Kenanga Research has made an “Outperform” recommendation for Kimlun Corporation Bhd with an unchanged TP of RM1.25 pegged to 9x FY22E PER.
It said that it would continue to like the name for its potential sharp earnings turn-around from a small base.
“Also, FY22E PER of 5.8x is attractive given that it offers exposure to MRT3 (through the supply of TLS and SBGs) and Singapore which is seeing rising construction activity,” it said
The research house said that the property division contributions to pick up. Kimlun has scheduled three launches with total GDV of RM200-300million in FY22 namely, Bukit Bayu Bungalows Phase 2A (16 units) at RM37m GDV, Bukit Bayu Bungalows Phase 2B (23 units) at RM50million GDV and (3) commercial development at Seri Alam (Kimlun owns 69.5% stake – tentative GDV of RM200 million assuming land/GDV of 20%).
Kenanga said that In comparison, FY20 and FY21 only had launches worth RM60m/annum.
“Currently, Kimlun is still pending land sale completion of its 49%-owned Alam Damai land (Cheras) which will likely see launch commence in FY23 (GDV of c.RM600m assuming 15% land/GDV),“ Kenanga said