早报 财经 狮城财经 2007-08-30
李韵琳
"股市金手指"黄鸿年认为，近期的股市还会大幅波动，预料一波会比一波低，海指可能在年底调整到至少2500点，劝股民应加倍谨慎小心。
本地股市近期随着环球股市坐过山车，七上八下的股市搞得股民进退两难，人人都在寻找一个明确的投资方向。在股市颇有眼光，所触及的公司股价往往直线上扬的黄鸿年昨天告诉本报，股市的大震荡可追究美国次贷(subprime)、基金撤退资金和信贷紧缩的问题，使市场信心受打击，而接下来问题还可能会持续加深。
他认为，这轮调整还未见底，虽然时不时会见股市回弹，但只是昙花一现，股民应该见好就收，手握现金比较有保障。
黄鸿年说："市场的惊慌情绪像传染病一样，尽管新加坡经济的基本面良好，但还是无法对外在因素和环球股市的跌势免疫。这一轮调整还没结束。接下来虽然会有回光反照的时候，但只是昙花一现。我认为，海指至少会调整至2500点，如果美国处理的不好的话，搞不好还可能跌至2000点。"
美国人在资产膨胀产生的富裕错觉下一再贷款消费被黄鸿年点为问题的根本。而始于两年多前的这个现象，在日积月累下形成今日的信贷紧缩和债务担保凭证(CDO)问题。股市狂泻则可追究到受影响的对冲和私募基金。它们为了应付问题大量从市场撤退资金。
就因为如此，黄鸿年建议那些认为股市猛跌时是进场捡便宜好时机的股民不要轻举妄动。
"小股民现在进场就等于在喂对冲和私募基金。喂饱了，它们就会睡觉或随时把你推下去。你可能今天买得比昨天便宜，但相比明天就可能买贵了。以目前的情况来看，抱着现金睡觉会比较好。"
他向股民进言："留得青山在，不怕没柴烧"。
过去三个月，黄鸿年除了脱售超级咖啡和中国医疗保健(China Healthcare)的全部股权，也减持均富集团(E- quation)和再循环业者盛隆环保(Centillion En- vironment)的股权。 中国经济股市 还是有许多隐忧
至于他近期的投资，黄鸿年透露，过去几个月主要吸购政府债券。他也认为货币是很稳的投资，并看好人民币值还会继续上扬。
谈到人民币，他再次警告，中国经济和股市还是有许多隐忧。"看一看中国的股票，本益比达到50、60倍，即使跌剩一半，还是太贵了。"
对于随着股市水涨船高的本地房地产市场，黄鸿年观察到，一年多来热火朝天地的房地产市场近几个星期来似乎已开始静下来，有行无市，并相信接下来还会随着股市的调整进一步后退。
他也表示，一些已为新推出的高档公寓项目付了定金的外国基金，可能会因为资金紧缩的问题，而选择放弃执行任购权。
Thursday, August 30, 2007
Sunday, August 26, 2007
Mid-East funds set to pump billions of dollars into IDR - BT reports
Article reported from today's BT(25/08/07). we can smell that mid-east big money is swamping in johor IDR for real as infrastructure and construction demands there are accelerating! CSC armed with its m'sian units G-Pile and L&M Ground Engineering will obviously be benefited from this ongoing development. company CEO once mentioned early in an interview that CSC will be able to seize opportunities in m'sia much more quicker than other countries in the region. barring any unpredictable crisis, i always believe CSC has a rosy turnaround story in the making by riding on the current construction boom cycle. so let's sit and wait how successfully CSC executes its biz plans in near future!!
Business Times - 25 Aug 2007
Mid-East funds set to pump billions of dollars into IDR Announcements expected over next two to three weeks: report
(PETALING JAYA) Middle East investors are set to make their biggest investments in Malaysia so far in the Iskandar Development Region (IDR), The StarBiz reported, citing industry sources.
It quoted the sources as saying that it will be a major move that will transform the IDR and more than kickstart the region as a serious development.
