Kingsmen has recently completed 7 pavilions worth $20m at the Shanghai Expo. We note that these are high margin projects, which will be recognised in P&L in 2QFY10. Looking ahead, we believe Kingsmen is well-positioned to win more contracts. The group is in the process of bidding for several new projects including thematic & scenic works around the region. On the interior front, the group faces overwhelming demand to fit out high-end boutiques at the Marina Bay Sands Shoppes®.
In addition, fast expansion plans of its blue chip retail clients will continue to spur Kingsmen’s order book. The group can capitalise on its solid balance sheet strength and net cash of $21.5m to grow. The group is working on a few trade shows, and possibly some mega theme park projects in China. Kim Eng maintains BUY recommendation as the stock also offers an decent dividend yield of 6%. Positive catalysts include mega contract wins in the region.
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