Soilbuild Construction Group

Soilbuild Construction Group: 3Q14 net profit fell 36% to $4.0m taking 9M14 net profit to $13.1m (-18%). Revenue was down 26% to $62.2m due to the completion of several projects, namely from Lavendar, Tamapines HDB, Xin Ming Hua, Ang MoKio and Rigel projects. Meanwhile gross margin inched down to 10.6% from 11.2%, due to timing differences in the revenue recognition for projects with varying profit margins. Soilbuild highlighted that the construction sector grew by 1.4% y/y in 3Q14, compared to the 4.1% growth in 2Q14, with the lower rate of growth attributable to a slowdown in private sector construction activities. The group has an order book of ~$666m, stretching revenue visibility over the next two years. At the current price, the group trades at 9.1x annualized 9M14 P/E.