The group’s order book has also more than doubled since the start of 2025, from $230 million to more than $500 million currently, with ongoing work to secure several tenders to grow its order book.
Choo and Chan write in their Feb 19 report: “We believe 2HFY2026 will continue to be a better half as KSH builds on 1HFY2026’s positive rebound in performance.”
In the 1HFY2026, KSH’s management maintained its interim dividend of 0.5 cents, which represents a 54% dividend per share (DPR) and 1.4% interim yield. In the period, revenue rose 20% y-o-y from higher construction revenue, while gross profit rose 176% to $13.4 million with a 12.2 percentage point (ppts) uptick in margins to 21.9% as the group benefitted from newer projects after the completion of lower-margin legacy projects.
Its share of associates and JVs saw a sharp decline in losses from $8.1 million to $1.8 million, as KSH ramped up construction of its four Singapore development projects.
On this, the analysts note: “As revenue and profits are recognised on a percentage of completion basis, we expect to see contributions ramping up from the second half of FY2026.”
All in all, net profit for the period came in at $5.3 million, marking a turnaround from losses towards profitability.
Choo and Chan write: “KSH remains a beneficiary of the construction recovery with its track record across laboratory and research developments. The group is backed by a net cash of $53.4 million, representing 27% of market cap.”
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With this, the analysts’ earnings forecast for the FY2026 and FY2027 remain unchanged.
Meanwhile, gross margins in the 1HFY2026 expanded to 21.9%, thanks to the completion of lower-margin projects and better cost-management.
On this, Choo and Chan note that industry prospects “remain favourable” with demand “likely to remain strong” with Singapore Building and Construction Authority (BCA) forecasting between $47 billion and $53 billion in construction contracts for 2026, similar to 2025.
They write: “The group continues to focus on the smooth execution of existing projects while actively and selectively pursuing tenders. KSH remains well-positioned to capture new opportunities arising from Singapore’s construction upcycle, leveraging its strong track record in areas including the laboratory construction space.”
“Contracts that KSH bid for typically require a pre-qualification process, narrowing the field of eligible competitors and providing better margins,” add the pair.
On the four JVs the group is involved in, The Arcady at Boon Keng, Sora, One Sophia, The Collective and Bagnall Haus, Choo and Chan note that these projects have achieved “satisfactory sales”, with “positive margins” expected since their respective launches.
KSH’s share of unrecognised attributable revenue from sold property development units in Singapore amount to about $168 million, which will be recognised on a percentage of completion basis.
Overall, the analysts see that their target price of 51 cents is a “fair valuation” given that KSH possesses quality tangible assets, it is backed by net-cash and a “likely beneficiary” of the recovery in construction.
Shares in KSH Holdings closed 0.5 cents higher at 36.5 cents on Feb 20.
