HLIB has maintained its BUY call on Kimlun Corp Bhd with an unchanged target price of RM1.94, implying 108.7% upside, as the construction group’s strong orderbook and typically stronger second-half billings support its earnings outlook.
HLIB said Kimlun’s 1H26 core earnings of RM32.8 million were within expectations, accounting for 40% of HLIB’s FY26 forecast. The research house expects stronger construction and property billings in the second half.
Kimlun posted 2Q26 core earnings of RM20.5 million, up 67% quarter-on-quarter but down 13% year-on-year. The sequential improvement was driven by better construction margins, an 86% increase in precast billings and accelerated property revenue recognition as the Pinegate project nears handover.
Its unbilled construction orderbook stood at RM3.8 billion as at end-June, equivalent to 2.7 times FY25 construction billings. With around RM400 million to RM500 million in contract wins secured year-to-date, HLIB believes the group is on track to secure at least RM800 million of new orders in FY26.
Among the potential additions is around RM350 million of superstructure work for Arden JB, which is expected to be awarded this year. Chin also sees Kimlun potentially benefiting from the upcoming Johor e-ART rollout through subcontracting and precast supply opportunities.
Meanwhile, property unbilled sales stood at RM133 million, supported by Pinegate Residence and Taman Nusa Melati. HLIB said encouraging take-up rates should support further sales conversions, while the nearly fully taken-up Arden JB development is expected to contribute to the group over the coming years.
The research house maintained its forecasts and said Kimlun remains attractive at just 4.3 times FY26 and 3.6 times FY27 price-to-earnings.
As of 11.24 am, the stock price gained 1.63% to RM0.935.
