KSH reported 2QFY13 PATMI of S$9.8m, up a whooping 90% YoY mainly due to increased contributions from the construction business and project recognition from Cityscape@Farrer Park. We judge this set of results to be mostly in line with expectations as 1HFY13 PATMI now made up 46% of our FY13 forecast. We note the pace of profit recognition at Cityscape@Farrer in 2QFY13 (through share of results of associates) was somewhat below expectations – S$2.1m versus an expected S$3.5m-S$4.5m – but this was offset by higher profits from the construction segment. Management also announced an interim dividend of 1.35 S-cents, up 35% from a 1.0 S-cent interim dividend last year. KSH’s order book continues to be healthy at S$375m as of end Sep 12, down 10% QoQ versus S$416m as of end Jun 12. Maintain BUY with an unchanged S$0.50 fair value estimate (50% discount to RNAV).
2QFY13 PATMI up 90% YoY
KSH reported 2QFY13 PATMI of S$9.8m, up a whooping 90% YoY mainly due to increased contributions from the construction business and project recognition from Cityscape@Farrer Park. We judge this set of results to be mostly in line with expectations as 1HFY13 PATMI now made up 46% of our FY13 forecast. We note the pace of profit recognition at Cityscape@Farrer in 2QFY13 (through share of results of associates) was somewhat below expectations – S$2.1m versus an expected S$3.5m-S$4.5m – but this was offset by higher profits from the construction segment. 2QFY13 topline came in at S$57.3m, up 5.4% YoY again mostly from increased construction revenue but offset by lower development property recognition. Management also announced an interim dividend of 1.35 S-cents, up 35% from a 1.0 S-cent interim dividend last year.
Healthy sales at residential projects
Cityscape@Farrer Park, a key project for KSH accounting for an estimated 64% of total gross profits, is about 61% (152 out of 250 total units) sold to date, up significantly from 22% sold as of end Jun 2012. KSH’s newly launched project, Sky Green, also turned in a strong performance with ~80% of units sold (140 out of 176 total units) at average price levels around S$1.5k psf. In addition, we saw sales at the Boutiq creep up from 72% (end Jun 12) to 80% (end Sep 12), and Lincoln Suites from 81% to 84% sold. As of end Sep 12, the Palacio was also 80% sold. Looking ahead to CY13, we are likely to see launches at Hong Leong Garden Shopping Centre, Seletar Garden and 11 King Albert Park.
Maintain BUY
KSH’s order book continues to be healthy at S$375m as of end Sep 12, down 10% QoQ versus S$416m as of end Jun 12. We see management actively seeking order book replenishment, likely in its niche private residential construction space. Its balance sheet remains healthy at 34% net gearing and S$50m cash. Maintain BUY with an unchanged S$0.50 fair value estimate (50% discount to RNAV).
KSH reported 2QFY13 PATMI of S$9.8m, up a whooping 90% YoY mainly due to increased contributions from the construction business and project recognition from Cityscape@Farrer Park. We judge this set of results to be mostly in line with expectations as 1HFY13 PATMI now made up 46% of our FY13 forecast. We note the pace of profit recognition at Cityscape@Farrer in 2QFY13 (through share of results of associates) was somewhat below expectations – S$2.1m versus an expected S$3.5m-S$4.5m – but this was offset by higher profits from the construction segment. 2QFY13 topline came in at S$57.3m, up 5.4% YoY again mostly from increased construction revenue but offset by lower development property recognition. Management also announced an interim dividend of 1.35 S-cents, up 35% from a 1.0 S-cent interim dividend last year.
Healthy sales at residential projects
Cityscape@Farrer Park, a key project for KSH accounting for an estimated 64% of total gross profits, is about 61% (152 out of 250 total units) sold to date, up significantly from 22% sold as of end Jun 2012. KSH’s newly launched project, Sky Green, also turned in a strong performance with ~80% of units sold (140 out of 176 total units) at average price levels around S$1.5k psf. In addition, we saw sales at the Boutiq creep up from 72% (end Jun 12) to 80% (end Sep 12), and Lincoln Suites from 81% to 84% sold. As of end Sep 12, the Palacio was also 80% sold. Looking ahead to CY13, we are likely to see launches at Hong Leong Garden Shopping Centre, Seletar Garden and 11 King Albert Park.
Maintain BUY
KSH’s order book continues to be healthy at S$375m as of end Sep 12, down 10% QoQ versus S$416m as of end Jun 12. We see management actively seeking order book replenishment, likely in its niche private residential construction space. Its balance sheet remains healthy at 34% net gearing and S$50m cash. Maintain BUY with an unchanged S$0.50 fair value estimate (50% discount to RNAV).
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