Hock Lian Seng

Hock Lian Seng: Reported strong set of 3Q results, with Rev at $57.8m, flat QoQ and Net Profit at $5.7m, placing 9M10 Rev at $176.6m, +5.9%YoY n while Net Profit at $20.8m, +49.1%YoY. Strong performance attributed to higher progress claims recognized from Marina Coastal Expressway and Jalan Gali Batu Depot Projects, while gross margins increased to 13.3%from 10.9%YoY as grp achieved cost efficiencies….

Going forward, grp remains positive on outlook, on back of recent data showing that construction sector registered consecutive nine qtrs of expansion, supported by public sector projects such, while steady stream of public sector projects augur well for a positive outlook….

We note that Group’s order book stood at approximately $408.9m, vs annualized FY10 Rev of $235.33m. At current levels, grp trades at undemanding valuations, with annualized 5.6x FY10 E P/E, vs peers average of 9.1xFY10E P/E