KSH

KSH: Property development and construction firm KSH posted FY13 net profit of $36.3m (+98.3%), mainly boosted by property development projects and an increase in share of results of associates. The stellar results were 26.5% above consensus earnings according to Bloomberg. FY13 revenues of $231.6m increased 35.8% due to the increase in revenue from its construction business of $206.1m (+41.8%) and sales of development property of $20.0m (+1.2%). Labour costs for the group increased significantly by 76.6% to $10.7m, due to salary increases as well as increases in other staff-related expenses such as CPF contribution, staff training, workers levies and workers accommodation. KSH will continue to see increase in sales and progress in its construction works, supported by the positive performance of the property market. However, management highlights the increasing costs from a labour shortage, rising competition and uncertainties on material prices. KSH has outstanding order book of $446m. A final dividend of 1.15¢ per share was proposed, bringing full year dividends to 2.5¢. At last closing price of $0.5950, KSH trades at 6.3x trailing P/E, 1.4x P/B and historical dividend yield of 4.2%.