Excerpts from latest analyst reports.....
CIMB sticks out its neck and highlights stock picks for 2H
Don’t chop our heads. We stick our heads out (well, that’s what we are paid to do) and re-iterate our OUTPERFORM/BUY calls on those stocks we cover that have fallen the most since 31 March and still retain the most upside to our target price.
No doubt we are in a “Sell in May and go away” period now and the scuppering of QE2 on 30th June will make markets weak in the stomach. But then, what after “go away”? Do investors/traders/punters not come back to the stockmarket?
We doubt you have seen the last of them. So, size up our picks and you maybe looking at a fruitful second half.
Kim Eng Research says Koon trades at only 3.3X earnings
Analyst: Rohan Suppiah
Earnings to grow. Koon’s recent order flow demonstrates its excellent positioning in the Singapore construction industry. In March, the company secured a $15.25m contract to construct roads, drains, sewers and earthworks at Tampines Logistics Park. This award brings its pure construction orderbook to $74.0m. In April, it won new precast projects with an approximate contract value of $16.3m in total for public housing projects. Its precast orderbook currently stands at $53.2m.
Cheap by any measure. Koon is undervalued relative to its peers, and trades at only 3.3x. A simple re-rating to sector average PER would boost its stock price by over 60%. Its low trading liquidity has also improved somewhat after the recent 1-for-1 stock split.
DMG & Partners has an 'overweight' on construction sector, expects sustained demand
Analyst: Selena Leong
We expect a sustained level of construction demand within the next few years, with the Building and Construction Authority projecting construction demand to hit S$22-28b in 2011 and S$19-26b for 2012 and 2013 against S$25.7b in 2010. Thus, we maintain our overweight call on the sector.
Within the construction industry, we like BBR (BUY, TP S$0.52), CSC (BUY, TP S$0.19), Kian Ann Engineering (BUY, TP S$0.31), KSH (BUY, TP S$0.31) and Lian Beng (BUY, TP S$.0.67).