Kimlun Corporation Berhad

$KIMLUN / 5171 (KIMLUN CORPORATION BERHAD)
Research Report by KENANGA

$KIMLUN / 5171 (KIMLUN CORPORATION BERHAD)
Research Report by HLIB

$KIMLUN / 5171 (KIMLUN CORPORATION BERHAD)

$KIMLUN / 5171 (KIMLUN CORPORATION BERHAD)
Research by Kenanga
OUTPERFORM – TP RM1.69

" Secures RM128m Job in Johor Bahru”

KIMLUN has won a RM128.1m contract to build a residential development project in Johor Bahru, Johor. This brings its YTD contract wins to RM789.0m and outstanding order book to RM3.28b. It is poised to benefit from a new wave of public infrastructure projects. We maintain our forecasts, TP of RM1.69 and OUTPERFORM rating.

Analyst:
Teh Kian Yeong
tehky@kenanga.com.my

$KIMLUN / 5171 (KIMLUN CORPORATION BERHAD)
Research by HLIB
BUY – TP RM1.73

"Seizing the day”

Kimlun is expected to record stronger 2H revenue performance driven by acceleration in construction billings, active precast orders and property recognition. Likewise, core earnings should follow suit. Record high orderbookof RM3.5bn (4.1x cover) could still grow on the back of higher tenders worthRM4.4bn. Precast should benefit from construction upcycle in SG and MY. Timeline on new property projects are on track to benefit from healthy sentiment in Johor. Trading at an orderbook/MC ratio of 7.3x (HLIB coverage: 2.2x) implies its high orderbook levels have not been priced in. No change to forecasts. Maintain BUY with unchanged TP of RM1.73.

Analyst:
Edwin Woo, CFA
ckwoo@hlib.hongleong.com.my

$KIMLUN / 5171 (KIMLUN CORPORATION BERHAD)
Research by Kenanga
Outperform - TP RM1.69

"1HFY24 Results Disappoints"

KIMLUN’s 1HFY24 results missed expectations as it turned loss-making in 2QFY24 given high operating costs while its topline did not grow big enough to cover its costs. Having said that, it is poised to benefit from a new wave of public infrastructure projects. We cut our FY24-FY25f forecasts by 49-21% and TP by 6% to RM1.69. It remains an OUTPERFORM.

Analyst:
Teh Kian Yeong
tehky@kenanga.com.my

$KIMLUN / 5171 (KIMLUN CORPORATION BERHAD)
Research by HLIB
Buy - TP RM1.73

"Yet another orderbook high"

Kimlun’s 1HFY24 core LATAMI of –RM1.2m missed our and consensus expectations. No change to our view of a stronger 2H. New orderbook high of RM3.5bn was a positive surprise. Implied wins in 1H amounted to a robust ~RM1.8bn. We see potential upside from: (i) contract award from its JV and (ii) upcoming award decision of a sizable tender. Weak steel prices (>-10% YTD) helps with recent diesel induced inflation. Change FY24f/25f/26f core PATAMI forecasts by -22.4%/+0.5%/6.6%. Maintain BUY with marginally higher TP of RM1.73 pegged to 11x P/E multiple (40% discount to KLCON).

Analyst:
Edwin Woo, CFA
ckwoo@hlib.hongleong.com.my

$GAMUDA / 5398 (GAMUDA BERHAD) $SUNCON / 5263 (SUNWAY CONSTRUCTION GROUP BERHAD) $KERJAYA / 7161 (KERJAYA PROSPEK GROUP BERHAD) $WCT / 9679 (WCT HOLDINGS BERHAD) $KIMLUN / 5171 (KIMLUN CORPORATION BERHAD)

$KIMLUN / 5171 (KIMLUN CORPORATION BERHAD)
Research by Kenanga
Outperform – TP RM1.81

“In a RM600m Property JV in Johor Bahru"

KIMLUN, via a 49:51 JV with a unit of SGX-listed Astaka Holdings Ltd (Astaka), is developing a RM600m premium serviced apartment project in Johor Bahru. We are positive on the latest venture which will contribute to KIMLUN’s construction and property profits. We maintain our forecasts but raise our TP by 3% to RM1.81 (from RM1.76). Maintain OUTPERFORM.

