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Background:

home

and has been listed on the SGX since 1999.

While accredited to tender for a wide variety of

projects, the Group has operated mainly as a

main contractor for private residential projects

in recent years.Lian Beng is one of the largest‐grown construction group in Singapore,

Recent developments:

announced a 55% investment in a 201,443 sq ft

land parcel which cost S$67m. The Group plans

to develop this piece of land along Woodlands

Road into an industrial complex for sale and

lease. This is its second industrial property

investment, following the acquisition of a

$23.6m building (along new Industrial Road)

from SGX late last year.Last week, Lian Beng

Key ratios…

Price

Price

Dividend per share / yield: SG 0.8 cents/ 2.5%

Net cash/ market cap: 11%‐to‐earnings (12‐mths trailing): 5.1X‐to‐Book: 1.1X

Source: Bloomberg

Everything else…

Share price (S$) 0.34

Issued shares (m) 529.8

Market cap (S$m) 180.1

Free float (%) 64.5%

Financial YE 31 May

Major

shareholders

Chairman

YTD change +11.5%

52‐Ong Pang Aik 25.3%‐wk price range S$0.25‐0.35

Source: Company

Our view

New trick up Beng’s sleeve?:

have cited the trend of developers looking into

shoebox industrial units, following the success of

shoebox residential units. The attraction stems

from the substantially lower psf prices,

exemption from government’s property cooling

measures and attractive yields (6

to sub

could be an early player into this trend.Recent reports‐8% compared‐4% for residential). We think Lian Beng

More work than it can handle

core construction business is tracking very well.

The sharper than expected rebound in the

residential market has meant spade loads of

new contracts since 2008. It currently has a

record orderbook of $762m locked in at healthy

margins, which should keep it busy and happy at

least till 2013.: The Group’s

Rolling in the dough:

impressive net profit of $22.6m for 1H11, which

grew 100% yoy (gross margins improved from

13% to 16%), mainly from construction

activities. We estimate that excluding net cash

and book value of property developments, the

stock is trading at less than 2X PER (based on

annualized 1H11 numbers).The Group reported an

Contracts secured in 2010

Project

Contract

Value (S$m)

Date

announced

Expected

Completion

The Scala 119.5 Aug

Spottiswood 88.3 Jun

The Laurels 95.0 Apr

Centro

Residence 78.0 Mar

Dakota

Crescent 144.0 Mar

Total 524.8‐10 4Q 2013‐10 2Q 2013‐10 1Q 2013‐10 1Q 2013‐10 1Q 2013

Source: Company, Kim Eng

Year End May 2008 2009 2010 1H10 1H11

Sales (S$m) 194.8 308.4 345.7 157.6 249.3

Net profit (S$ m) 11.9 17.1 24.0 11.6 22.9

EPS (S$ cts) 2.39 3.21 4.54 2.13 4.26

EPS growth (%) na 34.3 41.4 na 100.0

PER (x) 14.2 10.6 7.5 na na

Div per share (S$ cts) 0.5 0.6 0.8 na na