Lum Chang

Lum Chang: At 4.9x FY12 P/E, 0.8x P/B, UOBK notes Lum Chang is an inexpensive contractor with strong financials. Lum Chang has been paying consistent dividend of 2 cts for the past 3 yrs, which translates to an attractive div yield of 6.0%. Further stock price is underpinned by cash reserves of $77m, which represents 62% of market cap. With a strong construction orderbook of $600m and its new EC project at Woodlands (JV with Fraser Centrepoint) to be launched in Apr ’13, the house believes Lum Chang’s construction arm will likely be kept busy till 2016. Notes potential share price catalysts in new contract wins, and potential property invmt in Asia and London to create additional recurring income. The stock has been trending up since making a low of $0.235. Notes if prices hold above $0.32, expect a break above $0.35 and test of $0.40 next. UOBK has an unrated view on the stock.