In the past, Middle East investments in Malaysia have been generally below US$1 billion each (except for the US$3 billion Saudi Telekom deal with Binariang). This time, it is believed, billions of dollars will be poured into the IDR.
Over the next two to three weeks, major announcements are expected from some of the biggest funds in the world that are holding billions of dollars of oil money. Among these funds, the Abu Dhabi Investment Agency alone has investment assets exceeding US$500 billion. The agency is jointly owned by Abu Dhabi Investment Council and the National Bank of Abu Dhabi.
The sectors that these investors are eyeing include infrastructure, banking, property, logistics, construction, engineering, tourism, hotels, theme parks and convention centres.
'It looks like a sea change in the mindset of the Middle East investors towards South-east Asia,' said a senior analyst.
Malaysia and Singapore appear to be among the favourite destinations of these investors as both countries have pull factors such as an efficient workforce and good infrastructure and banking facilities.
In south Johor, land is considered still cheap and these investors will be buying in a big way, the report said.
With the first mover advantage, these investors are expected to return to the Middle East and secure partners for the projects. It would not come as a surprise if a Middle Eastern enclave is formed in the commercial centre of south Johor, the newspaper added.
StarBiz recently reported that the takeover of Putrajaya Perdana Bhd by a consortium of Middle Eastern, Malaysian and Singapore investors was a prelude to further acquisitions in corporate Malaysia.
Talk is that the new Middle Eastern owners of Putrajaya Perdana will buy more construction companies in Malaysia, with the first expected within 60 days.
The companies will be bought in stages and later merged with Putrajaya Perdana for the latter to have sufficient scale to take on jobs not only in this region but also in the Middle East.
'This would be the first step in our larger plan of creating a global construction giant to capitalise on the increasing demand for construction firms globally, especially in the GCC (Gulf Cooperation Council),' Sheikh Sabah Mohd S Al-Sabah, a member of Kuwait's ruling Al-Sabah family, said in a statement announcing the takeover.
A controlling and majority stake in Putrajaya Perdana is being bought for RM390 million (S$170.6 million) in cash by Swan Symphony Sdn Bhd, a special-purpose vehicle owned by the Abu Dhabi-Kuwait-Malaysia Investment Corp and Autron Investment, a subsidiary of Singapore and Australian-listed Autron Corp Ltd.
Business Times - 25 Aug 2007
Mid-East funds set to pump billions of dollars into IDR Announcements expected over next two to three weeks: report
(PETALING JAYA) Middle East investors are set to make their biggest investments in Malaysia so far in the Iskandar Development Region (IDR), The StarBiz reported, citing industry sources.
It quoted the sources as saying that it will be a major move that will transform the IDR and more than kickstart the region as a serious development.
In the past, Middle East investments in Malaysia have been generally below US$1 billion each (except for the US$3 billion Saudi Telekom deal with Binariang). This time, it is believed, billions of dollars will be poured into the IDR.
Over the next two to three weeks, major announcements are expected from some of the biggest funds in the world that are holding billions of dollars of oil money. Among these funds, the Abu Dhabi Investment Agency alone has investment assets exceeding US$500 billion. The agency is jointly owned by Abu Dhabi Investment Council and the National Bank of Abu Dhabi.
The sectors that these investors are eyeing include infrastructure, banking, property, logistics, construction, engineering, tourism, hotels, theme parks and convention centres.
'It looks like a sea change in the mindset of the Middle East investors towards South-east Asia,' said a senior analyst.
Malaysia and Singapore appear to be among the favourite destinations of these investors as both countries have pull factors such as an efficient workforce and good infrastructure and banking facilities.
In south Johor, land is considered still cheap and these investors will be buying in a big way, the report said.
With the first mover advantage, these investors are expected to return to the Middle East and secure partners for the projects. It would not come as a surprise if a Middle Eastern enclave is formed in the commercial centre of south Johor, the newspaper added.
