thread for Boustead Project, as a new listed company thread.

Thanks

Regards
Moderator

First award since demerger.

BOUSTEAD PROJECTS AWARDED S$34M DESIGN- AND-BUILD CONTRACT FOR HAFARY FACILITY 

1st project awarded to Boustead Projects following recent listing on Main Board of SGX on 30 April 2015  2nd project awarded to Boustead Projects by SGX-listed Hafary Group  Boustead Projects Group’s order book backlog raised to S$296 million

Singapore, 18 May 2015

Boustead Projects Limited's admission to and listing on the Singapore Exchange Securities Trading Limited was sponsored by CIMB Bank Berhad, Singapore Branch. CIMB Bank Berhad, Singapore Branch assumes no responsibility for the contents of this announcement.

Boustead Projects Limited (“Boustead Projects”) – a leading specialist in real estate solutions – is pleased to announce that it has been awarded a S$34 million contract to design and build an integrated commercial and logistics facility (the “Facility”) for World Furnishing Hub Pte Ltd (the “Client”). The Facility will be located in the Sungei Kadut Industrial Estate in Singapore. Listed on the Main Board of the SGX on 30 April 2015, Boustead Projects is a 51%owned subsidiary of Boustead Singapore Limited, a progressive global infrastructurerelated engineering services and geo-spatial technology group which is separately listed on the Main Board of the SGX. The Client is a joint venture under the home-grown Catalist-listed Hafary Holdings Limited (the “Hafary Group”). The Hafary Group is a leading supplier of premium tiles, stones, mosaic, wood flooring and sanitary ware in Singapore. Through its wellestablished sourcing and procurement network, the Hafary Group imports a wide variety of materials from international manufacturers based in China and Europe and supplies materials to commercial construction, corporate renovation, HDB upgrading, home renovation and redevelopment projects. To be completed in calendar year 3Q 2016, the Facility will have seven floors of space integrating both commercial and logistics aspects. The Facility is the second project awarded to Boustead Projects by the Hafary Group. Boustead Projects previously completed a logistics facility for the Hafary Group at the end of calendar year 2013. Mr Thomas Chu, Managing Director of Boustead Projects said, “This is the first project awarded to Boustead Projects following our recent listing on the Main Board of the SGX on 30 April 2015 and marks an auspicious start to life as a listed corporation. We would like to thank Hafary for entrusting us to design and build yet another strategicallyimportant facility for them. This will also be our first project in the Sungei Kadut Industrial Estate, a centre for the regional furniture industry where buyers and sellers, designers and manufacturers of the industry are concentrating their developments in.”

The latest contract will raise the Boustead Projects Group’s order book backlog (as at the end of December plus new orders since) to S$296 million. This contract is not expected to have a material impact on the profitability, earnings per share and net tangible asset value per share of the Boustead Projects Group in the current financial year ending 31 March 2016. None of the Directors or controlling shareholders of Boustead Projects has any interest, direct or indirect, in the above contract. By Order of the Board Eng Min Geok Company Secretary

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First thing first, Market cap of only ~$300mil but the book order is ~$296mil*.
*it has just announced a $34mil design and build contract tender win today.

RNAV = ~$1.26 (today's tender win of $34mil not reflected yet).

With its Design and Build and lease back model, it would have a stable recurring income base.
Based on the 1H 2015 net income figures, the full year EPS is likely to be ~9 cents. Soilbuild Business Space REIT is trading at around P/E of 15. If we apply this to Boustead Project, it should be trading at ~$1.35.


With such a "low base" market cap, a big tender win (e.g. through strategic partnership with Abu Dhabi's sovereign wealth fund) would easily lift its RNAV and hence market cap accordingly.

u are indeed very curious...

Boustead Projects needed these new contracts to cover their fixed costs and sustained earnings.

There is no doubt a recurrent rental income. However, that amount is around $10+m.

Comparison to REIT is not appropriate as their asset base is insufficient else they would have gone for a REIT.

The space that BP is operating in now is highly competitive - indicated from previous Boustead guidance.

Personally, I think BP is a next cycle story as under current conditions, it is difficult for it to acquire and expand - otherwise they would have done so already.

Vested
Odd Lots
GG

(18-05-2015, 09:25 PM)Curiousparty Wrote: First thing first, Market cap of only ~$300mil but the book order is ~$296mil*.
*it has just announced a $34mil design and build contract tender win today.

