Tiong Seng

Tiong Seng: 3Q13 net profit plunged 55% y/y to $2.3m despite revenue growth of 18% to $146.2m. This was caused by higher labour (+14%) and depreciation (+93%) costs, as well as a lower share of profit from JVs (-96%). The steady revenue growth came on the back of its construction segment of $142.4m (+19%) and sales of development properties in China (+114%). Group sees challenges in the construction industry due to rising labour costs and a shortage of skilled workers, in addition to the restrictions and levies imposed on hiring foreign labour workers in Singapore. On its property development in China, Tiong Seng expects growth momentum to continue, driven by urbanization and income growth. The development segment will be the group's second engine of growth going forward, with majority of the projects expected to complete over the next two to four years. Tiong Seng ended the quarter with an order book of $1.1b, stretching to 2015.