AIO Finance Analysis

KSH Holdings Ltd – Wins S$53.5m contract; Recommend Buy at TP S$0.72

The Group secured a S$53.5m contract from Eurochem for the construction of a 13-storey business park building at International Business Park, bringing its order books to S$505m that will take the Group through to FY11.

We have raised our earnings forecast by 9% for FY09 for the recent contract win from Eurochem Corporation Pte Ltd (“Eurochem”) worth S$53.5m. We believe KSH has the capacity to clinch another $150~250m projects.

We value KSH using sum-of-the-parts valuation method, valuing its property developments and construction business, at 7x blended FY08/09F construction earnings. At this level, price target works out to $0.72, providing an upside of 57%. We reiterate BUY.

NOL – net profit up 44% to US$523 million

Neptune Orient Lines (NOL) today reported net profit for full year 2007 of US$523 million, 44% higher than previous year, owing to improved liner volumes and freight rates in selected key trades. For the fourth quarter of 2007, the company registered net profit of US$196 million, up 292% on yoy basis.

The revenue for the year was up 12% to a record US$8.16 billion while the fourth quarter’s revenue up 22% to US$2.42 billion on qoq basis.

Source: WestComb Securities