KSH Holdings’ (KSHH) 1Q19 revenue increased 31.3% to S$40.8m mainly due to a 33.2% higher construction revenue. Profit from operations before share of results of JVs and associates dropped 1.6% YoY to S$8.2m.

Share of results of associates worsened by 22.7% YoY to a loss of S$3.1m, while share of results of JVs rose 38.5% to S$2.5m. As a result, PATMI fell 3.8% to S$6.0m.

KSH Holdings has launched three of four residential pipeline projects that have been “well-received by the market” according to management.

KSHH announced earlier this month that it had been awarded two construction contracts of S$53.8m and S$28.0m respectively, both expected to complete in 2020.

With this set of results, we believe the positive operational outlook for KSHH’s construction division remains intact. Our fair value remains at S$0.98. Maintain BUY.

Source: OCBC Research - 13 Aug 2018