Hock Lian Seng

[GFG]

HLS just won a contract from LTA to construct stabling at gali batu depot
Worth 137.4 million
Project commences next mth and is expected to be completed by nov 2019

[brattzz]

no wonder on the run-up,
It's a big one!

[GFG]

no wonder on the run-up,
It's a big one!

I don't think the contract win is the reason though
HLS has won many other much larger contracts with hardly any interest
137 million is not that large, and earnings will only likely come in starting 2016

[valuebuddies]

It is more a "pump and dump" exercise, current price seems a bit high to add more imo, as Skywood effect still not over yet

[GFG]

no wonder on the run-up,
It's a big one!

I don't think the contract win is the reason though
HLS has won many other much larger contracts with hardly any interest
137 million is not that large, and earnings will only likely come in starting 2016

(Bloomberg) -- Roland Thng is seeking to shake up Singapore’s staid corporate landscape, setting up a new hedge fund focused exclusively on influencing the way locally listed companies are run.

The 33-year-old has established EVA Capital SP with $5 million, and initially plans to take stakes in small-and medium-sized construction and engineering companies in order to pressure them to improve performance.

“It’s a new approach and the market will need some time to get used to it,” Thng, who is chief executive officer of Singapore-based fund-management firm Dektos Investment Corp., which runs EVA Capital, said in an interview. “Activist investing is a bit offensive in the Singapore and Asian context.”



Many Singapore companies have a controlling shareholder, which makes it easier to resist demands from activist investors, said Hugh Young, the Asia managing director at Aberdeen Asset Management Plc in Singapore.

“It also isn’t the cultural norm,” Young said. “It’s all more consensual in Asia, less confrontational. Things have been done a lot more quietly, behind closed doors.”

Construction, Engineering

Thng said he plans to target Singapore’s smaller construction and engineering companies, which often have a lot of cash or receivables due to the recent building boom.

Dektos may buy stakes in some of them and push management to use the cash for special dividends or share buybacks, which would likely boost the companies’ shares. It may also push firms to convert their debt to cheaper convertible bonds.

The fund has already bought a stake of about 2 percent in engineering firm Hock Lian Seng Holdings Ltd., he said. The company has a market capitalization of S$181 million, a dividend yield of 5.1 percent and trades at 9.6 times its earnings, according to data compiled by Bloomberg.

Dektos expects the company to continue paying out attractive dividends and will take an activist approach if that doesn’t happen, Thng said.

Of the about 60 companies in the construction and materials industry listed in Singapore, 42 have a market capitalization of $150 million or less, according to data compiled by Bloomberg.

Share Activists

High-profile activist investors have had a mixed record in their efforts to put pressure on Singapore companies.

Last year, Paul Singer bought a stake in Wing Hang Bank Ltd. in what was said to be an attempt to push Oversea-Chinese Banking Corp. to raise its takeover bid for the Hong Kong lender. Singer has a fearsome reputation as an activist investor after successfully suing Argentina in the U.S. courts for repayment after the country’s $95 billion default. In Singapore, OCBC didn’t respond to the activist, who eventually sold his stake in Wing Hang without getting a higher bid.

Short seller Muddy Waters LLC put pressure on Singapore-listed commodity trader Olam International Ltd. by publicly questioning its finances in a report in 2012, which caused Olam’s stock to plummet. Then, Singapore’s state-owned investment firm Temasek Holdings Pte bought a controlling stake in Olam last year, triggering a rally in the company’s shares.

Thng, who previously worked as a foreign currency trader at OCBC, started Dektos in 2010 with managed accounts focusing on macro and equity strategies.

In 2014, the investment firm appointed Winstedt Chong as chairman. Before joining Dektos, Winstedt was executive chairman of Hartawan Holdings Ltd., which bought Indonesian gold miner Wilton Resources Holdings Ltd. for S$300 million in a reverse takeover completed in December 2013.

Thng said Chong’s role as an executive director of Dektos was approved by the Monetary Authority of Singapore, more than a decade after he was convicted and fined in a Singapore court for stock-price manipulation. Thng said the verdict has “absolutely no impact in our investments.”

Chong declined to comment on his conviction when contacted through Dektos. The MAS doesn't comment on its dealings with specific financial institutions or individuals, it said in an e-mail.


This is the reason for hock lian seng's sharp rise

[GFG]

being played this new year, moving up very fast to historical highs without any news.