StarBiz recently reported that the takeover of Putrajaya Perdana Bhd by a consortium of Middle Eastern, Malaysian and Singapore investors was a prelude to further acquisitions in corporate Malaysia.
Talk is that the new Middle Eastern owners of Putrajaya Perdana will buy more construction companies in Malaysia, with the first expected within 60 days.
The companies will be bought in stages and later merged with Putrajaya Perdana for the latter to have sufficient scale to take on jobs not only in this region but also in the Middle East.
'This would be the first step in our larger plan of creating a global construction giant to capitalise on the increasing demand for construction firms globally, especially in the GCC (Gulf Cooperation Council),' Sheikh Sabah Mohd S Al-Sabah, a member of Kuwait's ruling Al-Sabah family, said in a statement announcing the takeover.
A controlling and majority stake in Putrajaya Perdana is being bought for RM390 million (S$170.6 million) in cash by Swan Symphony Sdn Bhd, a special-purpose vehicle owned by the Abu Dhabi-Kuwait-Malaysia Investment Corp and Autron Investment, a subsidiary of Singapore and Australian-listed Autron Corp Ltd.
Sunday, August 12, 2007
CSC chart update: Aug06 - Aug07
Starting from 27 Jul 2007, global markets selldown due to the contagious effect from the US sub-prime mortgage and credit tightening.
CSC support at 0.30 seems very strong, it was tested on STI heavy selloff dated on 6 aug (-127 pts) and 10 aug (-54 pts). At 0.3 - 0.35 is the price range in May07 prior to the announcement of Sands IR $240m contract win so this price range should be considered a good buy level. Also at 0.31, it is way below 100dMA which indicates the rebounce from this level will be very strong when in the time CSC share in recovering mode.
From the chart on 3-10 aug,
- MACD histogram moving towards the centreline showing sign of buy signal.
- MACD line (blue) is look set to cross the signal line (red) showing another buy signal.
- RSI 14d at 23% (below 30%) indicates stock in over-sold region => buyers not in yet.
- Wm% 9d at -90% (below -80%) indicates stock in over-sold region => buyers not in yet.
Saturday, August 11, 2007
MTI Press Release on 2Q2007 - Construction
Improved Outlook for 2007
As Growth Broadens and Economy Diversifies
10, August, 2007.
The Ministry of Trade and Industry announced today that the economy is expected to grow by 7.0-8.0 per cent in 2007, riding on the momentum of the second quarter and supported by a favourable external environment and broad-based growth across the major sectors.
The construction sector grew by 18 per cent, the strongest growth in almost 10 years. Private construction was supported by robust growth in the residential, commercial and industrial segments while public construction was led by housing projects.
Outlook for 2007
The Ministry of Trade and Industry has raised the full-year GDP growth forecast for 2007 from 5.0-7.0 per cent to 7.0-8.0 per cent, taking into account a healthy external environment, the broad-based growth momentum across major sectors, continued growth in the composite leading index and strong business expectations.
The global economic environment continues to be healthy. Growth in the US has moderated but remains intact in the face of problems in the sub-prime credit markets. The Japanese and EU economies continue to recover on the back of strong domestic demand and firm business sentiment. Prospects in Asia remain robust, with the Chinese economy growing at a rapid pace.
The chief downside risk to this favourable external outlook is the potential for current problems in US credit markets spreading to other financial markets and possibly dragging down consumption and investment.
From a sectoral perspective, growth in financial and business services, manufacturing, and construction is expected to be higher than earlier envisaged. The driving factors underpinning this higher growth are broad-based: strong global demand in the biomedical, aerospace and marine industries, robust regional demand for financial services, and a buoyant domestic property market and construction industry with a steady pipeline of contracts awarded. The latest surveys of business expectations show that both manufacturing and services firms expect better business conditions in the coming half of the year.
