MENU

3 Things Investors Should Know about Lian Beng Group Ltd

Lian Beng Group Ltd (SGX: L03) is a home-grown construction, property development, and civil engineering company. The company also provides engineering services, supplies ready-mix concrete, and trains foreign construction labour, amongst other activities.

The past two years have not been kind to Lian Beng’s stock as its price has fallen by nearly 30%. Here are three things about Lian Beng that investors or potential investors in the company may want to know:

1. Latest results

lian-beng-revenue-and-profit-table
Source: Company’s earnings release

As we can see from the table above, Lian Beng has reported significantly weaker results in its latest quarter.

The decline in the company’s top-line is due to lower revenue generated from its construction and ready-mixed concrete business segments.  

Lian Being’s share of results of associates and joint ventures also declined $20.5 million to $8.0 million mainly due to the completion of some property development projects such as NEWest and the Midtown and Midtown Residences in the last financial year.

Due to the factors mentioned above, Lian Beng’s net profit is down by close to 60% year-on-year.

2. History of growing dividends

Lian Beng has continuously paid an annual dividend since at least its fiscal year ended 31 May 2006 (FY2006). Over the years, the company’s dividend per share has grown from 0.22 cents in FY2006 to 3.0 cents in FY2016, according to S&P Global Market Intelligence.

At Lian Beng’s latest share price of $0.455, it has a historical dividend yield of 6.5% (based on its dividend for FY2016).

3. The presence of a substantial shareholder

A large chunk of Lian Beng’s shares are controlled by the Ong Pang Aik and his family. Ong is currently Lian Beng’s chairman and managing director. As of 18 August 2016, the Ong family collectively hold 28.06% of Lian Beng’s shares and is the company’s largest single shareholder.

Given that Ong Pang Aik is Lian Beng’s leader and owns a large number of shares in the company, he and his family members have a significant influence over the long-term strategy for the company.

It is thus important that minority shareholders are comfortable with having Ong at the helm.

If you like what you've seen, you can get even more investing insights and analyses from The Motley Fool's weekly investing newsletter Take Stock Singapore. It's FREE, so do check it out here.

Also, like us on Facebook to follow 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 Lawrence Nga doesn’t own shares in any companies mentioned.