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Hock Lian Seng - another share in my stock pick list delivers a good set of 2009 results
Friday, 26 February, 2010  1:17 AM
Posted by Kevin Scully

Hock Lian Seng, one of the 2010 new editions to My portfolio has delivered a good set of 2009 results. Key numbers in the results are:

a) Turnover rose 15.6% to S$224.8mn

b) net profit rose 36.9% to S$21.3mn with EPS of 4.2 cents and PER of 6.9 at S$0.29

c) company proposing a final dividend of 1.5 cents giving a dividend yield of 5.2%

d) Group has gross cash of S$143.7mn or about S$0.28 per share.

e) Order book of S$574mn

The strong outlook for construction in Singapore will see contruction demand between S$21 to S$27bn.  About two thirds of this will be public sector /Government projects which is where Hock Lian Seng is positioned.  I expect Hock Lian Seng to be able to secure about 5% of annual MRT projects which are about S$5bn.  This should enable it to deliver annual revenue in excess of S$250mn per annum.

Still very cheap/attractive and remains on my Stock Pick list....with no change in my target price (check Stock Pick section)..

 

Comments

EVERYDAY DOWN !!!
SOME ANALYSTS SAID GENTING SP MAY HIT $1.50 TO $3.00.

POOR THING. LOOK AT THE SHARE PRICE. EVERYDAY DOWN AND DOWN...WON'T STOP!!!!

     CASINO  on 26 February 2010  11:55 AM
Genting S'pore Swaying Sentiments
Hi Casino

The current sentiments on Genting Sp is rather sluggish due to 2 reasons, viz. :

a) The euphoria on its official openning has died done and the volume of biz transactions (from gaming turnover) was below expectations.

b) Its main theme attraction and casino lure is now under slight threat from the soon to be opened Marina Bay IR (Sands) which is due for official openning on 27 Apr.

I think the mood on Genting Sp will continue to be soft for the rest of the year. The spur will probably come before closing of accounts at year end when the figures for its revenues are more definite to work on vis-a-vis analysts' predictions.

     CC Low  on 26 February 2010  01:21 PM
Hock Lian Seng Has Good Value And Potential
Dear Kevin

I agree with you that there is good value behind this counter, with a lot of upside potential and little downside risks. Virtually debt free except for some contingent liabilities in Bankers' Guarentees, and a large cash hoard (at present placed in low yield instrument of FD).

At the moment based on turnover in trade for the past few weeks, I think the counter has not yet been in the radar of fund managers yet. So, as you have suggested, it may be good for individual investors to lock in on this counter as early birds with some worms to catch (if for anything else, the dividend with a ROI of 5.2 % offers an immediate bonus while they sit out the gestation period).

I will be keeping it in my radar definitely, and maybe do a little transfer of investments during this lull due to protracted market corrections.

Regards.

     CC Low  on 26 February 2010  01:45 PM
GENTING SINGAPORE
Hi Casino,cc Low,

On top of CC low 2 points, I would like to add one more point. The Casino annouced the opening at a very short notice. Those oversea customer have no time to plan their trip. This is against advertising norm. You can see the difference from what SANDS did, they annouce more than 2 months in advance plus some VIP arrangement behind well before the opening. The Marina Sands opening will also help RWS to gain some customers who like to go Casino hoping. Can someone suggest speed boat or cable car linking the 2 resorts to facilitate Casino hoping. I will just hold on to the share.

     RAYMOND OOI  on 26 February 2010  01:54 PM
EVERYDAY DOWN !!!
RAYMOND AND LOW

I am no expert on this. But I think the Genting share price down and down everyday sent out the message that we need to rethink again about the businesses of casino.

     CASINO  on 26 February 2010  02:22 PM
Genting
I have not been following Genting Singapore specifically but when I was an analyst at Schroders some 20 years ago - I covered Resorts World. I think the Casinos in Singapore will find it difficult to make serious money. First the initial costs (especially land and construction) is high; and second you need a decent amount of high rollers to make money. Herein lies the conflict for Singapore - if you want to be an international financial centre you must have very stringent anti-money laundering rules and enforcement - which means that potential high rollers must disclose the source of their funds...!!!???? I cant imagine any of them doing that. So you are left with the mass market which doesnt spend very much. That said, I would wait for one or two years for the earnings to stabilise before looking at it as a serious investment. I agree that the play as a "concept" stock is over.

     Kevin  on 27 February 2010  09:27 AM
Genting -- sustainable in Singapore with Competition with Sand
In the small market and high cost in Singapore basically business point is disadvantage. Further, with close competition to Sand and gambling ship further doubt (Yet Malaysia Genting share the market share too). In Veitnam has 30 casino that close to Mercau. I have doubt too how Singapore Genting to survive good money for long run. Let's see any miracles. Good luck to you as I'm not invest and support gambling business. Cheers

     Benjamin  on 19 March 2010  12:42 AM

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