THE CONSTRUCTION SECTOR expanded by 18% in 2Q07, its strongest growth since 3Q97. Growth momentum was robust, at 15%. Certified payments increased by 18% in 2Q07, supported by strong growth in the private residential, commercial and industrial segments as well as public residential segment. Contracts awarded increased 55% in 2Q07, due mainly to the rise in the private commercial and public institutional segments.
As Growth Broadens and Economy Diversifies
10, August, 2007.
The Ministry of Trade and Industry announced today that the economy is expected to grow by 7.0-8.0 per cent in 2007, riding on the momentum of the second quarter and supported by a favourable external environment and broad-based growth across the major sectors.
The construction sector grew by 18 per cent, the strongest growth in almost 10 years. Private construction was supported by robust growth in the residential, commercial and industrial segments while public construction was led by housing projects.
Outlook for 2007
The Ministry of Trade and Industry has raised the full-year GDP growth forecast for 2007 from 5.0-7.0 per cent to 7.0-8.0 per cent, taking into account a healthy external environment, the broad-based growth momentum across major sectors, continued growth in the composite leading index and strong business expectations.
The global economic environment continues to be healthy. Growth in the US has moderated but remains intact in the face of problems in the sub-prime credit markets. The Japanese and EU economies continue to recover on the back of strong domestic demand and firm business sentiment. Prospects in Asia remain robust, with the Chinese economy growing at a rapid pace.
The chief downside risk to this favourable external outlook is the potential for current problems in US credit markets spreading to other financial markets and possibly dragging down consumption and investment.
From a sectoral perspective, growth in financial and business services, manufacturing, and construction is expected to be higher than earlier envisaged. The driving factors underpinning this higher growth are broad-based: strong global demand in the biomedical, aerospace and marine industries, robust regional demand for financial services, and a buoyant domestic property market and construction industry with a steady pipeline of contracts awarded. The latest surveys of business expectations show that both manufacturing and services firms expect better business conditions in the coming half of the year.
THE CONSTRUCTION SECTOR expanded by 18% in 2Q07, its strongest growth since 3Q97. Growth momentum was robust, at 15%. Certified payments increased by 18% in 2Q07, supported by strong growth in the private residential, commercial and industrial segments as well as public residential segment. Contracts awarded increased 55% in 2Q07, due mainly to the rise in the private commercial and public institutional segments.
Thursday, August 9, 2007
Tee International - Personal note
This stock is worth of a look. Below is the highlights of the company financials.
At $0.35 (div 2.7%, PE 15x) - valuation very attractive when compared to its peers.
HY0607 (out 24/07/07)
- rev: $59m (46m)-np: $2m (1m)
- eps: $0.0234-nav: $0.1322
- shares: 82,437,733
- div: $0.0094 (to be paid on 21/11/07)
FY0506 (300506)
- EPS: $0.0138 ($0.0111 FY0405)
- Issued shares: 70,768,675
- NAV: $0.1139 ($0.1091 FY0405)
Co info:
Biz in construction sector, rebuilding, M&E, recently into property development by setting up a property arm Tee Development, has been aggressively acquiring properties, co also team up with Rotary Engineering to bid for the Sands IR M&E contracts.
co updates:
- 23/05/07: private placement 16.3m shares to OCBC and HL finance. Shares now stands 99,629,400.
- shares at 31/07/07: 100,417,240
- Jul 07: Added acquisitions from Sixth Avenue and a prime residential property No. 257 to 261 Merlin Mansion at East Coast Road
- Thomas rd site luanch in Sept 07
- Cairnhill Circle and Rambai Road sites launch in between 4Q07-1H08
At $0.35 (div 2.7%, PE 15x) - valuation very attractive when compared to its peers.
HY0607 (out 24/07/07)
- rev: $59m (46m)-np: $2m (1m)
- eps: $0.0234-nav: $0.1322
- shares: 82,437,733
- div: $0.0094 (to be paid on 21/11/07)
FY0506 (300506)
- EPS: $0.0138 ($0.0111 FY0405)
- Issued shares: 70,768,675
- NAV: $0.1139 ($0.1091 FY0405)
Co info:
Biz in construction sector, rebuilding, M&E, recently into property development by setting up a property arm Tee Development, has been aggressively acquiring properties, co also team up with Rotary Engineering to bid for the Sands IR M&E contracts.
co updates:
- 23/05/07: private placement 16.3m shares to OCBC and HL finance. Shares now stands 99,629,400.
