Bought some HSL. Among the construction sector. This one still one of the best. Low DE ratio, strong support from Dato, 3.3 Billion order book. Below NTA , LOW PE ratio. Undervalue to me.
This counter has lots to do of Sabah recovery and Budget 2021. Government says pan borneo a go. So this counter is about time when vaccine now is available. Its gonna be over RM2 if I so believe. A good leader in such industry with good fundamentals and low gearing. All met for a Gem in the value investing fraternity
First of all, you need to check the recent buying volume on YTL on the preceding days of msci and after.
Funds love to buy stocks with a theme when a disguising scenario presents itself, ie. msci
Do you think funds could have bought without moving the price on a regular day? And more importantly why do you think they willingly absorb it if it's a lousy share with no good story to run on for the next year riding on stocks with economic recovery theme.
So why do funds buy YTL in the first place? Two words, HSR and cement.
Do you know that YTL has 70% monopoly on cement after buying out their competition? And cement prices have been running up since 2019. As you well know construction work can take years, there will be a long runaway for YTL to profit from selling cement alone - 1 bil profit just from cement, understand that.
Last it had 1 bil profit, it was trading north of 1.5. And that's just from cement, how about the construction contracts?
You should also know that as they were previously handling the HSR projects, they have on their hands very useful logistics data to cut HUGE costs on the HSR project. Do you think the gov would want to waste unnecessarily on this project? Certainly not.
Moving on, with the new tendering, there has been realignment of the tracks, and as you well know YTL is part owner of ERL which connects to KLIA, and HSR will be integrated with KLIA. So can you imagine YTL not benefiting?
The economy moving on will be very bullish on construction companies due to dire need to stimulate and jump-start the economy. The best proxy to construction theme is YTL.
tdlr: Just buy YTL for a easy two bagger in one year.
KUALA LUMPUR: Maybank Investment Bank Research has reinitiated coverage on Hock Seng Lee Bhd on expectations of an earnings rebound in FY21 and strong job prospects in FY22 following the Sarawak state election.
The research house forecasts the group's net profit to rebound 6% in FY21 and expect this to rise a further 40%/11% to RM49mil/RM54mil in FY22/23.
Its earnings forecasts imply a three-year CAGR of 18%. It assumes a conservative order book replenishment of MYR300mil/400mil for FY21/22E.
Moving forward, Maybank IB expects major infrastructure to be revived and accelerated to meet deadlines following the disruptions caused by the MCOs.
It noted that the state government has allocated about RM6.3bil in 2021 to finance infrastructure projects in the state.
"We expect HSL to win more jobs given its expertise in the water infrastructure space.
"Major infrastructure projects in Sarawak include Coastal Road, Second Trunk Road, Lawas/Limbang Road, various road and bridge projects and the State’s water and electricity grid projects," it said.
Hock Seng Lee had a healthy outstanding order book worth RM1.8bil, which is 3.7x cover of its FY20 revenue and a strong net cash of RM199mil or 36 sen per share as at end-March 2021.
It also owns land for property development with a book value MYR185.7mil as at end-March 2021, translating to 34 sen per share.
Maybank IB has a "hold" call and target price of 97 sen on Hock Seng Lee.
Top 24 shareholders own 97.15% of Hock Seng Lee Berhad
Hock Seng Lee Enterprise Sdn Bhd 58.46% Permodalan Nasional Berhad 14.7% Employees Provident Fund of Malaysia 4.53% Chee Yu 4.52% Chee Hung Yu 4.04% Chee Ming Yii 1.58% Yuong Yu 1.39% Pertubuhan Keselamatan Sosial 1.33% Chee Sing Yii 1.17% Great Eastern Life Assurance (Malaysia) Berhad, Insurance Investments 1.03% Kung Kang Lau 0.65% Kiing Lau 0.61% Yuong Hui Yu 0.51% Public Mutual Berhad 0.47% Yuong How Yu 0.33% Kiew Hiong Hii 0.31% Sing Hie Tang 0.29% Song Ching Wee 0.25% See Chang 0.24% Ling Lee Chan 0.21% DBS Group Holdings Limited, Asset Management Arm 0.2% Ang Lui Lim 0.19% Kiing Lau 0.13% MIDF Amanah Asset Management Berhad 0.0027%
This book is the result of the author's many years of experience and observation throughout his 26 years in the stockbroking industry. It was written for general public to learn to invest based on facts and not on fantasies or hearsay....
davidkkw79
5,068 posts
Posted by davidkkw79 > 2019-09-17 11:14 | Report Abuse
Before indonesia moving new capital to kalimantan... I think the fire from forest will burn off all hutan in sarawak first.