- Koon Holdings managed to mitigate the rising cost of sales, attaining a GP margin of 20.9% in 2010 relative to 10.6% in 2009 despite its revenue tumbling by 42% yoy to S$74.8m.
What's our view: The Singapore government recently announced its intention to ramp up the supply of HDB flats, raising the number of new units from 22,000 to 25,000 units this year. We believe that contract wins and an improved cost structure will continue to drive the earnings for construction companies, outweighing concerns of the foreign levy hike.
We reiterate our liking for construction and civil engineering firms like Tiong Seng (TSNG SP S$0.245 BUY S$0.35).
KOON: NextInsight readers learn of immense upside potential for Koon's new pre-cast business
Written by Leong Chan Teik
Sunday, 12 December 2010 14:37
CHANCE FAVOURS the prepared mind – this saying is apt about the 25 NextInsight readers who visited Koon Holdings yesterday (Dec 11: Sat) well-prepared with questions and background information.
They gained insights into Koon's business outlook and understood better why the stock has climbed some 75% since July this year. Read more...
SHARES OF Koon Holdings have shot up by about 77% since July, from 35 cents to 62 cents recently on the Singapore Exchange.
Dual-listed in Australia, the shares are still trading at a low PE, of about 4.2X the company's last 12 months’ earnings.
Whether you are a shareholder who is sitting on good gains or you are hearing of Koon for the first time, you are invited to visit Koon’s pre-cast facility at 26 Kranji Way.
Date: 10 am, Saturday, Dec 11.
This is part of a series of company visits that NextInsight is organizing.
In recent months, we have organized visits to Trek 2000 (twice in fact), Mencast and MTQ – companies we view to have a strong future.
As for Koon, it is one of the largest domestic civil engineering players, and has played a part in various large-scale infrastructure and reclamation projects, including Punggol Serangoon reservoir and the expansion of Jurong Island.
Kim Eng Research said in a report in October that Koon had net cash of S$42 million (just below recent market cap of S$51 million), and may pay a special dividend.
To boost liquidity, Koon (www.koon.com.sg) is proposing a 1-for-1 bonus share issue.
Singapore-listed Koon Holdings says its first half net profit has surpassed the full year net profit it recorded last year.
The firm earned 4.7 million dollars in the six months ended June, overturning the loss of 3.5 million dollars from a year earlier.
For the whole of 2008, Koon Holdings made a net profit of 1.97 million dollars.
The surge in first half net profit was fuelled by a 27.4 percent increase in revenue to 70.1 million dollars, thanks to progress in major projects under its construction division.
Construction remains the group's top money earner contributing 92.9 percent of total revenue.
Going forward, the group expects this segment to remain strong with an influx of three public sector projects worth 63 million dollars.
Among these were the road, drain, sewer and soil improvement works on Jurong Island and construction works for the wetlands at Lorong Halus Landfill.
Given its competitive advantage in marine engineering, the firm hopes to ride on the burgeoning coastal engineering sector and upcoming mega scale projects including the much-anticipated International Cruise Terminal at Marina South
Koon Holdings - Profit warning Serene Lim, 22 Jun 2007
Koon Holdings says it expects to report losses before tax of between S$3.5 mln to S$4 mln for H1 2007.
This is due mainly to the additional costs for materials and increased spending due to unexpected hard bedrock encountered during the progress of a project.
The company had to spend more on building material, like concrete and rocks, due to Indonesia's ban on sand exports and the disruption of rock supply in the first half of the year.
It also held shares in a company which had been placed under compulsory insolvent position in May 2007.
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