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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.

sentifi.com

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