Keong Hong

Keong Hong: SIAS Reseach maintains INCREASE EXPOSURE, with TP of $0.715; implies upside of 31% from current price of $0.545. Keong Hong Holdings announced that it has been awarded a $101.08m contract to build a hotel at Jalan Bukit Merah/Alexandra Road by Chip Eng Seng. Work will commence in March 2013 (impacting 2H FY13 ending Sep 2013). To date, Group's order book amounts to $550m. SIAS' analysis of KH’s order book now suggests that the company’s FY13 revenue may fall within the range of $200m to $230m, higher than initial forecast of $200.8m. FY14 revenue accounted for on its forecast as well, and further contract wins later this year will most likely add upside to FY14 revenue forecast. However, SIAS is cautious on risks from project execution and costs, such as upward pressure on labour costs, may still manifest. Hence, House would review after the Group has released its 1HFY13 results- estimated in to be in May.