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Stocks In Focus SG (Ley Choon, EMS, ISDN)-25/09/13
Ley Choon Wins $30.6m Worth Of Contracts
Four contracts worth some $30.6 million have been won by Ley Choon Group Holdings. The first two contracts ($23.6 million) were awarded by PowerGas, which involved laying and decommissioning of high pressure gas transmission pipelines from Jalan Bahar to Old Choa Chu Kang Road and from Old Choa Chu Kang Road to Choa Chu Kang Way. The third contract (approximately $2.2 million) was from Jurong Town Corporation for final premix surfacing, reinstatement and ancillary works at Tuas South Lane, Woodlands Close and Yishun Industrial Street. Worth some $4.8 million, the fourth deal was awarded by ILJIN Electric Co for the supply and installation of power cables, auxiliary cables and accessories for SP PowerAssets.
Significance: Ley Choon aims to continue to leverage on growth opportunities afforded by the increase in public infrastructure projects be it pipes, roads and cables, to expand its business and enhance its brand as a premier partner for public infrastructure projects.
US$36m Contract Win For EMS
Catalist-listed company EMS Energy, has received a contract to build a derrick equipment set for a tender assisted drilling rig for US$36 million. The contract was awarded by its major shareholder Koastal Industries and marks the biggest contract win for EMS’s subsidiary EMS Energy Solutions to date. This contract win will potentially lead to two more contracts from Koastal Industries for the supply and construction of like-sized derrick equipment sets. Chief executive officer and executive chairman Ting Teck Jin said that the first contract positions the group for bigger and higher-margin projects going forward. As drilling activities are in great demand, EMS intends to pursue several other similar opportunities at the moment. According to Markets and Markets, Asia Pacific, with its thriving economies and rapidly increasing energy consumption, is expected to experience the highest revenue growth during this time.
Significance: The first project will boost EMS’s order book to about $67.8 million from $18.4 million. EMS expects to begin financial recognition of the first contract from 4Q13, with the bulk of the contributions and financial impact kicking in from FY14.
ISDN Pumps More Muscles Into Hydropower
ISDN Holdings, integrated solutions provider has acquired 80 percent stakes in two more Indonesian hydropower-related businesses for a total of US$1.9 million. Funded by the company’s reserves, the acquisitions are the latest in a string of purchases made by ISDN to expand into Indonesia’s hydropower production sector. The two companies, PT Alabama Energy and PT Prima Paluta Energy, are companies developing mini hydroelectronic power plants in Sumatra, Indonesia. Sumatra is a big Indonesian island which offers huge opportunities in energy production as the territory ramps up its electricity sources in tandem with population and economic growth.
Significance: Although ISDN’s current major revenue generator comes from its motion control segment, it has been actively diversifying into the Asian energy and power business recently. Based on the quick moves into the energy scene, it is possible that more revenue contribution will be seen coming from such energy segments in time to come.
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