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Construction sector set to improve the most
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14-Feb-2007 15:56
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This is a recap of Lian Beng's forays and achievements. Lian Beng is a credible brand name and very visible to the investing public e.g. in the construction contracts that have been awarded iin Dec 06. A whopping $159 million dollars worth just in 1 month alone!
The benefit of it being so visible with an excellent track record is that the upcoming IR tender evaluation committees would strongly consider Lian Beng when awarding their contracts. Also note that Lian Beng is in the running to bid the IR construction tender, a feat that not many other construction companies can boast of!  ====================================
Lian Beng said its order book may rise 20% to about $320 million over the next three years after it won home reconstruction contracts in the Maldives. The growth rate lags that of other building firms such as Yongnam as the construction sector recovers after a prolonged downturn. Lian Beng, which builds high-rise apartments in both the upmarket and mid-market sectors, is building 600 houses in the Maldives to replace homes destroyed by the Dec. 26, 2004 tsunami. Executive Chairman Ong Pang Aik told Reuters that his forecast was conservative as he did not want to trigger a profit warning if it turned out that the firm could not meet its target. "We are looking regional in the next three to five years. If there are good opportunities in other areas, we will definitely look into it," said Ong Lay Koon, Ong's sister, who is also a director of the firm. Lian Beng shares rose to close at a six-year high following Ong's comments. Lian Beng, through a joint venture with a private firm in the Maldives, won a US$17.4 million contract to build the houses from the International Red Cross and is in talks to build two schools in the Maldives, the executive chairman said. He added that the firm was in talks to build several more infrastructure projects in the Maldives and low-rise residential apartments in Papua New Guinea. Ong forecast the firm's total revenue would rise by about 20% to around $230 million within the next three to five years. Ong is the eldest son in a family of 11 children and has been with the firm since it was founded by his father in 1973. Today, the firm has a market capitalisation of about US$97.5 million. Listed in 1999, its shares have surged over 50% since the start of the year, making it the third-best performer in the construction index, after BBR and Yongnam. Ong said Lian Beng aims to secure more construction projects in both domestic and overseas markets. The firm has been invited to submit a bid to build part of Marina Bay IR-- the world's most expensive gambling resort with an investment amount of US$3.2 billion by Las Vegas Sands. Lian Beng, which diversified into the energy sector in 2004, also said it plans to secure concessions to operate two coal mines, in the province of Kalimantan in Indonesia. The firm is carrying out overburden removal works in Kalimantan, which involves excavating the top soil above the coal, a necessary part in the coal-mining process. The $362 million, five-year contract to undertake overburden removal works is part of a joint venture with Manhattan Resources in Indonesia. While the firm's overseas businesses accounts for some 16% of revenues, Ong said he expects this would grow to 20% within three years. |
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