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Rather than read my stuff on BBR's FY 2012 results, forummers will probably find Lynette Tan's (OSK-DMG Analyst) recent piece more insightful ............ note the target price (she is consistent).............
QUOTE
BBR Holdings: Outlook remains competitive (BUY, S$0.26, TP: S$0.35)
Lynette Tan
BBR achieved PATMI of SGD 4.2 Mln (+45.7% YoY) in 4Q12, even as revenue declined 19.4% to SGD 74.8 Mln. This was largely due to better gross margins as a result of better project mix. Demand for construction projects (particularly from the public sector) is expected to remain healthy, backed by the government’s plans to enhance Singapore’s infrastructure. We think BBR is in a good position to secure more projects, given its capabilities. However, rising labour and material costs as well as competition, could compress margins. BBR is currently trading at 4.2x FY13F earnings. Maintain BUY with a TP of SGD0.35, based on 5.6x FY13F P/E.
Declares special dividend. BBR declared a dividend of SGD 0.8¢ / share. Including the special dividend of SGD 0.4¢ / share, total dividend for FY12 is SGD 1.2¢ / share. This translates into a yield of 4.4%.
Potential government projects could keep BBR busy. As the government looks to grow Singapore’s population, there are plans for more public housing, schools and other infrastructure spending. BBR has been involved in a number of public projects before and we think it would be able to secure some of the projects in the pipeline. Its current order book stands at SGD 960 Mln (vs SGD 770 Mln a quarter
ago), which is expected to last till 2015. However, the construction sector in Singapore is facing stiff competition, especially from overseas construction companies which are usually part of a bigger consortium. Coupled with the expected rise in labour costs, margins are expected to continue to face downward pressure.
Revenue growth helped by projects in active stage of construction. As some of its projects enter the active phase of construction, the increased billings would help boost revenue in FY13 and FY14. Construction at its Bliss @Kovan property development commenced at 2H12 and is likely to contribute more to revenue in FY13 and FY14.
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Vested
QUOTE
BBR Holdings: Outlook remains competitive (BUY, S$0.26, TP: S$0.35)
Lynette Tan
BBR achieved PATMI of SGD 4.2 Mln (+45.7% YoY) in 4Q12, even as revenue declined 19.4% to SGD 74.8 Mln. This was largely due to better gross margins as a result of better project mix. Demand for construction projects (particularly from the public sector) is expected to remain healthy, backed by the government’s plans to enhance Singapore’s infrastructure. We think BBR is in a good position to secure more projects, given its capabilities. However, rising labour and material costs as well as competition, could compress margins. BBR is currently trading at 4.2x FY13F earnings. Maintain BUY with a TP of SGD0.35, based on 5.6x FY13F P/E.
Declares special dividend. BBR declared a dividend of SGD 0.8¢ / share. Including the special dividend of SGD 0.4¢ / share, total dividend for FY12 is SGD 1.2¢ / share. This translates into a yield of 4.4%.
Potential government projects could keep BBR busy. As the government looks to grow Singapore’s population, there are plans for more public housing, schools and other infrastructure spending. BBR has been involved in a number of public projects before and we think it would be able to secure some of the projects in the pipeline. Its current order book stands at SGD 960 Mln (vs SGD 770 Mln a quarter
ago), which is expected to last till 2015. However, the construction sector in Singapore is facing stiff competition, especially from overseas construction companies which are usually part of a bigger consortium. Coupled with the expected rise in labour costs, margins are expected to continue to face downward pressure.
Revenue growth helped by projects in active stage of construction. As some of its projects enter the active phase of construction, the increased billings would help boost revenue in FY13 and FY14. Construction at its Bliss @Kovan property development commenced at 2H12 and is likely to contribute more to revenue in FY13 and FY14.
UNQUOTE
Vested
RBM, Retired Botanic MatSalleh