Analyst:
Teh Kian Yeong
tehky@kenanga.com.my

$KIMLUN / 5171 (KIMLUN CORPORATION BERHAD)
Research by HLIB
Buy – TP RM1.72

“Land banking near RTS"

Kimlun is forming a JVCo in partnership with Astaka Holdings to develop a RM600m GDV serviced apartment located near the CIQ and JB-SG RTS Link. Through this, the company could secure construction contract of RM300m lifting total orderbook to RM3.5bn and also recognising 49% of development profits. Land cost to GDV ratio of 10% could provide adequate safety margin while its prime location is reassuring. No change to forecasts pending finalisation. Maintain BUY with unchanged TP of RM1.72 pegged to 11x P/E multiple (roughly 50% discount to KLCON).

Analyst:
Edwin Woo, CFA
ckwoo@hlib.hongleong.com.my

PLANTATION
$KIMLUN / 5171 (KIMLUN CORPORATION BERHAD) $IOICORP / 1961 (IOI CORPORATION BERHAD) $TSH / 9059 (TSH RESOURCES BERHAD) $KLK / 2445 (KUALA LUMPUR KEPONG BERHAD)
Research by TA
Neutral

“Stockpile Rose Marginally in May”

The Malaysia Palm Oil Board (MPOB) announced a second consecutive month of increase in palm oil stockpiles to 1.75mn tonnes in May, which was consistent with market forecasts. Production was robust at 1.70mn tonnes (+13.5% MoM), exceeding expectations. Exports, on the other hand, climbed by 11.7% MoM to 1.38mn tonnes, but was lower than expected. Imports fell by 40.3% MoM, totalling 20.76k tonnes, while domestic consumption increased by 25.2% to 338.09k tonnes.

Analyst(s):
Angeline Chin
angelinechin@ta.com.my

$KIMLUN / 5171 (KIMLUN CORPORATION BERHAD)

$KIMLUN / 5171 (KIMLUN CORPORATION BERHAD)
Research by Kenanga
Market Perform – TP RM1.47

“Bags RM234m Building Job in Shah Alam"

KIMLUN has secured a private building job worth RM234.3m in Shah Alam, Selangor, boosting its YTD job wins to RM660.9m and outstanding order book to RM2.64b. It is poised to benefit from a new wave of public infrastructure projects. We maintain our forecasts, TP of RM1.47 and MARKET PERFORM call.

Analyst:
Teh Kian Yeong
tehky@kenanga.com.my

$KIMLUN / 5171 (KIMLUN CORPORATION BERHAD)
Research by HLIB
Buy – TP RM1.72

“On a roll"

Kimlun announced a contract win worth RM234.3m, taking its construction wins YTD to RM1.05bn. Total unbilled orders including precast now stands at RM3.16bn (vs previous high of RM2.3bn). Based on its tenderbook of RM2bn, we now see upside risks to our newly revised construction win assumption. New property launches could contribute in FY25. No change to forecasts. Maintain BUY with unchanged TP of RM1.72 pegged to 11x P/E multiple (40% discount to KLCON).

Analyst:
Edwin Woo, CFA
ckwoo@hlib.hongleong.com.my

General Meetings: Outcome of Meeting

OTHERSKimlun Corporation Berhad ("KIMLUN" or "the Company") - Award of Contract

$KIMLUN / 5171 (KIMLUN CORPORATION BERHAD)
Research by Kenanga
Market Perform – TP RM1.47

“A Slow Start to FY24"

KIMLUN’s 1QFY24 results met expectations. It barely broke even in 1QFY24 as its new construction projects were still at early stages of execution. Nonetheless, it is poised to benefit from a new wave of public infrastructure projects. We maintain our forecasts, TP of RM1.47 and our MARKET PERFORM rating.

