Construction counters

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#11
Having gone up 50% since end-Aug, Koon has proven to be another value investor's dream. It only shows the counter was so very under-priced when it was 'kooning'! Apart from the company's large cash reserve, the recently announced $6.6m profit from the proposed sales of an industrial property and vessels to ASL have also confirmed there are hidden value in Koon's fixed assets....
http://info.sgx.com/webcoranncatth.nsf/V...C0019A92B/$file/KNHPropertyANDvesselsale28Sept2010.pdf?openelement

Based on the last done price of $0.60 and the only 81.99m issued shares, Koon's market cap now still stands at only $49.19m.
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#12
Hock Lian Seng's net cash almost same as mkt cap n book contract is almost 3 times mkt cap. Hope it clinches more contract n that should be a catalyst for the share price. IMHO, i think construction stocks are not very good investment, at least for me.

my 1 cent worth.

cheers,
bongster31

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#13
(20-10-2010, 11:40 PM)bongster31 Wrote: Hock Lian Seng's net cash almost same as mkt cap n book contract is almost 3 times mkt cap.

Based on the last done price of $0.31 and Hock Lian Seng's rather huge 509.98m issued shares, market cap is now $158.09m - or 2.04x BV of Equity of $77.54m as at 30Jun10....
http://www.hlsgroup.com.sg/announcements...813(2).pdf

I guess we must view Hock Lian Seng's 'bloated' net cash position of $149.9m (as at 30Jun10) in conjunction with the large balances of trade/other payables and progress billings in excess of WIP, which totalled $107.37m.
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#14
Those who are interested to find out more about Koon can take advantage of the coming meet-the-management session cum plant visit scheduled for 11Dec10 (Sat) being organized by NextInsight.....
http://nextinsight.net/index.php/compone...1&Itemid=1
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#15
thanks i just booked myself a place for Koon's site visit..feeling so excited now
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#16
Sharing some key points of the Koon visit last Sat 11 Dec. This was supposed to be a more detailed post...unfortunately I clicked a wrong button and lost what I'd typed Angry, and now too lazy to re-type everything. So here goes:

1. New growth drivers

- Apart from the traditional reclamation and civil engineering business they specialise in, Koon is branching into the energy market (in Australia) and pre-cast business through acquisitions. With their large cash hoard, company is still on the lookout for more opportunities both locally and overseas.

- Pre-cast business looks promising over next 2 years with HDB's plans to build more public housing. The new Contech and Econ yards, combined with existing yard in Johor, now make Koon the largest pre-cast player in Singapore - at least double or triple in terms of production capacity compared to their competitors. Locally the other 8 to 9 large pre-cast yards are already running at full capacity, whereas Koon's utilization rate only stands at 20% (with their current $34m order book). This suggests that we can possibly expect more contract wins coming up in the next few quarters, since the other companies may not be bidding as aggressively for the HDB and private sector jobs.

2. Business and management undergoing transformation

- The management team was candid and open to sharing on their business and the direction that the company was heading.

- The CEO, Tan Thiam Hee joined Koon in 2008 and brings with him more than 15 years experiences from various industries. Before joining the Company, Thiam Hee was with the Haw Par Corporation Limited as its Group Financial Controller and Company Secretary and held similar positions in ASL Marine Holdings Ltd before that.

- Evidence that the once "kooning" Koon has woken up and is now undergoing an exciting phase of transformation and growth under the capable stewardship of Thiam Hee and his management team, include the synergistic move into the pre-cast industry at the right time, the US$160m foray into the Vietnamese port project, improving profit margins through restructuring and operational cost-cutting mesures.

3. Solid financials and balance sheet

- With their latest $45.7m project win announced on 8 Dec, and more wins likely to come, the operating cash flows is likely to remain strong, which would be potential rerating catalysts to the share price.

- At the existing share price of $0.63, the forward PER is only 2.76 (based on annualised EPS of $0.228 comprising profit of $0.081 from sale of property and marine vessels; and annualising half year profits of $0.0735).

- This is not forgetting the net cash per share at $0.44, as mentioned by yeokiwi-san in previous posting. Hopefully the company would be distributing some special dividends to reward shareholders from this large cash hoard, if they are not able to spot any earnings accretive opportunities!!! This would be a good angpow for the coming CNY! Big Grin
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#17
Hi Ichiran,

Just browsing through the threads when I saw what you typed. A little OT here, but if I want to type a LONG POST, I usually do it on Word doc first so I can save, edit and amend. Once I finish, I just copy/paste the whole chunk into the reply window! That will save you a lot of heartache!

Will read what you wrote in detail later tonight, kinda busy now haha. Big Grin
My Value Investing Blog: http://sgmusicwhiz.blogspot.com/
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#18
Hi Ichiran,

Thanks for sharing your views about Koon and the latest Management visit. I will take a look at its finances tonight. Looks pretty interesting with a few contract wins recently. Its primary listing is in ASX ?
Disclaimer: Please feel free to correct any error in my post. I am not liable for anything. Do your own research and analysis. I do NOT give buy or sell calls and stock tips. Buy and sell at your risk. I am not a qualified financial adviser so I do not give any advice. The postings reflects my own personal thoughts which may or may not be accurate.
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#19
Hi Nick,

Yes the primary listing is in ASX. Thiam Hee shared that the reason for the ASX listing was due to some technical reasons which I cannot really recall now. Sigh! Old liao...memory failing me. Tongue

He revealed that they also explored delisting from ASX but the cost would come up to more than $1m! So they shelved the idea.
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#20
(14-12-2010, 06:32 PM)ichiran Wrote: - At the existing share price of $0.63, the forward PER is only 2.76 (based on annualised EPS of $0.228 comprising profit of $0.081 from sale of property and marine vessels; and annualising half year profits of $0.0735).

When divided by the existing 81.994m issued shares (before adjusting for the pending 1-for-1 bonus), the $14.63m sale proceeds and $6.6m gain from the sale of certain fixed assts to ASL Marine will add $0.178/share to nett cash, and $0.08/share to EPS for FY10. As this gain is one-off, it should not be included as part of NP earned (or EPS) from Koon's operating businesses, before applying an appropriate PER to value a Koon share.

Do also be aware that Koon's H1-FY10's NP of $6.029m included a $1.678m one-off gain (related to the purchase of a 75% equity interest in Econ Precast, at a price which was lower than the BV of the acquired assets). Excluding this, Koon's adjusted NP for H1-FY10 is $4.351m, which will translate to a smaller EPS of $0.053, or an annualized EPS of $0.106.
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