The latest announcement from the ECB to cut rates as a bold measures to
fight against the risk of deflation by putting a record low of 0.15% on
the interest rates will be going to see fresh bullishness in the
equities market again. The DJIA challenge above 16800, putting a foot
hold at 16836.11 (+98.58) earlier today as the market continues to see a
bullish run for the coming days as major continent in the world
continues to maintain a loose monetary policy in a means to encourage
more market activities.
While KLSE had been still lurking in the low, I believe this will be a
good time to hunt into some good and cheap stocks that had yet to saw
large rally. One of them that is attractive to me is - Kimlun
Let's have a quick outlook on Kimlun's recent share price movement.
Kimlun had been consolidating at the region of RM 1.60 after challenging
above RM 1.70 prior to the weak market sentiment that had saw a broad
weaker volume on the market. However, as consolidation starts to
saturate at the region, Kimlun will be looking to see a fresh interest
of buying in the coming days that could be looking forward to challenge
above RM 1.70 in the coming days. Kimlun fundamentals had been going
good and strong as the company
Kimlun had started off as a infrastructure construction company in the
early days. However, Kimlun had started to venture into properties
development as of recently which had saw a strong reception in their
projects.
Kimlun 1Q FYE 2014 net earnings had risen to RM 19.5m, marking a 117%
increase from the previous quarter. While the 1Q FYE 2014 had been
earmarked with a one off disposal gain of RM 10.8m from the Nilai land
which had also pared down gearing.
Kimlun had been in the lime light as of recent prior to the bullish
segment in the major infrastructural projects, especially in the KVMRT
tunneling projects. To recall, Kimlun had won RM 1.1b worth of
construction jobs last year with most of them during the 2H of 2013.
Of all construction company, we are favorable with the management team
of Kimlun in delivering their projects timely and a good cost
controlling management.
Whilst most of the construction company
involved in KVMRT project had suffered from overblown cost albeit their
large order book, for Kimlun to make it on a green note with a profit
margin of approx 10% on their project value had made them exceptional
amongst the other construction company. Beside construction revenue,
Kimlun also benefit from it's manufacturing division for the supply of
tunnel lining segments to the KVMRT project.
Kimlun on a new venture
Kimlun latest venture in the properties in Cyberjaya dubbed The HYVE had
saw exceptional reception in their launch. The HYVE, a total GDV of RM
240m had saw takes up of more than 80% already.
To date, Kimlun is sitting on an
unbilled property sales of approximately RM 150m.
Kimlun will be planning their new bungalow projects with approximately
RM 120m in GDV at Shah Alam after acquiring the land from Melati Ehsan.
Although government had been putting in cooling off measure in the
property market, the niche market in the bungalow segment will continue
to see demand.
Kimlun will be officially launching it's Medini Opus in Johor that is
carrying a GDV of RM 446m. The launch will continue to see contribution
into the FYE 2014-2015 of Kimlun.
I believe Kimlum will be a good company to be invested due to their
strong fundamentals. Kimlun's current order book stands at RM
2.1billion, and will be expecting more to come into their hand in the 2H
of 2014.
Kimlun will be a good company to be invested in due to
- Strong order book of RM 2.1b that will be keeping them busy for the coming 2 to 3 years.
- Diversified into properties division that make their revenue less reliable for tenders.
- Strong management team with good cost controlling measurement.
- Involvement in KVMRT Line 1.
- Robust KVMRT growth prospect as Kimlun involves in the
manufacturing of Tunnel Lining Segment (TLS) and the Segmental Box
Griders (SBG)
- Outward expansion with foreign project secured - Singapore MRT
- Bullish outlook in the construction sector in 2014 and 2015 which
is fueled by KVMRT Line 2, PR1MA Housing Construction, Refinery and
Petrochemical Integrated Development.
We believe Kimlum will be able to see more projects secured in the 2H of
2014, possibly inching near RM 3b in the coming days. A short term
outlook will see Kimlun trading towards RM 1.70, as a long term outlook
will see Kimlun touching at RM 1.90.
Bone's short term TP: RM 1.70
Cheers and happy trading.
