Challenging Times

 

KSH Holdings is a construction and property development company established in 1979 and listed in SGX since Feb-2007. The firm is A1-graded for construction and A2 for civil engineering contractor for public sector projects in Singapore.

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On-going property development projects in Singapore are: Rezi 35, Rezi 24, Park Colonial, Affinity@Serangoon and Riverfront Residences. $416M progress billings are expected to be recognised from 2022. 

Sino-Singapore Health City in Gaobeidian China is expected to be profitable in FY22. 

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Under property investment, the group have invested in a 36-storey retail-office complex Tainxing Riverfront Square in Tianjin China. 

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Through joint ventures, KSH have acquired properties in U.K., Australia, Malaysia and Japan. 

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Business  FY-March

Construction constitute about 97% of revenue, has been weak since peaking in FY14. Gross & operating margin weakened from FY19. Compounded by Covid-19 pandemic, the company reported a loss of $3.9M in FY21. Fair value assets adjustment were other reasons for poor performance namely:

• $7.9M for oversea properties

• $3.8M loss from associates hotel operations & development

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Order-book improved substantially from 1H20 low of $351M to $522M in 1H22.

 

Balance sheet health is moderate with total debt of $129M supported by cash & equivalent of $140M. 

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Opinion

Construction earning will be challenged by higher labour, material and compliance cost despite improving order-book. New contracts should be supportive of earning against a highly competitive environment. 

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Residential properties demand in Singapore remained tight and should be earning accretive. 

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Tianjin Tainting Riverfront Square in China will be challenging due to pandemic zero Covid-19 policy and low occupancy rate of 67%.