Post Reply
1-17 of 17
OCBC securities targets $0.8 this morning! CHEONG AH!!!!!!
Construction boom propels growth
Lion Teck Chiang Ltd
Rising demand for steel from construction industry
Teck Chiang (LTC) recently and based upon our discussion with
management, we believe that LTC's steel and property divisions should
continue to benefit from positive developments in the construction industry
and residential property market. BCA estimated total contracts offered in
2007 to be around S$17-19b, led by the dual IRs (with S$10b worth of
building contracts) and the Marina Bay Financial Centre. The numerous
en-bloc sales of private estates for redevelopment (S$9.2b transactions
were made in 2006) also spell a sustained demand for steel over the next
few years. And this bodes well for LTC's steel division, which contributed 82%
of its FY06 revenue.
. We visited Lion
Value-added services to offset any margin squeeze.
demand for steel, where we understand that its order book for steel products
has been filled up to one year in advance, LTC is also looking to enhance
its steel division by offer value-added services (VAS) such as pre-caging.
And as VAS commands a higher gross margin of 9%, versus just 4% from
pure steeling trading, this should help mitigate any possible margin squeeze
arising from the volatility of steel prices.
Besides the strong
Potential boost from property appreciation.
pieces of land for redevelopment into landed properties. Several units have
been sold and would be recognized in its FY07 just ended June 2007, while
others are in various stages of development. According to URA's property
price index, detached residential property prices have risen 4% between 1Q07
and 4Q06, suggesting the market is still buoyant. We estimate that LTC's new
developments could add another S$8m, or around 6%, to our FY08 NAV
estimate.
LTC has also bought several
Upgrade to BUY, fair value estimate of S$0.80.
some 65.8%, since the start of the year, likely in anticipation of a strong set of
FY07 results due in August, but we believe there is still more upside for reasons
stated above. We have also revised our fair value from S$0.46 to S$0.80,
now based on 10% discount to RNAV versus 40% previously, to reflect the
buoyant construction industry and property market. As there is still a potential
27% upside from here, we upgrade our rating from Hold to
LTC may have appreciatedBUY.
UOBKayhian targets $0.8 (RNAV) this morning!!!!!!!!!!!
Lion Teck Chiang- Price chart is attractive as the stock displays a strong uptrend on daily and weekly chart. Weekly chart shows a clear rounding saucer formation, while daily chart indicates a break out of a key resistance level of $0.55. Interest in the stock could stem from the fact that the stock is trading at a deep discount ot book value of $0.804. The company had reported a 367% increase in 1H07 to $4.805 on the back of higher contribution from property and steel business. The stock closed at $0.565 yesterday gaining 1.5cents. We like the stock because it is trending up gradually and has not had an explosive rally. Downside risk as such should be limited to $0.55. A conservative price projection based on earlier price swings would target a move towards $0.67-0.70. Recommend accumulating the stock at $0.56-0.575.
LTC looks good. One of the few property dev/steel trading counter that's below NAV and low PE.
LTC is going to benefit with the property market in Singapore/Malaysia picking up.
Note that the daily chart bolinger band is constricting. With good fundamental, baring unforeseen circumstances (ie market correction) LTC is expected to do well in the short/med term.
Vested.
This share is a discount from NAV. Vested.
Lion Teck Chiang OCBC research report
http://www.remisiers.org/research//Lion%20Teck%20Chiang-070126-OIR.pdf
Have you seen such ridiculous report?
Current Price : $0.515
Fair Value by OCBC : $0.40
OCBC rating :BUY
OCBC rates it a buy and gives it a fair value of $0.40.
What kind of rating is that????
I bet that Dr is really selling off whatever he has now...
This counter move because of yesterday's Straits Times article. So be really careful. The Mr. Dr maybe already laughing to the bank when people starts buying.
I have 1 lot of Lion Teck Chiang bought during its IPO at $1200.
How pathetic !
Wow ! up $0.135 @ $0.55 but still some 30% below book value (NTA $0.77). This has not taken into account its prime land sitting next to Mcpherson MRT that could be REITs soon or better still redeveloped. It's going through the sky from now on....
