This is good followed up new from research by another analyst, Public in Nov 2013 with remarks as follows.
We expect more contracts from SCORE, with HSL expected to benefit the most for being Sarawak-based builder and strong balance sheet. However, valuations are not attractive in our view.
Hock Seng Lee Bhd (HSL) – Not Rated--------------kenanga today,,,24/04/14 Our new initiation, construction counter - HSL (refer to report dated 23-April 2014) has attracted investors’ interest due to its strong balance sheet and high ability to secure new contracts from the on-going SCORE development. Yesterday, HSL surged 9 sen to break out from its 1-year channel resistance level of RM1.85 to settle at RM1.91. In tandem with its high trading volume, the share price key indicators (Stochastic and RSI) also hooked upwards, suggesting that bullish momentum is strengthening. From here, we expect follow-through buying interest to lift the share price towards RM2.00 (R1) and possibly RM2.18 (R2) further. Meanwhile, we suggest traders to employ a strict stop loss 3 bids below the share’s new ‘resistance-turned-support’ level at RM1.82. Outlook Bullish Key Resistance level RM2.00(R1) RM2.15 (R2) RM2.30 (R3) Key Support level RM1.85 (S1) RM1.75 (S2) RM1.63 (S3) Strategy Not Rated Current Price RM1.91
Hock Seng Lee Bhd (HSL) – Not Rated ---------DATED 24//04//14 Our new initiation, construction counter - HSL (refer to report dated 23-April 2014) has attracted investors’ interest due to its strong balance sheet and high ability to secure new contracts from the on-going SCORE development. Yesterday, HSL surged 9 sen to break out from its 1-year channel resistance level of RM1.85 to settle at RM1.91. In tandem with its high trading volume, the share price key indicators (Stochastic and RSI) also hooked upwards, suggesting that bullish momentum is strengthening. From here, we expect follow-through buying interest to lift the share price towards RM2.00 (R1) and possibly RM2.18 (R2) further. Meanwhile, we suggest traders to employ a strict stop loss 3 bids below the share’s new ‘resistance-turned-support’ level at RM1.82. Outlook Bullish Key Resistance level RM2.00(R1) RM2.15 (R2) RM2.30 (R3) Key Support level RM1.85 (S1) RM1.75 (S2) RM1.63 (S3) Strategy Not Rated Current Price RM1.91
HOCK Seng Lee (HSL) announced that it had clinched an infrastructure project at the Samalaju Industrial Park in Bintulu, valued at RM73.7mil and due for completion by the first quarter of 2016. This is the first major contract for HSL in 2014.
The contract sum is on track with the research house’s financial year ending Dec 31, 2014’s (FY14) total new order book assumption of RM600mil. In fact, according to management, in the year-to-date basis, inclusive of this contract, HSL has already secured RM129mil worth of contracts as during the past four months, some smallish jobs were also secured.
Hence, it is estimated, by now, that its outstanding order book would have reached RM1.22bil from RM1.10bil previously. The order book will last two years.
Given its status as the market leader, coupled with the vibrant Sarawak’s growth story, it is reaffirmed that HSL would be one of the major beneficiaries of the sustained development of infrastructure projects in Sarawak. This is evidenced from it consistently securing more than RM500mil worth of jobs per annum since 2012.
It is believed that HSL’s offered potential total return would be 24% (including dividend yield 2.6%).
HSL is one of the biggest contractors in Sarawak majoring in marine engineering and it possesses bright earnings visibility.
The target price of RM2.31 is based on a forward price to earnings ratio of 11 times FY15 earnings.
Hock Seng Lee (HSL MK) Technical BUY with +13.9% potential return Last price : RM1.94 Target Price : RM2.15, RM2.21 Support : RM1.88 Stop-loss: RM1.87 BUY with a target price of RM2.21 with stop loss placed below RM1.87. HSL’s share price successfully breached the “cloud” on 10 Apr 14 and continued to climb higher before meeting with strong resistance at RM2.00. Despite the recent pullback, HSL is still trading above both the 10-day and 21-day SMA lines, which suggests the near-term uptrend remains intact. Given the bullish crossover in Stochastic, we expect the positive momentum to help the share price nudge higher and retest the psychological resistance of RM2.00 in the near term. A successful breakout above the aforementioned level may pave the way toward further upward continuation as we peg our medium-term target at the 1.61x Fibonacci extension level of RM2.21.
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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....
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Posted by jenabchen123 > 2014-02-21 11:59 | Report Abuse
This is good followed up new from research by another analyst, Public in Nov 2013 with remarks as follows.
We expect more contracts from SCORE, with HSL expected to benefit the most for being Sarawak-based builder and strong balance sheet. However, valuations are not attractive in our view.