KSH Holdings

KSH Holdings: UOB Kay Hian initiates coverage with a BUY and target price of $0.71, representing a 29% upside. With locked-in sales from its successful property launches, KSH is likely to enjoy good earnings visibility over the next five years. As an established contractor, KSH continues to replenish its orderbook with consistent contract wins and a comparative favourable margin compared to peers. Strong earnings and free cash flow (FCF) support KSH as a dividend play with a current dividend yield of 4.5%, while going forward earnings visibility remains strong. Through its JVs, KSH has interest in 13 local property development projects. Based on its existing (eight launched) projects and current sales, house conservatively estimate KSH to recognise a profit of about $124.6m (S$0.32/share) over the next five years. In addition, KSH’s 45% interest in its Beijing property development project, Liang Jing Ming Ju (LJMJ) Phase 4, is expected to contribute very positively to earnings for FY16.