DTZ said (see below BT article) Reits hv been snapping up Industrial Bldgs in Joo Seng Rd, Tai Seng Dr, Genting Lane etc. Thus LTC large Industrial buildings (Freehold Land) in Arumugam Rd that is only a stone throw from Mcpherson MRT (new Circle Line 2) are even MORE attractive REITS target. This is surely a GOLD MINE.....
|
BT article Published October 25, 2006 
|
|
S'pore industrialists take plunge into property investment
They buy, refurbish and resell industrial property to Reits
By ARTHUR SIM
(SINGAPORE) Savvy businessmen and industrialists are fast becoming a new class of investors as they are finding that there is more money to be made in selling property than in toiling over a lathe.
 |
|
"Before Ascendas Reit, there was no such thing as an industrial property investor.' |
|
- DTZ Debenham Tie Leung director and auctioneer Shaun Poh |
|
| |
 | |
DTZ Debenham Tie Leung director and auctioneer Shaun Poh says some people are snapping up good industrial properties at auctions, refurbishing them, finding tenants, securing leases, then selling them to industrial Reits for a neat profit.
Up to 10 individuals or companies are involved, he says. It is not a large number but 'before Ascendas Reit, there was no such thing as an industrial property investor'.
Some of the bigger players include Crescendas Group, Trivec and Steel Industries.
In July, Trivec sold a building in Joo Seng Road to Mapletree Logistics Trust (MLT) for $13 million. It paid about $3.8 million for it in August 2005. In May, Crescendas sold a building in Tai Seng Drive to MLT for about $38 million. It paid $7.18 million for it in January 2005.
Although the profits look very attractive, Mr Poh points out that the buildings are usually in very 'shabby' condition so investors could spend between $3 million and $5 million retrofitting them.
More important is that these investors are also industrialists, who can guarantee leases of up to five years - an important factor in a sale and leaseback deal with a Reit. The tenants come from the investors' subsidiary businesses or through their industry network.
The value of industrial property has been rising. According to a report by DTZ Research, $141.55 million of properties were auctioned by the four major auction houses in Q3 2006 - a 137 per cent year-on-year increase. The transaction value of industrial properties more than doubled to $20.06 million compared with Q3 2005, although there was no marked increased in the number of industrial properties sold.
DTZ Research analyst Serina Wong believes this is due to increased sales of larger properties. 'In Q3 2006, almost all the industrial properties sold in the auction market had floor areas between 35,000 and 95,000 sq ft,' she says. Almost all were mortgagee sales.
Reits specifically look for large properties. Among the industrial properties sold at auctions recently, Mr Poh estimates that at least three could be 'Reit plays'. The highest price paid - $5.01 million or $63 psf - was for a choice property in Genting Lane that is likely to be resold to a Reit.
What do industrial Reits look for in a property? It must have about 100,000 sq ft of floor area and a minimum 40-year lease, and the seller must also have market credibility as securing leases is crucial for Reits.
Many business folded during the last economic slowdown, resulting in banks foreclosing on properties, says Mr Poh. 'A lot of banks are now willing to cut losses through mortgagee sales.'
There still is, of course, demand from traditional industrialists. Mr Poh says a property in Sungei Kadut was hotly contested during a recent auction - bidding started at $2.5 million and the property was sold for $3.5 million, a 40 per cent premium.
DTZ Research says the average price of industrial properties sold at auctions increased in Q3 2006 to an average of $3.34 million, up 367 per cent quarter-on-quarter and 259 per cent year-on-year. |
Be careful with this counter. It has low volumes and from the TA charts, its probably on a downtrend.
You see LTC has a HUGE investment properties at Arumugam Rd amounting to $69m (valued previously) & now Ho Bee has set a new benchmark of $106psf per plot ratio @2.5 permissible gross plot ratio. IF LTC do a revaluation now - it may reap substantial revaluation surplus and better still, if it takes the REITs route to free up cashflow & distribute to shareholders as bonus div - something to look forward to in this counter.....