- shares at 31/07/07: 100,417,240
- Jul 07: Added acquisitions from Sixth Avenue and a prime residential property No. 257 to 261 Merlin Mansion at East Coast Road
- Thomas rd site luanch in Sept 07
- Cairnhill Circle and Rambai Road sites launch in between 4Q07-1H08
OCBC - TEE International - Building on strong earnings growth at $0.37
By Ritesh Menon Thu, 26 Jul 2007, 17:04:26 SGT
TEE International’s (TEE) revenue jumped 27.4% YoY to S$58.9m in FY07 and net profit rose by a strong 91.3% to S$2.0m in FY07. This was slightly higher than our forecasted net profit of S$1.8m. Property development and acquisition strategy is in full swing with further acquisitions at Sixth Avenue and a prime residential property Merlin Mansion at East Coast Road. TEE has declared 0.4 cents net dividend per share payable on 21st Nov 2007 if approved. We are raising FY08 net profit estimate to S$2.8m and our fair value estimate from 21 cents to 37 cents per dilutive share based on 15x FY08 PER. Recently, with the strong interest in construction and property stocks, TEE’s share price spiked up sharply, moving from S$0.265 cents on 2 July 07 to a recent high of S$0.59, or up a whopping 122.6%. As TEE has already exceeded our fair value estimate, we are downgrading TEE from a HOLD to a SELL.
FY07 results were slightly higher than forecasted. TEE International’s (TEE) revenue jumped 27.4% YoY to S$58.9m in FY07, which was close to our forecasted figure of S$59.2m. Gross profit remained healthy, rising 40.9% HoH in 2H07 which drove gross profit 24.7% YoY higher to S$7.8m in FY07, and this is in line with our forecast of S$7.7m. EBIT rose 60.8% and net profit jumped by a whopping 91.3% to S$2.0m, slightly higher than our forecasted net profit of S$1.8m.
Property development and acquisition strategy is in full swing. TEE continues its property acquisition strategy, adding on acquisitions from Sixth Avenue and a prime residential property No. 257 to 261 Merlin Mansion at East Coast Road on top of its prior acquisitions at Thomson Road, Cairnhill Circle and Rambai Road. TEE expects to fund 90% of these acquisitions through bank borrowings, as we have mentioned before, this could place a short-term strain on its operating cash flow. TEE intends to redevelop its property acquisitions into luxury apartments, which we expect would boost TEE’s earnings in FY08 and FY09.
Awarded construction project in Thailand. TEE’s group associate, Trans Equatorial Indochina Co, has received a letter of intent from Ananda Developments Co Ltd for the partnership to build at least 100 home units at Waikiki resort Thailand. Management guided that this contract was estimated to boost revenue by S$7m. TEE has not commented on the date of commencement and completion.
Strong growth outlook, but share price is over-valued. TEE has declared 0.4 cents net dividend per share payable on 21st Nov 2007. We are raising the FY08 net profit estimate to S$2.8m and our fair value estimate from 21 cents to 37 cents per dilutive share for FY08, based on 15x PER. With the recent strong interest in property and construction stocks, TEE’s share price spiked up a whopping 122.6% from S$0.265 on 2 July 07 to a recent high of S$0.59. As TEE has already exceeded our fair value estimate, we are downgrading TEE from a Hold to a SELL.
Please refer to the full report for more information and additional disclosures.
