Alliance upgrades Kimlun to 'buy' on positive outlook

Alliance upgrades Kimlun to 'buy' on positive outlook
Business & Markets 2014
Written by Ahmad Naqib Idris Adzman Shah of theedgemalaysia.com
Friday, 21 March 2014 13:07

KUALA LUMPUR (Mar 21): Alliance Research Sdn Bhd upgraded Kimlun Corp Bhd shares to “buy” from “hold” on expectation that the current financial year ending December 31, 2014 (FY14) will be a rebound year for the firm.

This follows a disappointing FY13, according to Alliance's note today. Alliance however maintained its target price for the stock at RM1.80.

The research house expects better performance from the group’s three divisions, namely construction, manufacturing and property.

“We expect Kimlun’s construction division to stage a rebound this year, driven by the record RM1.2 billion worth of new jobs secured last year, which should start showing a more meaningful contribution,” said Alliance.

On Kimlun's manufacturing division, Alliance said Kimlun had an orderbook of RM300 million of which 58% comprised segmental box girders and tunnel-lining segments for the Klang Valley MRT project.

Kim Lun which will manufacture tunnel-lining segments for the Thompson Line of the Singapore MRT, also plans to manufacture segmental box girders for upcoming elevated highways in Malaysia's Klang Valley.

Contribution from the group’s property segment is also expected to increase in FY14 as construction of The Hyve picks up.

“Kimlun’s maiden property development, The Hyve in Cyberjaya comprising SOHO units has received take up of 70% since its launch about a year ago.

“Unbilled sales for The Hyve now stands at RM125 million,” said Alliance

Kimlun had also recently acquired 41 detached lots in Seksyen U10 Shah Alam for the development of bungalows with a gross development value of at least RM82 million.