Kimlun targets RM600mil to RM900mil construction jobs

PETALING JAYA: Kimlun Corp Bhd is looking to secure construction jobs worth RM600mil to RM900mil in financial year 2018 (FY18), says AmInvestment Bank Research.

The research house said the construction company expected this to come mainly from affordable homes.

For FY17, Kimlun secured RM980mil in construction jobs, which was considered a bumper year.

“We maintain our forecasts, fair value of RM2.65 and ‘buy’ call, following an analyst briefing today (yesterday).

“Our fair value is based on 12 times forecast FY18 fully-diluted earnings per share, which is in line with our one-year forward target price/earnings of 10 times to 12 times for small-cap construction stocks,” it said in a report.

AmInvest Research said with Johor being its home turf, Kimlun is hoping to garner a slice of action in the Gemas-Johor Baru electrified double-tracking rail project.

“Kimlun could bid for both infrastructure sub-contracts as well as supply contracts for precast concrete products for the project.

“While Kimlun is bullish on the East Coast Rail Link (ECRL) project (mainly for supply contracts for precast concrete products), it noticed that the actual rollout of the project could be challenging, given the various issues such as land acquisitions and changes in the alignment,” it said.

The research house said Kimlun played down its chances in getting Pan Borneo Sabah Highway work packages as it had yet to identify a “suitable” local joint-venture partner.

At present, Kimlun’s outstanding construction order book stands at RM1.8bil, which will keep it busy for the next two years.

The manufacturing order backlog is RM340mil, comprising mainly contracts to supply segmental box girders and tunnel lining segments to the MRT2 project and orders for tunnel lining segments, jacking pipes and sleepers from various infrastructure projects in Singapore.