KUALA LUMPUR (Sept 29): Kimlun Corp Bhd rose 3.67% in thin trade this morning after Mah Sing Group Bhd awarded a RM50 million contract to Kimlun to build a connecting road to the Tanjung Langsat–Cahaya Baru Toll Connecting Highway in Johor

At 9.33am, Kimlun rose 8 sen to RM2.26 with 31,900 shares traded.

Work for the construction — which will improve accessibility to Mah Sing’s township development “Meridin East” — is set to begin in the first quarter of 2018, with completion scheduled at end-2020.

Meanwhile, Hong Leong IB Research upgraded Kimlun to “Buy” at RM2.18 with a higher target price (TP) of RM2.70 (from RM2.30) and said the timing gap for manufacturing to narrow by 4Q17 once production for MRT2 ramps up.

In a note today, the research house said Kimlun’s year-to-date job wins strong at RM970 million, surpassing initial guidance of RM600 million -RM700 million.

It said Kimlun’s orderbook was at a high of RM2.3 billion implying 2.5x cover on FY16 revenue.

HLIB Research said Kimlun was no longer in running for LRT3 viaduct package but will try to participate via manufacturing (precast products).

“Eyeing on mega rail projects (ECRL and HSR) as well as RM500 million in affordable housing jobs.

“No change to forecast but potential for an earnings recovery in FY18 is now clearer with strong job wins and a record orderbook.

“Upgrade to Buy, TP raised from RM2.30 to RM2.70 after rolling over from mid to end-FY18 and higher P/E target from 10x to 11x (mean),” it said.