Wow, looks like everyone is looking at the juicy construction counter rather than the boring roadworks counter. haha.
(02-01-2011, 12:25 PM)yeokiwi Wrote: Wow, vader1671, that's a very detailed analysis.
For LKH, there are other pts to take note.
1) 40% stake in Minton Rise. Kheng Leong and LKH acquired the land at very low cost.
2) undervalued assets. Duxton hotel group.
The Low family had spent quite some money early this year taking over GCB and GCB held more than 50% of LKH.
I thought they must have pretty good confidence in value of LKH.
I must be honest, I only used LKH because it seemed like a company with a market cap equal to CES. I cannot much since I didn't delve into the report's details, but going by the numbers LKH looks like a solid ROE 15% company, which is more than respectable, but I was looking for a little more and found CES.
(02-01-2011, 08:57 PM)ngcheeki Wrote: (02-01-2011, 02:18 AM)vader1671 Wrote: 8) NAV
The company is trading at NAV so I don’t believe that it is not too expensive. It’s a bit difficult to find a good construction counter trading below NAV.
Thank you for your detailed analysis on CES and LKH. As for construction
companies trading below NAV you might like to take a look at Lum Chang, KSH and Koh brothers.
I'm vested in KSH because of the dividend yield which is closed to 8% as well as the current price (25 cents) which is trading below its NAV of (34.95 cents).
My main concern about the company is their falling order book which is currently at S$243 millions. Hopefully, the company is able to secure more orders this year from their old customers such as Lippo Group or Ho Bee as well as their own property project (cityscape).
I've taken a look at Koon which has heart stopping swings of ROE over the years (too much for my poor heart). KSH had solid numbers but didn't make my initial filter due to ROE hovering around 15% (which is very good, but I was looking at > 20%) but it is trading below NAV which makes me wonder. When I have the time, I think I'll take a look, thanks for the suggestion.
(02-01-2011, 10:17 PM)barista Wrote: Hi Vader,
thanks for the information on the various construction companies.
competition:
although barriers to entry are high, their actual competitiors are the foreign chinese construction co.(some even dabble in property development locally) and some unlisted local construction co. you may want to check GEBIZ(where information on bids/tender price are easily availble for each project).
profit margin:
i wonder if they can sustain. i could be wrong, but my memory seems to suggest it's only recent years that we see reports of >10mil profit from construction companies.
sorry still can't get over past failures like wee poh, chew eu hock and the likes. maybe they got killed when hdb stop building program?
Thanks for the info on GEBIZ, I'll certainly take a look at it. I find it difficult to understand why some companies make it such a chore for investors to find such important information.
I never did actually consider foreign entry, but you're right, that's a quick way to get entry into the Singapore market. However, aren't there some certifications required and some track record that you need to build up to really begin entrenching yourself? How long would a foreign entrant take to build up the necessary base? I'm not too familiar with that, unfortunately. So much to learn...
I was not around (well I was, but quite young) during the 1997 collapse. What happened? Perhaps we can use that information to determine whether history will repeat itself for these new companies. CES and LKH has a good amount of cash reserves which should see them survive a blip or two, but I do wonder if they can survive something like what you mention.
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