KSH

KSH: FY14 net profit surged 23% to a record $44.5m, mainly propped up by sales of property development projects, which brought associate income to $27.7m (+66%) and property development segment to $32.5m (+63%). Consequently, revenue spiked 40% to $324.5m, also driven by the other two remaining segments- construction (+39%) and investment properties (+13.5%). However, major revenue contributor- construction segment (88%), recorded a negative operating margin as costs outpaced sales. Construction order book stood at $410m and management expects construction costs to continue the uptrend as a result of rising cost pressures due to progressive tightening of manpower policies, more stringent regulatory controls on construction industries and increase of construction material costs. Management declared final DPS of 1.75¢, bringing FY14 total to 3¢ (FY13: 2.5¢). At $0.555, KSH trades at 5.2x trailing P/E and 5.4% dividend yield.