Hock Lian Seng

Added some recently and my average purchase price becomes SGD0.265.

Despite construction stocks being in a cyclical sector, HLS is somewhat mitigated by taking on government projects with the status of being a grade A1 contractor in the BCA civil engineering cat (I see this as a kind of economic moat for HLS where their "favoured status" should assure them a fair share of the pie for the foreseeable future). 

Recently it just clinched a 100 million Changi Airport project.
And only just over the weekend, it added to its order book a 220 million MRT project.
Cool... These news gives me some assurance over its earnings predictability for coming few years.

I also like HLS's strong balance sheet, wide gross profit margins (seem quite good at controlling their costs, especially in the difficult construction sector, rising labour & other costs can be quite tricky) and its high & consistent dividend pay-out. This year a DPS of 1.8 cents was declared.  This translate to a close to 7% dividend yield and the dividend pay-out ratio is less than 40% (likely sustainable given its track record).

With PE at 6 (should be less than 6 if we consider the two new projects) and at around NAV, while this is not a growth stock, HLS looks undervalued at 26.5 cents and an excellent income generator over the long term.  I am also hopeful for a bump up to 2 cents DPS in near future if they continue to do well.