KUALA LUMPUR (Jan 23): Kimlun Corp Bhd rose as much as 10% after the builder secured a RM230.7 million affordable housing contract in Johor from UEM Sunrise Bhd.

Kimlun (fundamental 1.3; valuation: 2.4) climbed to a high of RM1.43 before paring gains at RM1.39 at 10.32am. A total of 232,700 shares were traded.

For comparison, the FBM KLCI added 22.16 points or 1.24%.

Despite Kimlun's contract win, analysts remained cautious on the Johor property market slowdown, especially within Iskandar Malaysia on oversupply concerns.

"This slowdown would have a negative impact on Kimlun as it derives the bulk of its
contracts or more than 70% from that region.

"We expect property developers with projects in the region to scale back on their launch momentum, which in turn, would slow down potential job wins to Kimlun," Hong Leong Investment Bank said in a note to clients today.

AmResearch Sdn Bhd has a conservative new order win of RM600 million this year for Kimlun as the research firm remained cautious on the Johor property outlook.

According to AmResearch, Kimlun had earlier indicated it was looking at between RM600 million and RM800 million of contract wins this year.

"We estimate a balance order book of RM1.4 billion currently to keep the group busy for FY15F and FY16," AmResearch said.

AmResearch, which maintained its "hold" call on Kimlun shares, however, lowered its fair value for the stock to RM1.45 from RM1.56 previously.

Hong Leong also retained its "hold" recommendation for Kimlun at an unchanged target price of RM1.33.

(Note: The Edge Research's fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)