KSH’s 1QFY14 PATMI increased 165% YoY to S$11.4m due to stronger contributions from both the property development and construction business segments. 1QFY14 PATMI now constitutes 24% of our full year forecast and, this being so, we judge this set of results to be in line with expectations. The group’s order book stands at S$402.0m as at end Jun 2013 which we view to be a relatively healthy level. We continue to look forward to KSH’s 45% Beijing condo project beginning sales this year which could be significant for KSH’s earnings profile into FY15. In Singapore, new launches at NeWest and KAP Residences have shown firm performances to date; 85 out of a total of 136 units at NeWest have been sold at a median price of S$1,399 psf and at KAP Residences, 140 out of 142 units sold for a median price of S$1,789 psf. Maintain BUY with an unchanged fair value estimate of S$0.73.
1QFY14 PATMI up 165% YoY to S$11.4m
KSH’s 1QFY14 PATMI increased 165% YoY to S$11.4m due to stronger contributions from both the property development and construction business segments. Share of results of associates increased by S$6.5m YoY to S$7.8m in 1QFY14 as increasing construction progress from development property projects at the associates/JV levels converted into heavier bottomline contributions. 1QFY14 PATMI now constitutes 24% of our full year forecast and, this being so, we judge this set of results to be in line with expectations. Topline for the quarter came in at S$83.3m, up 51% YoY, mostly due to higher construction revenues and a larger recognition from Lincoln Suites.
Order book outlook remains stable
The group’s order book stands at S$402.0m as at end Jun 2013 which we view to be a relatively healthy level. We understand management is actively seeking more contracts. In 2013 to date, the group replenished its order book by S$233m – higher than the S$163m total last year. From our conversations with management, we believe the outlook for the construction sector and the scope for order book replenishment remain stable given the pipeline from residential project launches over the last six months. In terms of new contracts, the group would also pay greater attention to public sector constuction projects over the next two quarters to strengthen their track record in that space.
Maintain BUY at unchanged fair value estimate of S$0.73
We continue to look forward to KSH’s 45% Beijing condo project beginning sales this year which could be significant for KSH’s earnings profile into FY15. In Singapore, new launches at NeWest and KAP Residences have shown firm performances to date; 85 out of a total of 136 units at NeWest have been sold at a median price of S$1,399 psf and at KAP Residences, 140 out of 142 units sold for a median price of S$1,789 psf. Maintain BUYwith an unchanged fair value estimate of S$0.73.
KSH’s 1QFY14 PATMI increased 165% YoY to S$11.4m due to stronger contributions from both the property development and construction business segments. Share of results of associates increased by S$6.5m YoY to S$7.8m in 1QFY14 as increasing construction progress from development property projects at the associates/JV levels converted into heavier bottomline contributions. 1QFY14 PATMI now constitutes 24% of our full year forecast and, this being so, we judge this set of results to be in line with expectations. Topline for the quarter came in at S$83.3m, up 51% YoY, mostly due to higher construction revenues and a larger recognition from Lincoln Suites.
Order book outlook remains stable
The group’s order book stands at S$402.0m as at end Jun 2013 which we view to be a relatively healthy level. We understand management is actively seeking more contracts. In 2013 to date, the group replenished its order book by S$233m – higher than the S$163m total last year. From our conversations with management, we believe the outlook for the construction sector and the scope for order book replenishment remain stable given the pipeline from residential project launches over the last six months. In terms of new contracts, the group would also pay greater attention to public sector constuction projects over the next two quarters to strengthen their track record in that space.
Maintain BUY at unchanged fair value estimate of S$0.73
We continue to look forward to KSH’s 45% Beijing condo project beginning sales this year which could be significant for KSH’s earnings profile into FY15. In Singapore, new launches at NeWest and KAP Residences have shown firm performances to date; 85 out of a total of 136 units at NeWest have been sold at a median price of S$1,399 psf and at KAP Residences, 140 out of 142 units sold for a median price of S$1,789 psf. Maintain BUYwith an unchanged fair value estimate of S$0.73.
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