SGX Announcement by Ho Bee reproduced below:
HO BEE INVESTMENT LTD (Co. Regn. No. 198702381M)
ACQUISITION OF INDUSTRIAL SITES
Ho Bee Investment Ltd ("HBI") is pleased to announce that the Group has entered into contracts to acquire two blocks of double-storey light industrial building located at Nos. 29 and 31 New Industrial Road.,
The subject properties, with a freehold tenure, have land areas of 20,150 sq ft and 21,669 sq ft respectively. The sites are designated for industrial use under "Business 1" zoning, with a permissible gross plot ratio of 2.5. The total acquisition cost for the two adjoining sites is S$11.08 million or about S$106 psf per plot ratio.
The developments are situated along New Industrial Road, off Upper Paya Lebar Road, in the vicinity of MacPherson and Paya Lebar industrial estates. The area is easily accessible via PIE and CTE and within a 10 minute walk from the proposed Upper Paya Lebar MRT station.
The Group intends to amalgamate the two sites and redevelop the existing properties into a block of high-tech industrial building. The acquisition and development cost of this project will be financed by the Group?s internal funds and bank borrowings and is not expected to have any material impact on the Group?s consolidated earnings and net tangible assets per share of HBI in the current financial year ending 31st December 2006.
None of the directors or controlling shareholders of HBI has any direct or indirect interests in the above transaction.
On behalf of the Board
Desmond Woon
Executive Director
25 October 2006
None of the directors or controlling shareholders of HBI has any direct or indirect interests in the above transaction.
On behalf of the Board
Desmond Woon
Executive Director
25 October 2006
|
OCBC Research - Buy recommendation on LTC - with price target of up to $0.40 |
|
Lion Teck Chiang
Oct 23 close: S$0.35
OCBC INVESTMENT RESEARCH, Oct 23
Lion Teck Chiang
Oct 23 close: S$0.35
OCBC INVESTMENT RESEARCH, Oct 23
AFTER posting year-on-year price gains of 1.7 per cent and 2.7 per cent in Q1 and Q2 2006 respectively, the price momentum for detached houses continued into Q3 based on recent transactions.
The higher prices achieved for recent sales on the 55,259 sq ft Chansville site in Mountbatten Road, which is within the general location of two of Lion Teck Chiang's (LTC) sites, are favourable for LTC's residential developments.
One site, with an area of 38,653 sq ft slated for detached bungalow housing, is located at Wilkinson Road. The group recently launched sales on this project comprising seven detached bungalows. With the interest seen for recent transactions in this scenic residential suburb in the eastern part of the island, it is likely that these units can achieve prices within the range of S$4 million to S$4.5 million each.
The other site of 14,000 sq ft at Branksome Road, close to its Wilkinson Road site and slated for development into three detached bungalows, is scheduled for launch in FY2008. Assuming current price levels are sustained into FY2008, prices for this project are expected to at least match those achieved at the Wilkinson Road site.
Total contributions from the two projects to group earnings, estimated to be between S$7 million and S$8 million, will be felt over FY2007 to FY2009.
With the strengthening of residential property demand, particularly in the detached housing segment where LTC has exposure, we expect development property earnings to be a key earnings driver in FY2007 to FY2008. After factoring in higher potential contributions from residential projects, we have revised LTC's net profit for FY2007 from S$4.8 million to S$6.2 million. Fair value has also been upgraded from S$0.36 to S$0.40, largely on account of the expected gains from residential developments.
Since our earlier report in August, the stock has appreciated by 30 per cent but there is still further upside of about 15 per cent relative to its revised fair value. The investment case for LTC remains and we are maintaining our 'buy' rating.
BUY |
Yes 'cos do verify @ the entrance by keying in your NRIC no. But if u've bought via CPF Investment Scheme I think it may be in your trustee's a/c (i.e. UOB, OCBC, DBS name instead) - not sure, but just need to register (as observer) to go in if your name is not there.
Must you be a shareholder to go to an AGM?
Going to Lion TC AGM on Friday (27 Oct) - anyone have questions or issues to raise on ur behalf ?
NTA very high.
