FY14 Full Year Results of Keong Hong

Keong Hong just released its FY14 Full Year Results.  The results are very much in line with my expectation.

Revenue increased by 86.1% but gross profit reduced by 0.3%.  The gross profit margin decreased from 20.7% in FY2013 to 11.1% in FY2014 due mainly to:

• higher wages, labour levies and costs incurred for the work safety; and
• lower margin for new projects in the initial stages of the construction

Profit before tax is $23,618k, which is 7.3% lower than that of FY13.  Cash and cash equivalents as of 30 September 2014 increased to $38,726k from $18,218k as of 30 September 2013. Borrowing has increased to $21,423 compared to $3,005k a year ago.  Net cash generated form operating activities of $47,069 is very strong.

Earning per share is 8.43 cents on a fully diluted basis.  Based on the last closing price of 38.5 cents, PER is only 4.6.  NAV is 34.1  cents and P/B is 1.13.

Cash, financial assets and convertible bond (in Kori) add up to $43,666k while borrowing totals $21,413k.  Net cash is $22,253k or 9.5 cents per share.  EX-cash PER is only 3.4.

Final dividend is 1.25 cents.  Interim divided was 1 cent before the 1 for 2 bonus issue; it is 0.67 cents when adjusted for the bonus issue.  Total divided per share after adjusting for the bonus issue is 1.92 cents, which translates to dividend yield of 4.98%.

Keong Hong's 1H15 is expected to be excellent as the profit for Twin Waterfalls -- estimated to be $17.4m or 7.4 cents per share -- will be booked.