What to expect for HSL in 2015? Road and water infrastructure works in Kuching (Phase 2 of Kuching Wastewater treatment plant (RM700m)), Pan Borneo highways (RM27b), SCORE (Samalaju, Tanjung Manis, Mukah) infra-related works.
Why HSL be selective in 2015. (i) has strong orderbook, (ii) face minimal earnings risk i.e. high probability of meeting new orderbook replenishment expectations and sustainable margins, (iii) will benefit from the news/contract flows in 2015, and (v) have compelling valuations.
Expect HSL to clinch Phase 2 of the Kuching Central Wastewater project with an estimated contract value of RM700 to Rm800m in 1QFY15. HSL trading at close to historical mean despite earnings growth potential.
Its strong balance sheet with a ---net cash--- of MYR129.3m or 22 sen/share as at 30 Sep 2014, and amongst the highest margins in construction space.
HSL has the Letter of Intent to undertake Phase 2 and materialisation to an award would boost its orderbook by 73%. The award of Phase 2 has been long delayed due to financing issues but this has been resolved. With its track record and specialised equipment, HSL is poised to clinch the P2 that could lead its orderbook surging to a new high.
yesterday I saw someone comment that all construction company will going down soon... then today suddenly this remark is removed... Mmmm... I wonder why... =_="
Q1 FR release. Compared to 2014; 60% Increase in Revenue & 20% Increase in Profits. With the 11thMP announcement today, Bright and Positive year ahead for HSL. Market Capital at 1B also not bad to take on Big jobs.
have been observe HSL for a month time, very hard to find seller want to sell their on hand HSL share.... very strange, last few day seller q-ing sell at higher price with 100share or 200 share only.... HSL may benefit from sooner Sarawak Borneo highway project announcement once Sarawak election date confirm.
Investment Highlights We maintain BUY on Hock Seng Lee Bhd (HSL), with an unchanged SOP fair value of RM2.30/share. Starbiz reported that HSL is awaiting the tender outcome for package 3 of the Pan Borneo Highway, which could be valued at over RM1bil, based on the contract values of the first two packages. The package involves a 73km-long stretch from Serian (65km from Kuching) in Samarahan Division to Pantu in Sri Aman Division. The 48-month contract could be awarded as early as end of this month. HSL corporate affairs director Sonja Gan was cited as saying that the scope included extending the 73km- stretch to a dual carriageway, upgrading of the existing single lane, the construction of three flyovers, and 20 bridges. The contract period is slated for 48 months. Starbiz reported that the project delivery partner Lebuhraya Borneo Utara has pre-qualified 17 companies for the highway project. It reported that priority is given to Sarawak-based companies as firms from outside Sarawak are permitted to hold not more than 30% in any JV submitting bids for the contracts. We view HSL as a top contender to land jobs under the RM27bil Pan Borneo Highway, given its expertise in marine engineering. As it has been noted, HSL boasts of an impressive track record of already completing ~800km of roads in the state. Just like steel specialist KKB Engineering, HSL also has engineering capabilities to take on flyovers, underpasses, and bridges. We also believe HSL continues to be the frontrunner for the remaining phases of the Kuching centralised sewerage system, which could be valued at another RM3.5bil over 4-5 more packages. Meanwhile, HSL is embarking on a major industrial park project at Muara Tabuan in Kuching for SMEs, with a GDV of over RM200mil, comprising 195 industrial buildings. Starbiz reported that the project on 25ha is expected to be launched in the next few months. It has been reported that HSL expects the property segment to contribute ~20% to group bottom line in FY15. Property made up ~10% of FY14 earnings. Maintain Buy: HSL could be a strong beneficiary of jobs news flow leading up to the impending state elections, which could now be held earliest in 1Q16.
Pan Borneo highway, flood mitigation project, water treatment project etcs... when focus is being put on Sarawak to win more votes for next election... I am already all in into HSL.. what say you??
it can easily go up to >RM4.00 when HSL announces more project wins this year (some of those are a sure thing).... the biggest meat is the Pan Borneo project and the Kuching water treatment project...
bro rockycleft, I am not wearing glasses, so how can i remove the lens cover? haha... if you do not agree with the fact that Sarawak projects are going to benefit these companies, that is fine... after all, we all own our accountability on the investment we do...
it is always good to have if(s) as you will be amazed at its unlimited potential, haha... just like what Stephen Chow said, if one does not have a dream, he is no different from a salted fish...
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....
chernhung
178 posts
Posted by chernhung > 2014-08-27 21:27 | Report Abuse
revenue and net profit drop due to new launch of properties in year 2013...