Analyst:
Teh Kian Yeong
tehky@kenanga.com.my

$KIMLUN / 5171 (KIMLUN CORPORATION BERHAD)
Research by HLIB
Buy – TP RM1.72

“Leading indicators are positive"

Kimlun’s 1QFY24 core PATAMI missed our & consensus expectations due to gap between new and old projects. FY24 is guided to be a backloaded year. On the brighter side, estimated total new orders stands at RM926m with total unbilled orderbook roughly at ~RM2.9bn (vs previous historical high of RM2.3bn). New property launches could contribute in FY25. Change FY24f/25f/26f core PATAMI forecasts by -11.2%/+2.3%/7.9%. Maintain BUY with higher TP of RM1.72 pegged to 11x P/E multiple (40% discount to KLCON).

Analyst:
Edwin Woo, CFA
ckwoo@hlib.hongleong.com.my

Quarterly rpt on consolidated results for the financial period ended 31/03/2024

$KIMLUN / 5171 (KIMLUN CORPORATION BERHAD)
Research by Kenanga
Market Perform – TP of MYR 1.47

“Bags RM143m Building Job in Johor”

KIMLUN has secured a RM143m building job in Johor, boosting its YTD job wins to RM426.6m and outstanding order book to RM2.32b. We raise our FY24-25F earnings forecasts by 34% and 50%, respectively, lift our TP by 50% to RM1.47 (from RM0.98) but keep our MARKET PERFORM call.

Analyst(s):
Teh Kian Yeong
tehky@kenanga.com.my

$KIMLUN / 5171 (KIMLUN CORPORATION BERHAD)
$ECOWLD / 8206 (ECO WORLD DEVELOPMENT GROUP BERHAD)
$SUNWAY / 5211 (SUNWAY BERHAD)

OTHERSKimlun Corporation Berhad ("KIMLUN" or "the Company") - Award of Contract

Annual Report & CG Report - 2023

CIRCULAR/STATEMENT TO SHAREHOLDERS IN RELATION TO THE (I) PROPOSED RENEWAL OF SHAREHOLDERS' MANDATE FOR RECURRENT RELATED PARTY TRANSACTIONS OF A REVENUE OR TRADING NATURE; AND (II) PROPOSED RENEWAL OF AUTHORITY FOR THE COMPANY TO PURCHASE UP TO TEN PER CENT (10%) OF THE TOTAL NUMBER OF ISSUED SHARES IN THE COMPANY

KIMLUN - Notice of Book Closure

Final Dividend

General Meetings: Notice of Meeting

$KIMLUN / 5171 (KIMLUN CORPORATION BERHAD)
Research by Kenanga
Market Perform – Target Price RM0.98

“Bags RM150m Building Job in Johor”

KIMLUN has bagged a RM150m building job in Johor, boosting its YTD job wins to RM283.6m and outstanding order book to RM2.18b. We raise our FY24-25F earnings forecasts by 8% and 9%, respectively, lift our TP by 10% to RM0.98 (from RM0.89) but keep our MARKET PERFORM call.



Analyst:
Teh Kian Yeong
tehky@kenanga.com.my

$KIMLUN / 5171 (KIMLUN CORPORATION BERHAD)
Research by HLIB
Buy (Maintain) – Target Price RM1.38

“Robust contract flows”

Kimlun announced a contract win worth RM150m, taking its wins YTD to RM284m. Total orderbook is now highest since listing at RM2.48bn. We postulate that the company may have secured an even higher ~RM600m of wins based on current positive sentiments in Johor. We continue to see upside risks to management’s RM800m-RM1bn construction wins for FY24. Going forward, opportunities include highway jobs in Johor & Sarawak, flood mitigation, KUTS, hospitals and Penang LRT, among others. No change to forecasts with numbers baked in. Maintain BUY with unchanged TP of RM1.38.
Stock’s P/B discount to KLCON of near 50% is unjustified and implies a sector downswing. Successful execution of its strong orderbook could serve as a rerating catalyst.


Analyst:
Edwin Woo, CFA
ckwoo@hlib.hongleong.com.my

KUALA LUMPUR: Kimlun Corporation Bhd’s pipeline of opportunities looks robust with stronger private sector optimism as well as rollout of basic and big ticket infrastructure projects. 

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