Kenanga upbeat on Kimlun’s contract wins, maintains ‘market perform’

Kenanga upbeat on Kimlun’s contract wins, maintains ‘market perform’
Business & Markets 2013
Written by Jeffrey Tan of theedgemalaysia.com
Monday, 09 September 2013 11:19

KUALA LUMPUR (Sept 9): Kenanga Research has maintained ‘market perform’ call with unchanged target price (TP) of RM1.93 on Kimlun Corporation shares, after the group’s recent contract wins worth RM325.5 million.

In a note today, the research house said it was pleased with the engineering and CONSTRUCTION [] services provider as it had continually replenished its order book within a short span of time.

Kenanga remarked that while its year to date order book replenishment of c.RM1 billion had far exceeded its FY13 assumptions of RM500 million, it was still within its FY14 assumptions of RM900 million.

“Hence, we are neutral on these contract wins as we expect these projects to only start contributing in earnings from next year onwards, as the contracts were only awarded in 3Q13,” said the Kenanga research team.

The research house said it retained its TP based on an unchanged 9 times of FY14 price earnings ratio while also making no changes to its earnings forecasts.

“In light of its maiden property project in Cyberjaya with an estimated gross development value of RM240 million, we expect some positive contribution from its property division in 2H14,” said Kenaga.

The project thus far had received positive response with 70% take-up rate and lock-in sales of RM108 million, it said.