INTERVIEW - Singapore's CSC Holdings eyes Indian, Vietnamese markets

6/8/2007 1:25:00 PM

SINGAPORE (XFN-ASIA) - CSC Holdings Ltd, a building foundation specialist, is looking at opportunities in India and Vietnam because it expects these two countries to accelerate their investment in infrastructure in the next few years, CSC president and group chief executive See Yen Tarn said.

See told XFN-Asia in an interview that setting its sights on opportunities overseas should give the group balanced growth in the future, should the construction boom here falter -- although at this stage it was likely that the boom would continue.

"We have a clear visibility in the domestic market in the next 3-5 years," See said.

The construction industry here is busy building casino resorts at Marina Bay and on Sentosa island, new shopping malls on Orchard Road, the Marina Bay Financial Centre and upmarket residential condominiums in and around the central business district.

CSC's latest results reflect the industry's rapid growth. In the financial year ended March, CSC's net profit surged 127.6 pct to 8.6 mln sgd as revenue rose 18.1 pct to 126.7 mln sgd and net profit margins widened to 7.3 pct from 4.1 pct. Growth in the next few years will be underpinned by the group's order book, worth about 380 mln sgd, which includes a 240 mln sgd contract secured by CSC's wholly-owned subsidiary L&M Foundation Specialist Pte Ltd with the Marina Bay Sands casino resort.

See said CSC's capacity was almost fully utilized now, given that Marina Bay Sands, which opens in 2009, and other projects here will keep the group busy in the next few years. See said that he would focus on finishing projects already in the pipeline rather than go after new projects vigorously. "We should be able to secure a few more jobs, but we do have capacity constraints," See said.

The tight supply of specialized construction equipment and labor are among these constraints. See said his company would begin taking opportunities abroad only next year or after. He believes the next construction booms will be in India and Vietnam, because both countries have under-invested in infrastructure and the economic growth there in the past few years has put a strain on infrastructure.

He reckons CSC will be able to seize opportunities in Malaysia much more quickly than in Vietnam or India because it already has a foothold in Malaysia. In March 2006, CSC bought G-Pile Sistem Sdn Bhd, a Malaysian provider of hydraulic jack-in piling services. "G-Pile will be our platform to expand into Malaysia," See said.

There are also a number of infrastructure and property projects in Malaysia, notably the plan to transform the Iskandar Development Region in the southern state of Johor into an industrial and tourism hub.

(1 usd = 1.53 sgd)
jonathan.burgos@xfn.com

May 21 2007 - Win Marina Bay Sands IR Project

Very promising development by CSC! The winning of this $240m project is going to boost CSC's fundamental significantly in FY0708. Latest market rumors speculating CSC may have chance to win Sentosa IR project as well. If it does get it, CSC will establish itself as a solid and reputed construction company in Singapore and it will become my mid-term investment stock (2-3 years) or be my long-term stock if CSC keeps delivering good results in the next couple of years.


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INTEGRATED RESORTS PROJECT AT MARINA BAY

The Board of Directors (“The Board”) of CSC Holdings Limited (the “Company”) wishes to announce that its wholly owned subsidiary, L&M Foundation Specialist Pte Ltd has been awarded a contract by Marina Bay Sands Pte Ltd for the Marina Bay Sands Integrated Resort Development, Package 2220 – Construction Contract for Piling and Diaphragm Walls (Podium North).

This contract sum is approximately $240 million. Works are scheduled to commence in June
2007 and expected to be completed in February 2008.

This contract is expected to contribute positively to the financial results of the Company and
its subsidiaries for the current financial year.

None of the directors or substantial shareholders of the Company has any interest, direct or
indirect, in the above contracts.

By Order of the Board
Lee Quang Loong
Company Secretary

Date : 21 May 2007

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CSC price chart

The below chart shows the 2 years (from June 2005 - June 2007) stock price movement of CSC.