HOCK SENG LEE BHD (-ve)
Sarawak-based Hock Seng Lee (HSL) (Fundamental: 2.6/3, Valuation: 1.2/3) is mainly involved in civil engineering, marine engineering and construction works, as well as property development.
HSL’s shares rose as much as 9.6% since May 11th, prior to the announcement of its 1Q2015 earnings results. The stock closed 0.5% higher at RM1.95 yesterday.
For 1Q2015, revenue surged by 60.7% y-o-y to RM186.5 million, while net profit grew 19.7% to RM19.6 million, mainly attributed to higher contribution from construction segment.
At end-March 2015, HSL has outstanding orderbook of RM870 million or 1.5 times construction sales in 2014.
The property segment currently accounts for only 5% of its total sales. HSL expects to launch the first phase of its high-end residential project, La Promenade, by 2Q2015. La Promenade is a 200-acre mixed development situated along Kuching-Samarahan Expressway.
The stock trades at a trailing 12-month P/E of 13.9 times and 1.78 times book.
This article first appeared in The Edge Financial Daily, on May 22, 2015.