Favorite Links

Wednesday, July 31, 2013

UOB KH says KSH Holdings has "good earnings growth and visibility for the next 5 years"


We initiate coverage with a BUY with a target price of S$0.71, representing a 29.1% upside. With locked-in sales from its successful property launches, KSH is likely to enjoy good earnings visibility over the next five years.

As an established contractor, KSH continues to replenish its orderbook with consistent contract wins with a comparative favourable margin compared to peers.

Strong earnings and free cash flow (FCF) support KSH as a dividend play with a current dividend yield of 4.5%.

Strong earnings visibility. Through its JVs, KSH has interest in 13 local property development projects.

Based on KSH’s existing (eight launched) projects and current sales, we conservatively estimate KSH to recognise a profit of about S$124.6m (S$0.32/share) over the next five years.

In addition, KSH’s 45% interest in its Beijing property development project, Liang Jing Ming Ju (LJMJ) Phase 4, is expected to contribute very positively to earnings for FY16.

We estimate a profit of S$32m (S$0.08/share) for a fully sold LJMJ, which is expected to be launched by 3Q13.


No comments:

Post a Comment