Kimlun announced that it has secured another two contracts
from SP Setia and Keck Seng Bhd with a total contract sum of RM151.6m. The
first project was awarded by SP Setia for the construction works of service apartments
and ancillary buildings in Johor Bahru (contract value of RM115m) and the
second project was from Keck Seng Bhd for the construction of 244 units of houses
in Johor Bahru with a contract value of RM36.9m. We are maintaining our
earnings forecasts at this juncture for Kimlun as we had factored in these
contract values in its RM550m annual order book replenishment. The company’s
outstanding order book now stands at around RM1.6b and we continue to maintain
our OUTPERFORM recommendation on Kimlun based on an unchanged target price of
RM1.93 based on 8.0x PER pegged on its FY12 EPS.
Series of housing
construction projects. To recap,
Kimlun was awarded a construction project worth RM68.3m by Dynasty View SB
earlier this month. Yesterday, Kimlun nailed another two new projects from (1)
SP Setia for the construction of apartments and ancillary buildings in Johor
Bahru worth RM114.7m, expected to complete by February 2014 and (2) Keck Seng
Bhd for the construction of 244 houses
in Johor Bahru worth RM36.9m which would see an earlier completion around
September 2013.
Order book stands at
RM1.6b. Kimlun’s outstanding order book
currently stands at RM1.6b and with its recent contract awards secured, this
will provide earnings visibility for the group until 2015. Apart from
successfully securing projects from the Johor region, management has reiterated
that they are also actively looking for more construction opportunities under
the ETP initiative for the Greater KL project.
Singapore market. Management has previously guided that there
would be plenty of opportunities in Singapore as the Singapore government has
allocated approximately SGD60b worth of rail line and complex expressway
projects over the next 10 years. We believe that given Kimlun’s strong track
record, it would be a strong contender for the supply of precast products to the
Singapore market. To recap, SPC Industries is a subsidiary of Kimlun and it has
managed to secure approximately 50% of the total TLS (tunnel lining segment)
supply orders for the Downtown Line project in Singapore.
We continue to
maintain our OUTPERFORM recommendation on Kimlun with an unchanged Target Price
of RM1.93 based on 8.0x PER pegged on its FY12 EPS. There are also no changes to our FY12-13
earnings forecasts at this juncture.
Source: Kenanga
No comments:
Post a Comment