Johor-based Kimlun jumps on more contract wins

Engineering and construction services provider Kimlun Corp Bhd closed at its 4-year high of RM1.11 on Apr 22. The counter surged 44.7% in the past year, a commendable performance given that it hit a low of 70 sen last July.

Kimlun appears to be riding on the hype on Johor-based counters. Surely, things are looking rosy for the Johor-based company after bagging a construction contract worth RM150 million for a serviced apartment development project in Johor Bahru.

It was appointed as the main contractor for the Aliva Mount Austin residential project from Astaka Development Sdn Bhd, a subsidiary of Singapore-listed Astaka Holdings Limited. The project, which sees an estimated gross development value (GDV) of RM254 million, has achieved a 70% take-up rate since its commercial launch in December last year.

This is because more international buyers, particularly from Singapore, have been actively looking for properties in Malaysia as their second home or investment. Kimlun said it has successfully applied to the Johor state government to reduce the minimum threshold for foreigners to purchase property to start from RM500,000 from the current minimum threshold of RM1 million.

In January, it secured a construction contract worth RM133.6 million from Sunway Parkview Sdn Bhd for main building works in Johor Bahru. The latest projects secured todate pushed Kimlun’s total order book to RM2.4bil.

As at Dec 31, 2023, Kimlun has an estimated construction balance order book of about RM1.9 billion. With the latest contract wins, the company should be able to achieve its FY24 replenishment target of RM700 million.

As it is, there are more jobs waiting for approvals such as the Phase 2 of Sabah-Sarawak Link Road, Pan-Borneo Highway, Johor-Singapore Rapid Transit System, road upgrading works in Johor and affordable housing projects.

Financially, Kimlun has fared better. It returned to the black for the financial year ended Dec 31, 2023, with a net profit of RM7.06 million against a net loss of RM7.23 million in the previous.

Revenue rose by 12.8% to RM852.57 million from RM756.13 million a year ago, due to higher sales revenue in its construction division. Investors should be excited over Kimlun’s ability to clinch more projects and cost management, paving the way to better profitability moving forward.