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We highlight the key points from KSH' s ($0.78, up 0.005) recent analysts' briefing:
· Management is very excited due to the recent announcement by the Beijing government to designate Xiongan New Area (XNA) as a special economic zone, making the area comparable to the likes of Shenzhen and Shanghai&rsquo s Pudong. This is done to promote integration with the neighbouring cities of Beijing and Tianjin.
· Due to the immediate surge in buyers' activities, the Chinese government has halted property transactions within the XNA. Fortunately, KSH' s 22.5% owned Gaobeidian township development project (located between XNA and Beijing) was not affected and has seen prices rise from their original launch price of RMB9,000 psm to about RMB12,000 psm currently.
· Gaobeidian is one of the satellite cities surrounding Beijing (about 45km away from Beijing and 40km away from XNA) and is located next to the Beijing Shijiazhuang Expressway and the Beijing Shijiazhuang High Speed Rail passenger line.
· KSH owns an effective 22.5% ownership in the Gaobeidian project and the total project size is about 8,000 mu or 5.3mln sqm in total. Management targets to launch and sell the project in several phases and over the next few years. The first phase is expected to be launched for sale by June-July' 17 and is expected to be about 1.6mln sqm of potential GFA.
· We estimate an all in cost of about RMB5,000 psm against the current prevailing market price of RMB12,000 psm, up from their first 500 units that was sold earlier this year at RMB9,000 psm. If executed well, their 22.5% stake could bring in profit of close to S$400mln in FY 2019/2020 (upon the equivalent of TOP in Singapore' s context). Execution also depends on governmental and regulatory approvals as well as market demand in June-July' 17.
· Given the rising prices, management will slowly develop the remaining 3.7mln sqm of land in Gaobeidian.
· With the latest announced NUS contract win of S$146mln, KSH' s construction order books has been boosted to about S$360mln, helping to underpin the segment&rsquo s steady prospects. We expect this segment to provide good cash flows to help fund their property development segment. Annual profits and cash flows are expected to be close to $20mln for this segment.
· Prudential is almost fully sold, barring a handful of units left. This will also help boost their cash coffers which currently stand at a solid S$79mln (versus no debts). We maintain our long-held BUY recommendation on KSH given the huge potential upside from their Gaobeidian Project in China, steady dividend yield of about 4-5% and strong and growing net cash position S$79mln (about 21% of market cap currently). Similar to past bonanza gains (for Liang Jin Ming Ju project in Shanghai), management also hinted of special rewards for shareholders.
(Lim & Tan)
UOB-KH has increased its target price for KSH to $1.18
KSH hit a massive jackpot as its Gaobeidian project is just below the recently announced new SEZ, which is being compared to Shenzhen and Shanghai&rsquo s Pudong. Gaobeidian prices have surged from Rmb9,000/sqm to Rmb20,000/sqm and look set to go up further. We value KSH&rsquo s current development at S$368m (just 1.9m sqm of total 5.3m sqm at mb15,000/sqm). Since our initiation, share price has soared 42.2% but there is more upside. Reiterate BUY and raise our target price to S$1.18, based on SOTP.
don' t get trap in this movement............sell take profit.
Taken profit this morning. Good luck to long-term holders.
hi bro, yes, KSH is a good company , Lian Beng too. But i just taken profit for my Lian beng already.
The rise is too fast and definitely the work of BBs riding on the good news to pump. Anytime the music stops, one may be buying at high and may be stuck for a considerable amount of time until the fundamental slowly work the share price up again but this may take at least a few mths to 1 to 2 years.
Tomorrow is T+3 if i am wrong, contra + forced selling may appear too.
Abit too scary for me to hold on to my Lian Beng. I would have prefer Lian Beng to have a slow but steady climb, but i am not complaining:)
I sold most of my lian beng at 62 to 62.5 cents this morning
sunview ( Date: 06-Apr-2017 16:45) Posted:
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Your comment is well worth considering. The run-up in the last 3 sessions due to the Gaobeidian project is too fast and furious. Profit-taking is too tempting (I may also do that any time). KSH is now trading in uncharted territory. We just don' t know how far the big boys are going to push.
In any case, KSH is a wll-run and profitable company. It has zero net debt and gives out dividends every year. Even without the potential huge jump in average selling price in the Gaobeidian project, valuation at current price is still not expensive at about 7x forward PE and 4% dividend yield.
