Lian Beng

Lian Beng: Announced strong set of FY10 results, which was in-line, albeit at the higher end of estimates.
Rev at $507m, +46.7% yoy, while net profit at $48.6m, +100.7% yoy. Strong rev performance driven by larger contracts during the yr under review, while gross margins improved at 14.7% vs 13.1% yoy, due to efficient production and tight control over project mgt. Grp has recommend a first and final div of 1c/share and special dividend of 0.6c/share (div yield of 4.2% and payout ratio of 17.6%).

Grp’s Orderbook stood atb solid $839m, underpinning earnings till 2013, while balance sheet healthy with grp in a net cash position. Going forward, mgt remains confident of prospects, tipping a consistent level of interest in the private residential property mkt and the influx of public housing projects into the mkt to boost orderbook. We note that at current price, valuations are compelling, with grp trading at 4.5x FY10 P/E vs peers historical average of 10x.