Review of KSH's 1H2014 Results

KSH's 1H15 results was released last night.  It is not pretty but surprisingly the management is cautiously optimistic of its performance in 2015.  I will continue to hold the stock for the reasonably good dividend.

Here are the key information:
Revenue decreased by 20.5% mainly due to decrease in revenue in construction business.

Shares of results of associates and JVs decreased by 29.1% mainly because of decrease in sales and percentage of completion recognized on the development property projects in Singapore.

As a result of the above, net profit attributable to owners of the company decreased by 44.6%.

Management guided that labor supply for construction industry will be stabilizing.

Order book on construction projects in Singapore stood at $426m as at 30 September 2014 ($490m as at 31 July 2014).

Most of the existing residential development and mixed development properties under the Group such as Lincoln Suites; Cityscape@FarrerPark; The Boutiq; Sky Green; Rezi26; Palacio; NeWest; KAP&KAP Residences and etc, have already been completely or substantially sold with prices within or better than expectation. The launched commercial and office property development projects under the Group are within expectation in both sales volumes and prices.

The Group’s 25% owned Prudential Tower continues to generate good recurring rental income given its prime location.

The Group is cautiously optimistic on the outlook of its performance in FY2015.

NAV is 54.9 cents and if the EPS for the next two quarters are the same as this quarter, EPS for the whole year is expected to be 6.65 cents, translating to a PER of 8.0 based on share price of 53.0 cents.