Lian Beng

Lian Beng: 9MFY14 net profit and topline rose 67% to $50.3m and $585.6m respectively. Revenue was boosted due to the industrial development property M-Space which attained TOP in Jan’14. Other ongoing and new projects also contributed to revenue growth. Construction revenue contributed 53% of revenue, while property development and ready mixed concrete segments contributed 30% and 15% respectively. Gross margins improved by a tremendous 5.7ppt to 19.7% due to the recognition of M-Space. Share of associates loss burgeoned from a low base to $2.5m mainly due to selling and marketing expenses of Newest, KAP Residences Eco-tech@Sunview and Floraville. Latest orderbook stood at $1.1b, with activities progressing well into FY17. Dormitory business (2% of revenue) is expected to have a material contribution going forward. FY14 profits is also expected to be a bumper one as the Lian Beng switches from a cost model to a fair value model for the accounting of investment properties. NAV at 28 Feb was $0.5746, translating to 1.13x P/B.