TEE International’s (TEE) revenue jumped 27.4% YoY to S$58.9m in FY07 and net profit rose by a strong 91.3% to S$2.0m in FY07. This was slightly higher than our forecasted net profit of S$1.8m. Property development and acquisition strategy is in full swing with further acquisitions at Sixth Avenue and a prime residential property Merlin Mansion at East Coast Road. TEE has declared 0.4 cents net dividend per share payable on 21st Nov 2007 if approved. We are raising FY08 net profit estimate to S$2.8m and our fair value estimate from 21 cents to 37 cents per dilutive share based on 15x FY08 PER. Recently, with the strong interest in construction and property stocks, TEE’s share price spiked up sharply, moving from S$0.265 cents on 2 July 07 to a recent high of S$0.59, or up a whopping 122.6%. As TEE has already exceeded our fair value estimate, we are downgrading TEE from a HOLD to a SELL.
FY07 results were slightly higher than forecasted. TEE International’s (TEE) revenue jumped 27.4% YoY to S$58.9m in FY07, which was close to our forecasted figure of S$59.2m. Gross profit remained healthy, rising 40.9% HoH in 2H07 which drove gross profit 24.7% YoY higher to S$7.8m in FY07, and this is in line with our forecast of S$7.7m. EBIT rose 60.8% and net profit jumped by a whopping 91.3% to S$2.0m, slightly higher than our forecasted net profit of S$1.8m.
Property development and acquisition strategy is in full swing. TEE continues its property acquisition strategy, adding on acquisitions from Sixth Avenue and a prime residential property No. 257 to 261 Merlin Mansion at East Coast Road on top of its prior acquisitions at Thomson Road, Cairnhill Circle and Rambai Road. TEE expects to fund 90% of these acquisitions through bank borrowings, as we have mentioned before, this could place a short-term strain on its operating cash flow. TEE intends to redevelop its property acquisitions into luxury apartments, which we expect would boost TEE’s earnings in FY08 and FY09.
Awarded construction project in Thailand. TEE’s group associate, Trans Equatorial Indochina Co, has received a letter of intent from Ananda Developments Co Ltd for the partnership to build at least 100 home units at Waikiki resort Thailand. Management guided that this contract was estimated to boost revenue by S$7m. TEE has not commented on the date of commencement and completion.
Strong growth outlook, but share price is over-valued. TEE has declared 0.4 cents net dividend per share payable on 21st Nov 2007. We are raising the FY08 net profit estimate to S$2.8m and our fair value estimate from 21 cents to 37 cents per dilutive share for FY08, based on 15x PER. With the recent strong interest in property and construction stocks, TEE’s share price spiked up a whopping 122.6% from S$0.265 on 2 July 07 to a recent high of S$0.59. As TEE has already exceeded our fair value estimate, we are downgrading TEE from a Hold to a SELL.
Please refer to the full report for more information and additional disclosures.
Sunday, August 5, 2007
NRA research - Tee International SELL $0.33
Tee Int'l (Aug 2: 38 cents) TP: 33 cents DOWNGRADE TO SELL.
Revenue grew 27.4% y-o-y to $60 million, with growth coming from the infrastructure, rebuilding and security and control segments. Notwithstanding the poor performances of the security and control and new building and development properties segments, operating profit grew 60.8% y-o-y to $3.4 million. For the full year, shareholders' profit surges 102.4% to $1.98 million.
We have raised DCF fair value to 33 cents after taking int account its current development projects and the positive outlook of its engineering segment.
Its share price has surged 213.4% since the beginning of th year and we believe that its current market valuation has already run ahead of its fair valuation, which is 42.5% higher than our fair value. - NRA Capital (July 30)
Revenue grew 27.4% y-o-y to $60 million, with growth coming from the infrastructure, rebuilding and security and control segments. Notwithstanding the poor performances of the security and control and new building and development properties segments, operating profit grew 60.8% y-o-y to $3.4 million. For the full year, shareholders' profit surges 102.4% to $1.98 million.
We have raised DCF fair value to 33 cents after taking int account its current development projects and the positive outlook of its engineering segment.