Not that there's no news...
Hock lian seng's 2 industrial projects at kaki bukit and gambas are going to TOP soon
These 2 projects have "completed contracts" revenue recognition
In other words, the expenses are already recognized, but the revenue will only be recognized upon TOP
TOP is slated to be sometime early 2015

Upon TOP, HLS will recognize a big jump in revenue.
Both projects also have very good sales. One is 99% sold, the other is ard 75% sold.

(Vested)

would think that those TOPs are already factored into the price much like Weehur which did not jump much after their good Q3 results.

apparently they do not seem to have factored in yet. Maybe someone has leaked that there will be a big bonus dividend ang pow from HLS this year.

was considering vesting @.265 but the MOS was not enough yet.

Vested at 0.25-0.255
@ 0.25-0.255 range, the PER then was ard 5
ROE is consistently ard 20%
P/BV 0.9
Div yield (conservatively 1.8cebts) was about 7.2%
DCF is favorable, using discount factor of 6% over 20yrs

More importantly, although revenue has been decreasing over the past few yrs, profitability is maintained cos margins have been increasing
If u compare to peers, others have been sacrificing margins to secure projects
As a business owner myself, I can understand how hard it is to maintain your margins whilst others are undercutting you.
So kudos to the management team for that.
Already there are some civil engineering companies who have run into problems by operating on too thin margins.
Again, I wrote in an earlier post that HLS always protects their margins

Only mis step is their JV into residential property aka skywoods, which has not been doing well. Even then, their exposure is limited as there's a consortium. They also get business from the construction side.
Still not selling my 890lots at this price, though I've stopped queuing for more with the run up in price.

Hock lian seng just released VERY stellar results from FY14
Profit increased by over 200%
Dividend increased from 1.8 cents to 4.0 cents
As expected, huge jump in profits due to recognition of Ark industrial projects. Was expecting recognition in FY15 but apparently TOP was in FY14Q4
Very very good results
Share price likely to jump further tomorrow

Looks like the new "Activist fund" will likely profit handsomely

[BlueKelah]

being played this new year, moving up very fast to historical highs without any news.

Not that there's no news...
Hock lian seng's 2 industrial projects at kaki bukit and gambas are going to TOP soon
These 2 projects have "completed contracts" revenue recognition
In other words, the expenses are already recognized, but the revenue will only be recognized upon TOP
TOP is slated to be sometime early 2015

Upon TOP, HLS will recognize a big jump in revenue.
Both projects also have very good sales. One is 99% sold, the other is ard 75% sold.

(Vested)

would think that those TOPs are already factored into the price much like Weehur which did not jump much after their good Q3 results.

apparently they do not seem to have factored in yet. Maybe someone has leaked that there will be a big bonus dividend ang pow from HLS this year.

was considering vesting @.265 but the MOS was not enough yet.

Vested at 0.25-0.255
@ 0.25-0.255 range, the PER then was ard 5
ROE is consistently ard 20%
P/BV 0.9
Div yield (conservatively 1.8cebts) was about 7.2%
DCF is favorable, using discount factor of 6% over 20yrs

More importantly, although revenue has been decreasing over the past few yrs, profitability is maintained cos margins have been increasing
If u compare to peers, others have been sacrificing margins to secure projects
As a business owner myself, I can understand how hard it is to maintain your margins whilst others are undercutting you.
So kudos to the management team for that.
Already there are some civil engineering companies who have run into problems by operating on too thin margins.
Again, I wrote in an earlier post that HLS always protects their margins

Only mis step is their JV into residential property aka skywoods, which has not been doing well. Even then, their exposure is limited as there's a consortium. They also get business from the construction side.
Still not selling my 890lots at this price, though I've stopped queuing for more with the run up in price.

Hock lian seng just released VERY stellar results from FY14
Profit increased by over 200%
Dividend increased from 1.8 cents to 4.0 cents
As expected, huge jump in profits due to recognition of Ark industrial projects. Was expecting recognition in FY15 but apparently TOP was in FY14Q4
Very very good results
Share price likely to jump further tomorrow

Looks like the new "Activist fund" will likely profit handsomely

Congrats GFG on your successful foray into this counter.

Will you be starting to take profits or wait and see what the "activist fund" does? So far think they have only been buying in and not done much yet.

Also post TOP do you have any estimate of the possible EPS next year going forward?

[GFG]

Not that there's no news...
Hock lian seng's 2 industrial projects at kaki bukit and gambas are going to TOP soon
These 2 projects have "completed contracts" revenue recognition
In other words, the expenses are already recognized, but the revenue will only be recognized upon TOP
TOP is slated to be sometime early 2015

Upon TOP, HLS will recognize a big jump in revenue.
Both projects also have very good sales. One is 99% sold, the other is ard 75% sold.

