CSC Holdings - Sterling Results (Results)
15 Nov 2007
In 1H08, revenue jumped 245% YOY to S$185m while net profit surged 296% to S$19.1m.
Strong organic growth resulting from the buoyant Singapore construction sector, coupled with the acquisition of L&M Foundation, Soil Investigation and G-Pile Sistem, contributed to the stellar performance.
Construction counters are trading at an average forward PE07 of 21.8x and PE08 of 10.7x. However, most of them have December as their fiscal year-end and are currently towards the end of FY07 while CSC Holdings year-end is in March and is currently in FY08.
Given positive developments at CSC, we use a PE08 of 14x, and its diluted EPS of 3.18, to value CSC Holdings at 44.5 cts. Hence, we upgrade CSC Holdings to a BUY recommendation.
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