KSH reported 4QFY13 PATMI of S$14.0m, up 85% YoY mostly due to an increase in profit contributions from development projects held by its associates and JVs. On a full year basis, FY13 PATMI is S$36.3m which increased a strong 98%. We judge this to be somewhat above our expectations (our FY13 PATMI forecast is S$30.7m) as the pace of revenue recognition at JV development projects came in faster than anticipated. Management proposed a final dividend of 1.15 S-cents per share. Likely catalysts ahead includes major pipeline launches at Hong Leong Garden (NeWest), King Albert Park and Seletar Garden which would all likely take place this year. In China, KSH’s 45% Beijing condo project could also begin sales this year. We view a potential firm performance at this project to be significant for KSH’s earnings profile which could sustain earnings growth into FY15 by contributing an estimated S$23m net earnings upon TOP. Maintain BUY with an unchanged fair value estimate of S$0.73.
A strong year of earnings
KSH reported 4QFY13 PATMI of S$14.0m, up 85% YoY mostly due to an increase in profit contributions from development projects held by its associates and JVs. On a full year basis, FY13 PATMI is S$36.3m which increased a strong 98%. We judge this to be somewhat above our expectations (our FY13 PATMI forecast is S$30.7m) as the pace of revenue recognition at JV development projects came in faster than anticipated. Topline for the year increased 42% to S$206.1m mostly due to strong contributions from the construction segment, which rose S$60.9m to S$206.3m. Management proposed a final dividend of 1.15 S-cents per share – in line with our expectations – which brings the total dividend payout for FY13 to 2.5 S-cents per share.
Still looking to strengthen order book
The order book currently stands at S$446.0m which we view to be healthy and we understand management is actively in the midst of seeking more contracts. In 2013 to date, order book replenishment now cumulates to S$233m – already exceeding the S$163m total last year. Construction contracts won include Q Bay Residences, a JTC district cooling system building and its 45%-owned condominium development project in Beijing, Liang Jing Ming Ju Phase 4 (LJMJ).
Maintain BUY at unchanged S$0.73
Likely catalysts for the share price includes major pipeline launches at Hong Leong Garden (NeWest), King Albert Park and Seletar Garden which would all likely take place this year. In China, KSH’s 45% Beijing condo project could also begin sales this year. We view a potential firm performance at this project to be significant for KSH’s earnings profile which could sustain earnings growth into FY15 by contributing an estimated S$23m net earnings upon TOP. Maintain BUY with an unchanged fair value estimate of S$0.73. Our model already accounts for accretion from LJMJ into the property segment’s RNAV and use a 5x PE multiple to value the construction segment, in line with peers trading at 5-7 times.
KSH reported 4QFY13 PATMI of S$14.0m, up 85% YoY mostly due to an increase in profit contributions from development projects held by its associates and JVs. On a full year basis, FY13 PATMI is S$36.3m which increased a strong 98%. We judge this to be somewhat above our expectations (our FY13 PATMI forecast is S$30.7m) as the pace of revenue recognition at JV development projects came in faster than anticipated. Topline for the year increased 42% to S$206.1m mostly due to strong contributions from the construction segment, which rose S$60.9m to S$206.3m. Management proposed a final dividend of 1.15 S-cents per share – in line with our expectations – which brings the total dividend payout for FY13 to 2.5 S-cents per share.
Still looking to strengthen order book
The order book currently stands at S$446.0m which we view to be healthy and we understand management is actively in the midst of seeking more contracts. In 2013 to date, order book replenishment now cumulates to S$233m – already exceeding the S$163m total last year. Construction contracts won include Q Bay Residences, a JTC district cooling system building and its 45%-owned condominium development project in Beijing, Liang Jing Ming Ju Phase 4 (LJMJ).
Maintain BUY at unchanged S$0.73
Likely catalysts for the share price includes major pipeline launches at Hong Leong Garden (NeWest), King Albert Park and Seletar Garden which would all likely take place this year. In China, KSH’s 45% Beijing condo project could also begin sales this year. We view a potential firm performance at this project to be significant for KSH’s earnings profile which could sustain earnings growth into FY15 by contributing an estimated S$23m net earnings upon TOP. Maintain BUY with an unchanged fair value estimate of S$0.73. Our model already accounts for accretion from LJMJ into the property segment’s RNAV and use a 5x PE multiple to value the construction segment, in line with peers trading at 5-7 times.
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