(Vested)

would think that those TOPs are already factored into the price much like Weehur which did not jump much after their good Q3 results.

apparently they do not seem to have factored in yet. Maybe someone has leaked that there will be a big bonus dividend ang pow from HLS this year.

was considering vesting @.265 but the MOS was not enough yet.

Vested at 0.25-0.255
@ 0.25-0.255 range, the PER then was ard 5
ROE is consistently ard 20%
P/BV 0.9
Div yield (conservatively 1.8cebts) was about 7.2%
DCF is favorable, using discount factor of 6% over 20yrs

More importantly, although revenue has been decreasing over the past few yrs, profitability is maintained cos margins have been increasing
If u compare to peers, others have been sacrificing margins to secure projects
As a business owner myself, I can understand how hard it is to maintain your margins whilst others are undercutting you.
So kudos to the management team for that.
Already there are some civil engineering companies who have run into problems by operating on too thin margins.
Again, I wrote in an earlier post that HLS always protects their margins

Only mis step is their JV into residential property aka skywoods, which has not been doing well. Even then, their exposure is limited as there's a consortium. They also get business from the construction side.
Still not selling my 890lots at this price, though I've stopped queuing for more with the run up in price.

Hock lian seng just released VERY stellar results from FY14
Profit increased by over 200%
Dividend increased from 1.8 cents to 4.0 cents
As expected, huge jump in profits due to recognition of Ark industrial projects. Was expecting recognition in FY15 but apparently TOP was in FY14Q4
Very very good results
Share price likely to jump further tomorrow

Looks like the new "Activist fund" will likely profit handsomely

Congrats GFG on your successful foray into this counter.

Will you be starting to take profits or wait and see what the "activist fund" does? So far think they have only been buying in and not done much yet.

Also post TOP do you have any estimate of the possible EPS next year going forward?

Still not taking profits yet. Depends on whether the prices go on to crazy levels. Based on the latest results, now it is still slightly below book value. I have some knowledge about civil engineering and construction companies as many of my investments over the years are in this sector and the net margins for HLS are consistently way higher than the norm. Surely that can't warrant a close to BV valuation
What impressed me most is the fact that management protected their margins a few years back when the big foreign companies came n undercut the market. It's always easier to compete on price than to protect margins.

Haven't looked at latest financials in detail, of course I don't think 2015 is going to show similar stellar results, but just based on the contracts on hand, EPS will likely be within the same range as previous years (except FY14)
Most of the other projects are in the initial phase so there's no profit recognition at that stage

Now the activist fund... Just speculating here but my personal opinion is that they prob know some information that the general public doesn't. I note that one of the advisors, Winstedt Chong, is a prominent director in many public n private companies and he was convicted of share manipulation and insider trading more than a decade ago. The newly set up fund puts in 4mil of their tiny 5mil funds, and states that they want to make sure management returns excess cash to SH. A 4mil stake accounting for 2.7% of the company, wants to be an activist and move a 250mil market cap company? And dividend unexpectedly increases by more than 100%?
I don't think they are true "activists", neither do I believe he has invested simply because they saw value... Just 5 weeks before the release of unusually stellar results

[GFG]

hls AR released.
Point to note: Ark@KB TOP in March 2015.
That development is 100% sold.
Think FY15Q1 will show a huge jump in profit again due to recognition of Ark@KB upon TOP.

<vested>

[GFG]

hls AR released.
Point to note: Ark@KB TOP in March 2015.
That development is 100% sold.
Think FY15Q1 will show a huge jump in profit again due to recognition of Ark@KB upon TOP.

<vested>

HOCK LIAN SENG POSTS STRONG FIRST QUARTER
ON PROPERTY PROJECT COMPLETION
 Reported revenue of S$ 103.9 million and profit after taxation of S$ 18.6 million for the first quarter
 Ark@KB received its TOP in March 2015 and has sold out all its units
 Going forward, the focus is on tendering for large scale civil engineering projects and opportunities in property development




As expected, very strong 1st quarter 2015 with recognition of profits from Ark@KB.
KB is a smaller project than Gambas so I don't expect 2015 to be as good as last year. Still, this current quarter alone EPS is already close to the FULL YEAR profit of earlier years (2013,2012)
Long term debt incurred has been paid off in FY14Q4
Prudent and experience management.
I am expecting a strong 2015, and dividend for 2015 to be at least 2 cents or more. (>2012,2013 but <2014)
After 2015, 2016 should be taken care of by the current ongoing projects: Skywoods condo TOP, changi airport development etc should be mature by then