Hock Lian Seng

[stockify]

The business of HLS looks good. But how are they doing financially?

HLS Financial Analysis

[Stocker]

Is the industrial project in Tuas receiving good response with situation of over supply ?

[cfa]

Is the industrial project in Tuas receiving good response with situation of  over supply ?

Revenue increased by 77% to $151.7 million, contributed mainly from the much higher construction activities for the Joint Venture Changi Airport project. [b]Revenue of $4.3 million was recognized for Property Development in relation to the sales of units at Shine@TuasSouth. About 5% of the units at Shine@TuasSouth were sold as at 30 September 2018. Rental income from Investment properties remained insignificant.[/b]

Gross profit increased by $4.3 million (+49%) to $13.2 million mainly due to the higher revenue from the Civil Engineering segment. Gross margin for the ongoing projects was lower for the current financial period. [b]No contribution of gross profit from Property development segment despite of sales recognition , as the Shine@TuasSouth project is not expected to be profitable due to current subdue market conditions.
[/b]

[cfa]

This might not be another profitable development due to recent change of development rule by URA ?

http://infopub.sgx.com/FileOpen/Award%20...eID=506300



AWARD OF TENDER FOR RESIDENTIAL SITE AT MATTAR ROAD AND INCREASED IN PAID-UP  CAPITAL OF FSKH DEVELOPMENT PTE. LTD. ____________________________________________________________________________________
 
 
The Board of Directors of Hock Lian Seng Holdings Limited (the “Company” and together with its subsidiaries, the “Group”) is pleased to announce that its 45% owned joint venture company, FSKH Development Pte. Ltd. (“FSKH”), has been awarded the tender by the Urban Redevelopment Authority (“URA”) for a residential site at Mattar Road (the “Site”) at the tender price of S$223,019,000 on 17 May 2018.   
The Site, which is under a 99-year lease, has a site area of 6,230.2 square metres with a maximum gross floor area (GFA) of 18,691 square metres. It can yield an estimated 250 units. The Site is located beside Mattar MRT station and within proximity of the commercial cluster at Paya Lebar.
The paid-up capital of FSKH has been increased to S$1,000,000 and the shareholders structure remain unchanged as per our announcement dated 11 April 2018.
The Group will fund its share of the cost of acquisition of the Site and intended development by internal resources and bank borrowings.
The acquisition of the Site by FSKH is not expected to have a material impact on the Group’s net tangible assets and earnings per share for the financial year ending 31 December 2018.
None of the directors or controlling shareholders has any interest, direct or indirect, in the Joint Venture or development of the Site, save for their shareholdings in the Company.
 
BY ORDER OF THE BOARD  
 
 
Chew Kok Liang Company Secretary
 
Date: 17 May 2018

[¯|_(ツ)_/¯]

HLS@24
1HFY2021 Result
https://links.sgx.com/FileOpen/Financial...eID=677305


https://drive.google.com/open?id=1hBkj9S...rUjB42LjIF

Stay home and stay safe, everyone.

[BigFatWhale]

Riding the Recovery of the Construction Sector- Hock Lian Seng

With Covid 19 causing huge disruption to the economy, the construction sector was especially affected given the migrant workers’ high infection rate. But, things are starting to look brighter, with the government getting things back to normalcy. With the live with the covid directive, most migrant workers will be able to go back to work as long as they get vaccinated.



Given the BCA guidance, things are starting to be turning up based on the contracts awarded. You could find the latest Building and Construction Authority forecast appended below. This could be due to pent up demand, given news of BTO delays. Moreover, the government’s initiative to boost up infrastructure spending to jumpstart the economy post covid would also provide a further tailwind.



Giving some context, the total contracts awarded in 2019 was in the region of 33 billion. The general forecasted contracts from 2014 to 2019 was also higher than the current forecasted contract values for the next few years.