Its share price has surged 213.4% since the beginning of th year and we believe that its current market valuation has already run ahead of its fair valuation, which is 42.5% higher than our fair value. - NRA Capital (July 30)
Saturday, August 4, 2007
FA - CSC fair value analysis
FY0607 financials (at 31/03/07)
- Rev: $127m (+18%)
- Net profit: $8.6m (+128%)
- Gross profit margin: (8.6m/127m)x100% = 6.8% (* bear in mind a one off asset disposal)
- EPS=$0.0086 (+126%, FY0506: $0.0038)
- Shares as at 31/03/07: 1,112,391,951
1. Analysis based on EPS growth
- 23/05/07 closing price before FY0607 released at $0.385. Market price CSC at historical FY0506 PE 101x (0.385/0.0038), at which CSC is highly over-valued.
- 04/07/07 closing price at year peak high at $0.495, market price CSC at historical FY0607 PE 58x (0.495/0.0086).
- After the recent sell off pressure, closing price on 03/08/07 at $0.35, market price CSC at historical FY0607 PE 41x (0.35/0.0086).
- Assume EPS growth at 100% (lower than FY0607 126% to adjustify no more asset disposal and robust FY0708 financial results due to buoyant construction sector), FY0708 EPS will be $0.017 (0.0086x2).
Verdict
CSC fair trading PE should be at 45x, so in year 2008 (in April - May), bearing unforeseen negative market sentiment, CSC fair value should be trading at $0.77 level (45x0.017) or even higher in year 2008.
2. Analysis based on revenue/profit margin growth (conserativate approach)
- Assume FY0708 revenue at $240m ie, 88% growth
- Assume FY0708 profit margin at 6.8%, ie, same as FY0607 to offset no more asset disposal
- Thus, FY0708 Net profit = $240x6.8% = $16.32m
- Thus, FY0708 EPS = $16.32m/1,112m shares = $0.015
Verdict
Based on fair trading PE of 45x (thought it is high but still not very demanding as construction sector is in red hot boom cycle), CSC fair value should be trading at $0.67 (45x0.015) in year 2008.
- Rev: $127m (+18%)
- Net profit: $8.6m (+128%)
- Gross profit margin: (8.6m/127m)x100% = 6.8% (* bear in mind a one off asset disposal)
- EPS=$0.0086 (+126%, FY0506: $0.0038)
- Shares as at 31/03/07: 1,112,391,951
1. Analysis based on EPS growth
- 23/05/07 closing price before FY0607 released at $0.385. Market price CSC at historical FY0506 PE 101x (0.385/0.0038), at which CSC is highly over-valued.
- 04/07/07 closing price at year peak high at $0.495, market price CSC at historical FY0607 PE 58x (0.495/0.0086).
- After the recent sell off pressure, closing price on 03/08/07 at $0.35, market price CSC at historical FY0607 PE 41x (0.35/0.0086).
- Assume EPS growth at 100% (lower than FY0607 126% to adjustify no more asset disposal and robust FY0708 financial results due to buoyant construction sector), FY0708 EPS will be $0.017 (0.0086x2).
Verdict
CSC fair trading PE should be at 45x, so in year 2008 (in April - May), bearing unforeseen negative market sentiment, CSC fair value should be trading at $0.77 level (45x0.017) or even higher in year 2008.
2. Analysis based on revenue/profit margin growth (conserativate approach)
- Assume FY0708 revenue at $240m ie, 88% growth
- Assume FY0708 profit margin at 6.8%, ie, same as FY0607 to offset no more asset disposal
- Thus, FY0708 Net profit = $240x6.8% = $16.32m
- Thus, FY0708 EPS = $16.32m/1,112m shares = $0.015
Verdict
Based on fair trading PE of 45x (thought it is high but still not very demanding as construction sector is in red hot boom cycle), CSC fair value should be trading at $0.67 (45x0.015) in year 2008.
Forecast for '07 construction demand raised to $19b-$22b
Note: Singapore construction sector is still very robust, should increase my holdings on construction counters (CSC, YongNam, Tee) and infrastructure related counters (Hupsteel, HG Metal).