RNAV = ~$1.26 (today's tender win of $34mil not reflected yet).

With its Design and Build and lease back model, it would have a stable recurring income base.
Based on the 1H 2015 net income figures, the full year EPS is likely to be ~9 cents. Soilbuild Business Space REIT is trading at around P/E of 15. If we apply this to Boustead Project, it should be trading at ~$1.35.


With such a "low base" market cap, a big tender win (e.g. through strategic partnership with Abu Dhabi's sovereign wealth fund) would easily lift its RNAV and hence market cap accordingly.

I noticed the entire article has been cut-and-pasted, without a link to source. VB respects IP right. Is the article freely distribute-able? I really doubt so.

Regards
Moderator

(19-05-2015, 02:13 PM)Curiousparty Wrote: The Edge Singapore, April 13, 2015

Boustead to seek shareholder approval for demerger plan
...

One of the right way to do it, is to quote only the small relevant section of the article, and states the source.

Anyway, thanks for removing the post, after reminded.

Regards
Moderator

(19-05-2015, 02:58 PM)CityFarmer Wrote: I noticed the entire article has been cut-and-pasted, without a link to source. VB respects IP right. Is the article freely distribute-able? I really doubt so.

Regards
Moderator

(19-05-2015, 02:13 PM)Curiousparty Wrote: The Edge Singapore, April 13, 2015

Boustead to seek shareholder approval for demerger plan
...

Essentially, BP is not doing the "run-of-the-mill" types of industrial space solution, the margin of course would be much lower.

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The Edge Singapore, April 13, 2015 (Extract)


Boustead to seek shareholder approval for demerger plan

<< Growth momentum
Certainly, the group has a lot going for it, and its growth momentum could well continue for some time even as Wong withdraws. For instance, Boustead Projects has formed a strategic partnership with Abu Dhabi's sovereign wealth fund, Abu Dhabi Investment Council, which is opening doors for it. Under the partnership, Boustead Projects acts as a turnkey design-and-build contractor for their developments. Thanks to ADIC, Boustead Projects has managed to win projects in new areas, such as developing properties for biotech companies.

Looking ahead, Wong sees Boustead Projects building data centres, another new field for company. "We want to move one step up the technology ladder. There is potential to build big data centres and, once we are there, we can last a long, long time," he says.

Boustead Projects also plans to expand its geographic reach into China, Vietnam and Indonesia, as well as in Malaysia. >>

BP's clients are generally at the higher end and higher VA segment of economy.


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http://www.boustead.sg/News%20Coverage/2...0worth%20S$137m%20-%20The%20Business%20Times%20Weekend.pdf

The group said its subsidiary will also design and build a warehouse for one of the world's largest corporations in the renewable energy sector.

Earlier this week, Boustead Projects secured the S$20 million contract to design and build the Airbus Asia Training Centre for Airbus Asia Training Centre Pte Ltd, to be located at the Seletar Aerospace Park.

Wong Yu Wei, senior deputy managing director of Boustead Projects, said the firm had strengthened its core "with a bolstered pipeline of design-and-build projects", as well as its new strategic development platform - the Boustead Development Partnership.


In August, Boustead Projects entered into a co-investment partnership with the Abu Dhabi Investment Council, with a potential investment pipeline of over S$600 million.

http://www.boustead.sg/News%20Coverage/2...gapore.pdf

More than anything else, the partnership with ADIC, which manages assets estimated at US$627 billion ($794 billion) , opens the company’s horizon to projects it would not normally consider because the risks are too much to take on by itself. “Now, with this agreement in place, we would dare to look at it because 50% of the risk is shared with ADIC,” says Keith Chu, vice-president for corporate marketing and investor relations at Boustead. “ADIC’s name can also get us better financing terms.”

Looking ahead, some analysts warn that the supply of industrial properties is likely to increase in the next one or two years. “There will be pressure on rent but it’s just a market cycle. So, analysts are advising caution,” says DBS Vickers’ Tan.

Ong takes a less negative view, saying the oversupply is specific to strata-titled developments and does not affect the market as a whole because there are different zones
and different types of industrial properties that attract different users. In the area that Boustead is in, there is even a shortage of supply. End-users looking for land can go only to JTC and they are given land only if they are supported by the Economic Development Board and Spring Singapore, says Ong. The logistics sector is still a popular sector, she says, but with some newbuilds completing this year and leases expiring, rentals are expected to stabilize.