Excerpts from OSK-DMG analysts' report

Analysts: Sarah Wong & Terence Wong, CFA

Lian Beng said its 38%-owned associate company, Millenium Land Pte Ltd will, together with its joint-venture partner, Billion Land Pte Ltd, dispose of 122 Middle Investment Pte Ltd - the vehicle that holds Midlink Plaza on 122 Middle Road - for SGD270m. We expect Lian Beng to reap a FY15F post-tax gain of SGD8.45m from this sale. We lift our FY15F earnings by 14% to SGD69.0m. Maintain BUY based on a RNAV derived TP SGD1.17. 

OngPangAik_agm12Ong Pang Aik, executive chairman of Lian Beng Group.
NextInsight file photo.
SGD8.45m one-off gain post tax from on potential sale of Midlink Plaza in FY15. Lian Beng's 38%-owned associate, Millenium Land Pte Ltd, owns 50% of 122 Middle Investment Pte Ltd, which is a vehicle that holds the property formerly known as Midlink Plaza (on 122 Middle Road).

The proposed disposal for SGD270m, with carrying cost and construction cost of SGD146.4m and SGD70m, will yield a post-tax gain of SGD44.5m on the entire property. Lian Beng's effective stake of 19% in the property would translate into an SGD8.5m gain for FY15. 

Raising FY15F earnings from SGD60.5m to SGD69.0m. With this one-off gain in the bag, we raise our FY15F earnings by c. SGD8.5m, equivalent to a 14% increase. 

Look forward to future catalysts. Along the same vein, Lian Beng – through its 32%-owned associated company Epic Land Pte Ltd, is purchasing 92.8% of the aggregate strata area in Prudential Tower from Keppel REIT for SGD512m. Assuming an ASP of SGD2,600psf on units with strata titles, we expect Lian Beng to see a c.SGD23.3m profit boost after tax. As the company is currently in the process of obtaining approval for the deal, we have yet to factor in any earnings from it.


Maintain BUY, with RNAV-derived TP of SGD1.17.
Lian Beng is currently trading at an undemanding 6.3x FY15F P/E and 0.84x FY15F P/BV. Our SOP-based TP for the stock is SGD1.17. Its upcoming catalysts in the form of the sale of strata-titled units at Prudential Tower, profit contribution from a new asphalt pre-mix plant and a granite concession may potentially unlock value in the company. 

Recent story:  LIAN BENG: Ups dividend 80% to 2.25ct on profit growth of 19%

You may also be interested in:


#1 Frank Lim 2016-09-11 00:12
How's Valuation based on current price
What is P/E, P/B, NTA, Debt, Cash in Hand?

You have no rights to post comments

Counter NameLastChange
AEM Holdings3.280-
Avi-Tech Electronics0.250-
Best World1.7100.030
Broadway Ind0.091-0.001
China Sunsine0.395-
Delfi Limited1.130-
Food Empire1.090-
Fortress Minerals0.310-
Geo Energy Res0.280-
GSS Energy0.027-0.001
Hong Leong Finance2.4900.010
Hongkong Land (USD)3.2000.010
ISDN Holdings0.3350.005
IX Biopharma0.0440.001
Jiutian Chemical0.026-
KSH Holdings0.3000.010
Leader Env0.052-0.001
Medtecs Intl0.1410.001
Nordic Group0.400-
Oxley Holdings0.100-
REX International0.164-0.002
Sinostar PEC0.135-
Southern Alliance Mining0.660-0.010
Straco Corp.0.470-
Sunpower Group0.2500.010
The Trendlines0.091-
Totm Technologies0.038-
Uni-Asia Group0.900-0.005
Wilmar Intl3.580-0.040
Yangzijiang Shipbldg1.5100.020

We have 728 guests and no members online

rss_2 NextInsight - Latest News