Keong Hong builds on high ROE to beat competitors

Homegrown property construction, development and investment group Keong Hong

Holdings has emerged winner in the construction sector under the Centurion Club Awards, pipping competitors KSH Holdings and Lian Beng Group to the title.

Keong Hong’s win was spearheaded by a weighted return on equity of 22.41% over the past three years — the highest in the construction sector. This was significantly

higher than KSH’s and Lian Beng’s respective ROEs of 16.57% and 12.12%.

The group posted earnings of $22.1 million for FY2018 ended September 2018, some 64.8% lower than earnings of $62.7 million a year ago. The decline was largely attributable to a steep drop in other income to $8.6 million in FY2018, down from $57.6 million a year ago. This was due mainly to the absence of an exceptional gain of $49.8 million in 2017 on the remeasurement of an investment to fair value.

FY2018 revenue fell 29.4% to $165.2 million, owing mainly to lower recognition of revenue from construction projects. This was because some of the group’s major projects, such as the Parc Life condominium and Raffles Hospital Extension, had been largely completed in the previous year.

As at end-2018, the group’s construction order book stood at $332 million.

Looking ahead, the group says it is looking for investment opportunities overseas, particularly in Vietnam, Japan, Australia, the UK and Indonesia. It adds that property development opportunities in Vietnam and Jakarta afford higher returns than in Singapore, while hotel and property investments in Japan, Australia and the UK are attractive, given their popularity as tourist destinations and stable yield.