MENU

The Industrial Sector – Constructions and Materials

Construction logo In the first article of this Sector Connect series, we gave an overview of the Industrials sector. In this second article, we take a look at the “Construction & Materials” supersector.  This supersector consists of 2 subsectors – Building Materials & Fixtures and Heavy Construction according to Industrial Classification Benchmark (ICB).

There are a total of 64 Construction & Materials companies listed on SGX. Twenty-four of them fall under the Building Materials & Fixtures subsector and while the rest are under the Heavy Construction subsector.

Companies under the Building Materials & Fixtures subsector are producers of materials used to construct buildings such as cement and other aggregates, wooden beams and frames. On the other hand, companies under the Heavy Construction subsector are engaged in the construction of commercial or residential buildings and other infrastructure.

Let’s take a look at three of the companies involved in these subsectors. The first company is under the Building Materials & Fixtures subsector and the other two are under the other Heavy Construction subsector.

Pan-United (SGX: P52) is a leading supplier of cement and ready mixed concrete. It has been involved in various projects in Singapore such as the construction of Mass Rapid Transit (MRT) Circle Line, Downtown Line and Tuas West extension, Kallang-Paya Lebar Expressway, Marina Coastal Expressway, Gardens by the Bay and public housing.

Chip Eng Seng (SGX:C29) has established itself in both the public and private housing construction locally. It has completed notable project such as The Pinnacle @ Duxton, The Parc @ West Coast Road/Walk and Oasis @ Elias Road.

OKP (SGX:5CF) is a home-grown infrastructure and civil engineering company specialising in the construction of expressways, flyovers, vehicular bridges, urban and arterial roads. It recently bagged three awards at the Singapore Corporate Awards 2013 held last month. It won the Best Annual Report Award (Gold), Best Managed Board Award (Silver) and Best Investor Relations Award (Bronze) under the ‘Companies with less than $300 million in market capitalisation’ category.

Company

Market Cap (S$’ M)

Net Profit Margin (%)

Return on Equity (%)

PE

Dividend Yield (%)

Pan-United Corporation Limited (SGX: P52)

475.4

6.0

13.5

11

4.7

Chip Eng Seng Corporation Limited (SGX: C29)

427.9

13.2

17.6

5.2

6.1

OKP Holdings Limited (SGX: 5CF)

118.7

11.8

12.8

9.5

3.9

(As of 2nd September 2013)

The list presented above is certainly not exhaustive. There are 61 other companies under this supersector that investors might fancy. With Singapore set to undergo a construction boom, some companies in this sector may benefit greatly.

In the next article of our sector connect series, we will look at the other supersector in this industry – Industrial Goods and Services. You can find it here.

Click here now  for your   FREE   subscription to   Take Stock  Singapore, The Motley Fool’s free investing newsletter. Written by   David Kuo ,   Take Stock Singapore   tells you exactly what’s happening in today’s markets, and shows how you can GROW your wealth in the years ahead.  

Like us on Facebook   to keep up-to-date with our latest news and articles. The Motley Fool’s purpose is to help the world invest, better.

The information provided is for general information purposes only and is not intended to be personalised investment or financial advice.  Motley Fool Singapore contributor Sudhan P doesn’t own shares in any companies mentioned.