kimeng: 21 apr Cresbld ( buy)

2008 is a year of consolidation
Crest Builder Holdings (CBH)'s revenue is expected to rise by over 20%
in 2008, thanks to higher construction revenue which offset lower
property development revenue. However, core pretax profit is projected
to fall by 33% in 2008 due to the lower property & construction profits
and the absence of fair value gains. Adjusted for a fair value gain of
RM38.5m arising from the revaluation of Three Two Square, CBH reported a
core pretax profit of RM46.8m in 2007.

Bad news in the price
Valuations are undemanding, with FY08 basic PER of 6x and dividend yield
of over 6%. The risk is further price hike(s) for building materials.