HazardKoh ( Date: 06-Apr-2017 14:42) Posted:
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u are right.. did rally abit... but abit no strength liao..
be careful, dun buy high and get stuck .. the BBs may decide to leave or any bad news from china side to curb speculation in the housing in area near the new special zone, then the share price of the 3 trios will collapse ..
Just monitor closely. Cheers
feedfrenzy ( Date: 06-Apr-2017 14:54) Posted:
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you have a point. thanks! but the laggard might rally abit later first :D
HazardKoh ( Date: 06-Apr-2017 14:42) Posted:
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The music is stopping soon... u buy now is buy high and hold the babies.
The BBs are pumping using the news. The china development will only start contribute in 2018 and is over 10 years.
Be careful, dun buy high and get stuck. All the best
feedfrenzy ( Date: 06-Apr-2017 14:39) Posted:
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oxley and lian beng will be laggard too!!!
The china project is a 10 years project and will " project" aka guess work that it will contribute 24 to 40+ cents profit which translate to about 2 to 4 cents EPS each year.
The share price has already risen to an equivalent of almost the 10 years profit of 24 cents using the conservative estimate. Now is overpriced and is the work of BBs making use of the euphoria to pump.
Tomorrow will be T+3 , be careful of dumping.
Cheers
The suggested 24 to 42 cents profit is based on 10 years development which means which year is around EPS of 2-4 cents.
The contribution will only kicks in from 2018.
I think is overstated and is the BB pumping and throwing to retail investors.
Up-run continues today. $0.725.
From NextInsight: KSH HOLDINGS: Investor' s estimate of upside from Gaobeidian project
https://www.nextinsight.net/story-archive-mainmenu-60/939-2017/11425-ksh-holdings-our-initial-estimate-of-upside-from-gaobeidian-project
$0.685, up another 7.9% this morning.
Besides KSH&rsquo S 22.5% stake in The GaoBeidian Project, other Singapore listed companies that have vested interests include Oxley Holdings (27.5% stake), Lian Beng (10.0%) and Heeton (7.5%). Approximately 5,540 residential units is targeted to be launched in 1H2017.
If you cannot get through to the bloomberg link, just google " China Plan to Create New Shenzhen Spurs Speculative Rampage" to get the news
sunview ( Date: 04-Apr-2017 14:26) Posted:
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Price surged 17% as of now to $0.645 today.
KSH will benefit from China' s plan to create a New Shenzhen at Gaobeidian in Hebei. Gaobeidian, earmarked by the government for develeopment as part of its decentralisation strategy, is a satellite city merely 19 minutes from Beijing by high speed train. KSH owns 22.5% of a 533.3ha development project expected to be completed by the middle of 2018
https://www.bloomberg.com/news/articles/2017-04-03/china-s-plan-to-create-new-shenzhen-triggers-speculative-rampage
http://www.straitstimes.com/business/property/ksh-aims-to-launch-3050-units-in-china-project
the initiation report came at a really bad timing when the Asian markets tanked today.
good set of results + record dividends + strong balance sheet + initiation report = flat share price. valuations are not cheap compared to industry peers.
http://kimsengheng.listedcompany.com/misc/KSH_Holdings_Ltd_-_Takeaways_from_company_visit-_Clear_earnings_visibili.pdf
In case the link requires one to login with UOB Kayhian account. The above link is from the Company' s website
northbridge ( Date: 13-Jun-2016 09:54) Posted:
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KSH Holdings &ndash Get Paid While Waiting. (KSH SP/BUY/S$0.69/Target: S$0.55) KSH Holdings, a construction firm with > 35 years of experience, is one of the best local construction firms in terms of margins and balance sheet. KSH offers earnings visibility for the next two years with orders recovering, development profits locked in and overseas projects in the pipeline. FY16 net cash of S$53.4m positions KSH well for an upturn in the construction/property market with attractive dividend yield for investors. Initiate coverage with BUY and a 0.93x P/B-based target price of S$0.69.
https://research.uobkayhian.com/content_download.jsp?id=34514& h=442465f5282183631234848d916ce365
i think we should ask sgx to please seriously look at KOYO INT... something really strange happening there ... by a group of people in a syndicate i think... sgx really no teeth...
HazardKoh ( Date: 06-Nov-2015 17:54) Posted:
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