Company Analysis:
Jianhong Group Holdings is mainly engaged in the supply of foundation services in Hong Kong. The foundation projects undertaken mainly include ELS project, pile cap construction, rock steel pile, I-steel pile, large bored pile and micro-pile. The Group undertakes foundation projects in the public sector, including building and infrastructure-related projects, as well as in the private sector, mostly building-related projects. During the three financial years ended March 2015 and the six months ended September 2015, income from foundation works accounted for all income generated by the Group from Hong Kong.
The Group undertakes six projects under construction and two projects that have not yet started, with an estimated total contract value of about $236 million as at December 2015. Projects under construction and projects that have not yet begun on 31 December 2015 are expected to be completed between January 2016 and April 2017. According to the report, the group's income for the year ended March 2015 accounted for about 1.8% of the total income of the foundation industry in Hong Kong in 2014.
The Group's customers include the main contractor of the construction industry in Hong Kong, which contracts foundation works to the Group on a single project basis. In some cases, the Group is directly employed by project employers who are property developers / owners in the public sector or the private sector in Hong Kong on a single project basis. There are more opportunities for the Group to undertake foundation projects in the private sector, but it does not intend to shift its overall focus to private projects.
The net tangible assets per share is HK $0.41-0.45, with a price-to-earnings ratio of 2015 times earnings.
Subscription suggestions:
Jianhong Group holding's main business is Hong Kong local foundation construction. It is the seventh Hong Kong infrastructure company listed on the main board in the past year (the rest are Yihe Holdings 1662, Jianye Jianrong 1556, Qianjin Holdings 1499, Acer 1718, Manulife Holdings 2193, present Heng Construction 1500). By contrast, the overall market capitalization of Jianhong Group is the smallest, and the subscription proposal is cautiously optimistic.
