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Company background: Wee Hur is a key player in the construction industry with a track record of over 30 years. The company is a BCA A1 builder that takes on a wide range of construction projects. It recently added property development to its portfolio and is primarily engaged in industrial projects.
Recent development: Just last month, Wee Hur secured yet another HDB project worth $109m following a successful tender for a $65m HDB contract in January.
Key ratios…
Price-to-earnings: 8.0x
Price-to-NTA: 1.79x
Dividend per share / yield: 1.3 cts / 4.4%
Net debt per share: $0.02
Share price S$0.305
Issued shares (m) 647.7
Market cap (S$m) 197.5
Free float (%) 61%
Recent fundraising activities Nov 2009: 1-for-2 warrants issue at $0.01
Financial YE December 31
Major shareholders GSC Holdings – 39%
YTD change +7.6%
52-wk price range S$0.25-0.385
Our View:
Earnings to cross $30m this year. Given its strong orderbook and the 100% take-up rate for its industrial project, Harvest@Woodlands, Wee Hur’s earnings look set to break the $30m mark this year. Construction projects contributing to revenue will be mainly JCube and Trilight, worth an aggregate contract value of $233m, and an estimated $170m in sales proceeds from Harvest @Woodlands to be progressively recognised.
Kaki Bukit site. The company will soon launch its latest industrial project at Kaki Bukit, known as Premier@Kaki Bukit. We understand that the 483 units will be sold at an average of $400 psf, compared to the estimated development cost of $270 psf, potentially generating more than $50m in net profit.
More HDB projects expected. Wee Hur will continue to tender for HDB projects. In a tender exercise last month for a 1,400-unit HDB project in Yishun, its bid was just 4% higher than the lowest bid. The public sector construction demand arising from new HDB flats is expected to be strong on the back of an average 1,800 new flats to be launched every month.
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