Towards Financial Freedom

BBR Holdings - Buoyed By Strong Construction Pipeline

kiasutrader
Publish date: Thu, 27 Feb 2014, 11:01 AM
  • BBR's  4Q13  PATAMI  more  than  doubled  to  SGD8.7m,  boosted  by progressive  revenue  recognized  from  Bliss  @  Kovan.  As  the  bulk  of this project's construction will take place in FY14, coupled with a strong orderbook,  FY14  is  expected  to  be  a  good  year.  The  outlook  remains healthy,  backed  by  a  strong  pipeline  of  government  construction projects. Maintain BUY, with a TP of SGD0.35.
  • FY14  to  be  a  good  year.  BBR's  current  orderbook  amounts  to SGD905m, with a good portion expected to be completed in FY14.  On top of that, its 92%-sold Bliss @ Kovan is expected to be 90% completed by end-FY14 (from 28% as at end-FY13), which would boost revenue for the year.
  • Outlook  beyond  FY14  remains  bright.  BBR's  JV  project  -  the executive condominium at Yuang Ching  -  is expected to be launched in 4Q14.  However,  revenue  from  this  development  cannot  be  recognized until  the  project  obtains  temporary  occupation  permit  (TOP),  likely  in 2017. Hence, with the bulk of  Bliss @ Kovan  completed by end-FY14, there  is  likely  to  be  a  dip  in  revenue  from  the  property  development segment  in  FY15.  Revenue  would  likely  come  mainly  from  its construction  projects,  which  are  supported  by  the  company's  healthy orderbook and the pipeline of government projects.
  • Unfazed by challenges.  Construction costs are expected to continue to go up as labour costs increase. Given BBR's project management ability, management is of the view that it would be able to keep margins steady despite the potential challenges.
  • Maintain BUY.  Despite the lumpy nature of BBR's revenue stream, we remain positive on BBR, which has had a good track record of securing government  construction  projects.  It  would,  therefore,  benefit  from  the pipeline of government and related projects, such as the enhancement of the  MRT  network  and  the  building  of  new  terminals  and  runways  at Changi Airport. BBR announced a dividend of SGD0.008/share for FY13, and management expects to be able to sustain this payout.


Source: OSK
Related Stocks
Market Buzz
Discussions
Be the first to like this. Showing 0 of 0 comments

Post a Comment