Lum Chang

Lum Chang: FY14 net profit rose 17% to $25.1m, while revenue fell 44% to $276.6m on lower revenue recognized from four construction projects which have been substantially completed last year and this year. Malaysian developments also contributed lower revenue on lesser phases being completed. Gross margins increased 3.9% on the back of decreased revenue from construction projects which yields lower margins. Bottom line was buoyed by a $13m share of associates’ profit, versus $0.3 loss a year earlier. Net gearing stood at 19% (-0.6ppt). Lum Chang had recently secured a $87m contract from HSBC Institutional Trust Services to design and construct a six storey ramp-up warehouse at Toh Guan Road East, bringing outstanding construction projects to $490m. The aforementioned project is expected to be earnings accretive for FY15. Lum Chang is currently trading at 5.8x FY14 P/E. 1.25¢ final DPS proposed, bringing full year DPS to 2¢ (flat)