KSH

KSH: Secured $59.9m construction contract from JTC to build a district cooling system plant at Ayer Rajah Ave. Construction starts this month, with completion by Jan 2015. OCBC notes that mgmt is looking to diversify their condominium-heavy construction book with a public project, and gross margins continue to exceed a 10% hurdle rate. In 2013 to date, order book replenishment now cumulates to $202m – tracking somewhat above forecast and exceeding the S$161m total last year. Contract takes Group's construction orderbook to $489m. Given its momentum, OCBC are reviewing its valuation of KSH’s construction segment – currently pegged at 4x FY13E earnings versus 5-7x seen at peers. Upcoming launches at key property projects (Hong Leong Gardens, Seletar Gardens and King Albert Park) to be potential catalysts ahead. OCBC has a BUY with TP of $0.62 (under review);