This article first appeared in The Edge Financial Daily, on March 14, 2016.
Kimlun Corp Bhd (-ve)
SHARES of Johor-based construction company Kimlun (fundamental: 1.7/3, valuation: 1.8/3) closed down two sen or 1.16% at RM1.71 on Friday. Last Thursday, it announced that its 30%-owned joint-venture company had secured a RM1.46 billion Pan Borneo highway job. The duration of the contract is 48 months with estimated completion in end-March 2020.
For 4QFY15, Kimlun’s revenue declined 16.1% year-on-year to RM231.9 million, but net profit more than doubled to RM21.4 million mainly due to better gross profit margin derived by the construction and manufacturing divisions. The company proposed a higher final dividend of 5.8 sen for 2015 versus 3.8 sen for 2014, giving a yield of 3.4%.
Kimlun, a well-established building contractor and concrete products supplier, is seen as a cheaper proxy to major infrastructure projects in Iskandar Malaysia as well as MRT developments in Malaysia and Singapore. The stock currently trades at a trailing P/E of 7.1 times and 1.11 times its book value.