Kingsmen Creatives

Kingsmen Creatives: 3Q12 results were in-line with expectations. Rev at $70.4m (-18% YoY) and net profit of $3.6m (-19% YoY). Grp typically sees a greater bulk of earnings recognized in 4Q, where it accounted for 36% of FY11 results . Grp’s orderbook of $289m, remains strong on the back of strong optimism in Asia. Non-core segments recorded a healthy 25% growth YoY to $5.8m. Gross margin in 3Q12 and net margin maintained steady YoY. Kim Eng expect stronger results from E&M and Interiors and expect higher sales recognition from interiors division in 4Q, where fit-outs are needed before the festive season. Museum projects, such as Gardens by the Bay, GuangZhou HengDa Exhibitions Centre and HK Maritime Museum will also be delivered by end of the year. Overall, house maintains Buy with $0.96 TP.