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HLIB Research maintains Hold on Kimlun, cuts target price to RM1.44

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HLIB Research maintains Hold on Kimlun, cuts target price to RM1.44 Empty HLIB Research maintains Hold on Kimlun, cuts target price to RM1.44

Post by Cals Fri 26 Sep 2014, 08:35

HLIB Research maintains Hold on Kimlun, cuts target price to RM1.44
Business & Markets 2014
Written by theedgemalaysia.com   
Friday, 26 September 2014 08:23

KUALA LUMPUR (Sept 26): Hong Leong IB Research (HLIB) had maintained its Hold rating on Kimlun Corporation Bhd with a lower target price of RM1.44 and said the company’s construction division’s order book had dwindled RM1.52 billion (in end-1H14, translating to a run rate of 2x of FY13’s construction revenue), on the back of slower job wins year-to-date.
In a note Friday, the research nevertheless said Kimlun was still looking to add RM600 million worth of contracts for the remaining months of 2014.
HLIB said despite the property headwinds, the company remains fairly positive on phase 1 of its Medini project (which it is slated for launch with an estimated GDV of RM420 million by end-2014), given its cheaper pricing (RM750 psf, vis-à-vis RM1,300-1,500 psf in its neighbourhood), and the exemption in foreign restriction.
“The manufacturing division’s prospects remain positive, thanks to the Singapore government’s target to double its rail network and plans to develop phase 2 of Deep Tunnel Sewerage System/
“We cut our FY14 net profit forecast by 13.7% to RM37.2m, largely to reflect higher effective tax rate.
“Target price cut by 6.5% to RM1.44 based on 10x revised average FY14-FY15 earnings,” it said.
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