PETALING JAYA: Analysts are upbeat over Kimlun Corp Bhd
’s outlook for this year, underpinned by the rollout of public infrastructure projects.
Kenanga Research noted that the construction company is eyeing work packages and orders for pre-cast concrete products from the second phase of the Pan Borneo Highway, flood mitigation projects, the Singapore Cross Island Line, semiconductor factories, and Mass Rapid Transit 3 (MRT3) line in the Klang Valley.
“We upgrade our financial year 2024 (FY24) to FY25 net profit forecasts by 8% and 9%, respectively, as we raise our FY24 to FY25 job-win assumptions to RM800mil and RM850mil (from RM750mil and RM800mil, against the company’s target of RM900mil per year),” the research house said in a report.
Additionally), Hong Leong Investment Bank Research (HLIB Research) also said it remains upbeat about Kimlun’s prospects.
“There is a pipeline of opportunities with stronger private-sector optimism, as well as rollout of basic infrastructure projects, not to mention the big-ticket ones.
“Projects we think Kimlun’s construction or precast division could leverage are multiple highway upgrades in Johor and Sarawak, flood mitigation packages, hospital projects, the Penang Light Rail Transit project, the Kuching Urban Transportation System and MRT3.”
HLIB Research added that this does not even include opportunities from data centres and mega projects in Singapore like the Cross Island Line (MRT) Phases 2 and 3 and the Changi Airport’s Terminal 5.
Last week, Singapore-listed Astaka Holdings Ltd awarded a RM150mil construction contract to Kimlun Sdn Bhd, a subsidiary of Kimlun Corp.
Kimlun will assume the role of main contractor for the Aliva development, a serviced residence with a RM254mil gross development value.
Aliva will have a total of 499 units with built-ups ranging from 595 sq ft to 1,075 sq ft and is strategically positioned to target the premium market in Mount Austin, a bustling township in Johor Baru.
The development is slated for completion in the fourth quarter of 2026.
Since the commercial launch of Aliva in December 2023, the project has achieved a take-up rate of 70%.
Taking into account this latest contract win and RM133.6mil landed residential contract awarded by Sunway Bhd in January, construction-contract wins year-to-date (y-t-d) have amounted to RM283.6mil, HLIB Research said.
“This would imply unbilled construction and a total order book of RM2.18bil and RM2.48bil, respectively. Its total orderbook is now the highest since its listing in 2010.
“We are also estimating that the company may have secured close to RM600mil worth of new construction contracts y-t-d, judging by strong prospects in Johor.”
HLIB Research said this reaffirmed its view that Kimlun’s construction-wins target of RM800mil-to-RM1bil is conservative.
“We believe successful execution of its current strong order book could serve as a re-rating catalyst,” the research house said.
Kenanga Research is also positive on Kimlun’s latest contract win.
“We like Kimlun as it is a beneficiary of the roll-out of public infrastructure projects. It capitalises on the stable public infrastructure sector in Singapore with its precast-concrete products manufactured in Johor and its strong earnings visibility is backed by a strong outstanding order book, which will keep it busy for the next two to three years.”
