Keong Hong

Keong Hong: 1HFY14 net profit climbed 41% y/y to $8.8m on revenue spike of 122% to $118m, mainly due to higher revenue recognition for ongoing projects as well as new projects such as Alexandra Central, J Gateway and Skypark Residences. Meanwhile, finance costs surged 266% on the back of increased bank borrowings, as the group's gearing rose from 5% to 17.6%. Keong Hong has an order book of $494m, which fills construction activity up to 2016. Project pipeline includes Paterson 2, The Terrasse, Twin Waterfalls, Alexandra Central, J Gateway and SkyPark Residences. The Group expects to launch Edgedale Plains EC in Punggol Central in 4Q2014 (1QFY15). The development of an airport hotel on the island of Kooddoo and a tourist resort on the island of Maamutaa in Maldives are slated for completion in 2015 and 2016. Group proposed a 1-for-2 bonus share issue and an interim dividend of 1¢/share, which doubled from 1HFY13. At $0.60, Keong Hong trades at 1.3x P/B and an attractive trailing 12 months yield of 5%.