Lian Beng: Proposed to spin off 90% owned subsi Sinmix and wholly-owned subsi Lian Beng Engrg & Machinery (engrg & concrete business) on a primary listing on Taiwan Stock Exchange. Approval sought by EGM and SGX. If Lian Beng does successfully list on TSE and depending on the valuations, other construction counters such as KSH, BBR, Chip Eng Seng, Lum Chang and others may get a boost and consider secondary listings on TSE. The industry generally trades at an historical avg of 6.0x.
DMG notes that co trades at 3.4x fwd P/E and may have capacity to trade up to the sector avg of 7x, maintains Buy for TP$0.71. Taiwanese concrete peers trade at an current avg P/E of 12.9x and construction/engineering at 7.8x. Positive include strong orderbook as of May 11 of $839m and track record of project wins.
Listing is expected to provide greater clarity for financial institutions to lend to engrg and concrete business.
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