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Broker's take: OCBC Investment Research upgrades KSH to 'buy'
OCBC Investment Research on Monday raised its call on construction firm KSH Holdings to "buy", and upped its fair value to S$0.98 from S$0.79, citing healthy margins for ongoing construction projects.
"Light at the end of the tunnel... given the slew of en bloc redevelopments in the pipeline as well as a healthy stream of public sector projects, we believe the segment will turn a corner in FY19," the brokerage said in a report.
This comes despite KSH reporting a 33.4 per cent fall in full-year revenue to S$132.6 million, mainly due to lower construction revenue resulting from delays in handover of two construction sites. After a 56 per cent decline in construction revenue from FY14 to FY18, there are "brighter prospects" ahead for the group, said the brokerage, pointing to the order book of about S$542 million that is one of the strongest as at end-quarter since Q1 2014.
OCBC added that the group plans to launch four Singapore residential projects with its joint venture and associate partners in 2018, which should offer healthy margins.