Business Times - 04 Aug 2007
By ARTHUR SIM
(SINGAPORE) Construction demand continues apace, resulting in Building and Construction Authority (BCA) revising its forecast for construction demand for 2007. It now expects building contracts to reach between $19 billion and $22 billion in value, up about $3 billion from its earlier estimate of between $17 billion and $19 billion.
In a press statement released yesterday, BCA also said that for the first five months this year, construction demand reached about $7.6 billion in terms of contracts awarded.
It also said that the upward revision in construction demand could be attributed to the rise in residential and commercial demand stemming from the current property boom as well as higher construction costs.
Making reference to the revised figures last night, Minister of State for National Development Grace Fu added: 'This buoyant outlook offers both opportunities and challenges for the building sector.'
Speaking at the anniversary dinner of the Singapore Institute of Valuers and Surveyors (SISV) last night, Ms Fu also emphasised the need for sustainable development.
In March, Ms Fu announced that the government was considering amending the Building Control Act to impose minimum requirements on environmental sustainability that are equivalent to BCA's Green Mark certified standards for new buildings and existing ones that undergo major retrofitting.
Last night, Ms Fu added that this initiative was making progress. She said: 'BCA has started consulting the industry players, including SISV, on the proposed legislative requirements.'
Ms Fu also reiterated that the government is aiming to reduce the reliance on sand and granite by 30 to 50 per cent over the next five years and that SISV members can play a key role in influencing consumption or construction materials and methods.
The private sector will, however, have a larger role to play.
According to BCA, of the forecast construction contracts to be awarded this year, private sector construction is expected to make up about 70 per cent of the demand.
Some major projects that are due to be awarded later this year include the Khoo Teck Puat Hospital in Yishun, construction parcels for the two Integrated Resorts, the redevelopment of Ocean Building and some private residential developments, including Reflections at Keppel Bay, a condo at Quayside Collection, Sentosa and The Seafront On Meyer condo.
Business Times - 04 Aug 2007
By ARTHUR SIM
(SINGAPORE) Construction demand continues apace, resulting in Building and Construction Authority (BCA) revising its forecast for construction demand for 2007. It now expects building contracts to reach between $19 billion and $22 billion in value, up about $3 billion from its earlier estimate of between $17 billion and $19 billion.
In a press statement released yesterday, BCA also said that for the first five months this year, construction demand reached about $7.6 billion in terms of contracts awarded.
It also said that the upward revision in construction demand could be attributed to the rise in residential and commercial demand stemming from the current property boom as well as higher construction costs.
Making reference to the revised figures last night, Minister of State for National Development Grace Fu added: 'This buoyant outlook offers both opportunities and challenges for the building sector.'
Speaking at the anniversary dinner of the Singapore Institute of Valuers and Surveyors (SISV) last night, Ms Fu also emphasised the need for sustainable development.
In March, Ms Fu announced that the government was considering amending the Building Control Act to impose minimum requirements on environmental sustainability that are equivalent to BCA's Green Mark certified standards for new buildings and existing ones that undergo major retrofitting.
Last night, Ms Fu added that this initiative was making progress. She said: 'BCA has started consulting the industry players, including SISV, on the proposed legislative requirements.'
Ms Fu also reiterated that the government is aiming to reduce the reliance on sand and granite by 30 to 50 per cent over the next five years and that SISV members can play a key role in influencing consumption or construction materials and methods.
The private sector will, however, have a larger role to play.
According to BCA, of the forecast construction contracts to be awarded this year, private sector construction is expected to make up about 70 per cent of the demand.
Some major projects that are due to be awarded later this year include the Khoo Teck Puat Hospital in Yishun, construction parcels for the two Integrated Resorts, the redevelopment of Ocean Building and some private residential developments, including Reflections at Keppel Bay, a condo at Quayside Collection, Sentosa and The Seafront On Meyer condo.
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