Kingsmen Creatives

Kim Eng on 13 Aug 2012

1st half results within expectations. In 1H12, Kingsmen Creatives recorded sales of SGD117.8m, up 26.9% YoY, and net profit of SGD7.2m, up 20.4% YoY attributable to a successful delivery of exhibitions and events. The group declared an interim dividend of 1.5cents/share.

Which segment outperformed? In 2Q12, Exhibition and Museum section continues to outperform, achieving sales of SGD30.5m, up 43.5% YoY. The group delivered projects at Art Stage 2012, Singapore Airshow 2012, Asia Pacific Maritime 2012 and various other events. Alternative Marketing segment also saw its sales more doubled to SGD2.7m. This is contributed by its services for marketing and promotional events from Asia Pacific Breweries, BMW Asia and CNB Singapore.

Strong orderbook of SGD238m for FY12. The group is making good progress on itsoverseas project works in China and Hong Kong, while works at Universal Studios Singapore have also commenced. The group is confident in securing sizable projects in theme parks in China which will commence in 2013. As of 10th August, the group has been awarded contracts of approximately SGD238m for completion in FY2012.

MICE industry demand high on back of improving convention facilities. According to Singapore Tourism Board, Singapore has maintained its position as Asia’s top convention city for the 10th consecutive year in the International Congress and Convention Association.Venue operators are also differentiating themselves by offering additional services and introducing new or improved spaces to attract companies. In 2012, Singapore has added 12 new world congresses to its line-up of events from 2012-16.

Maintain BUY, TP at SGD0.85. We maintain our target price of SGD0.85, on a SOTP valuation, implying 9.4x FY12F PER. Reiterate BUY.