But, things are moving rapidly and any forecast could be derailed or even surpassed. Nonetheless, one thing is for sure, the figures are likely going to be higher than 2020 which bear the full brunt of the pandemic.



Also, the trump card would be the contracts for Changi Airport Terminal 5 and the Integrated Resorts expansion, which have been excluded from the forecast.



Click Here to Read More:



https://thebigfatwhale.com/riding-the-re...lian-seng/

[¯|_(ツ)_/¯]

hls@24

in normal situation, a healthy (or strong) order books, if managed properly, will produce good result (revenue, profits, cashflow, etc).

take a step back and assess the current situation, I couldn't felt that a strong order books, especially if hls couldn't deliver within the stipulated contractual timeline, would not only pull it's result down (revenue, profit, cashflow, etc) but also impact it's reputation and future chance to clinch more projects/contracts.

I do however think that hls management team would had gauged properly before they bid for more projects. yes, I do.  however, my concern is whether their buffers is enough.

plus, whether luck is on their side, with so many projects to be deliver now.

Stay safe and keep healthy everyone.

[ksir]

At price S$0.25, HLS has market cap of around S$128M.
Its net cash is about S$129M.
There are also below assets:
* Securities (listed equities & corp bonds) S$26M.
* JV S$25M (the fully sold Antares condo project).

* Development Properties S$78M.
* Contract Assets S$40M.
* Trade receivables S$11M.

Total Liabilities S$100M.
If we knock off the Development Properties, Contract Assets & Receivables with Total Liabilites, we left with S$180M as compared to S$128M market cap.
Good enough Margin of Safety?

On going projects mainly won on Nov-2021 (S$320M) & Jan-2022 (S$454M).
Those are won after Covid stabilised and hopefully they have sufficient time to factor in the higher labor cost.

<vested>

[weijian]

hi ksir,

Tracking back HLS's thread, the company had its heydays back in the mid 2010s. However towards the end of 2010s decade, its GPM seems to have reduced from ~20-30% to 10% now. What has materially changed?

The heydays of mid 2010s crescendo-ed at end FY16, when it declared a 10cent special dividend (~30% yield when including the normal final dividend of 2.5cent, based on share price back then). Back in FY16, it had cash/securities (205mil + 30mil) = 235mil, which is almost similar to its equity (245mil) and much much in excess of working capital requirements of 13mil (WIP/receivables/development properties - payables/billings = 8+72+13-50-30 = 13mil).

Looking at 1H23, it has cash/securities 155mil, about 63% of equity and working capital requirements ~60mil...While it didn't look as complying as FY16, but HLS still seems to have a lot of "excess" cash. What would actually warrant the Chua Family to pay out a bumper dividend again?

[ksir]

hi ksir,

Tracking back HLS's thread, the company had its heydays back in the mid 2010s. However towards the end of 2010s decade, its GPM seems to have reduced from ~20-30% to 10% now. What has materially changed?

The heydays of mid 2010s crescendo-ed at end FY16, when it declared a 10cent special dividend (~30% yield when including the normal final dividend of 2.5cent, based on share price back then). Back in FY16, it had cash/securities (205mil + 30mil) = 235mil, which is almost similar to its equity (245mil) and much much in excess of working capital requirements of 13mil (WIP/receivables/development properties - payables/billings = 8+72+13-50-30 = 13mil).

Looking at 1H23, it has cash/securities 155mil, about 63% of equity and working capital requirements ~60mil...While it didn't look as complying as FY16, but HLS still seems to have a lot of "excess" cash. What would actually warrant the Chua Family to pay out a bumper dividend again?

Hi Weijian,

It I were the Chua Family, I'd just give it a (perhaps NOT too low) ball offer and keep the cash for myself   
It's no wonder that there are so many low balls in Spore Exchange universe, it's not super hard to find unloved and undervalued companies with good long term earning & dividend records.

Also I'd argue that the CASH is now worth more than it was back then in 2016.
Mainly because it earns a lot more interest without much risk.