Moving forward, KSH’s construction margins are expected to improve, thereby boosting its earnings to between $17 million to $21 million over the next two years, the analysts estimate. The earnings expectations puts KSH’s forward P/E at 13 times and its prospective P/E at 11 times.
The group’s management also expects to boost its construction order book to above $500 million this year, from last year’s $200 million, which will help boost its business visibility ahead, the analysts write.
They add that the group is “well-positioned” to hit its target on the back of a resurgence in construction activities in Singapore. In a September interview with The Edge Singapore, KSH Holdings’ executive chairman and managing director, Choo Chee Onn, said the group is looking to focus its energies on Singapore in the next couple of years.
KSH, which is also involved in property development, has recorded pre-sales of $162 million across its four joint venture projects in Singapore. These will start contributions in the new year ahead, boosting the group’s bottom line.
See also: RHB holds ST Engineering's price target at $9.10 following record quarterly order wins
The analysts also note KSH’s higher final dividend of 0.75 cents in FY2025, bringing the full year’s total dividend to 1.25 cents, up from FY2024’s 1 cent, which indicates that management sees better times ahead.
Overall, Loo and Chan are forecasting KSH to report revenue of $239.8 million in FY2026, 31% higher y-o-y, and a turnaround in net profit to $17.3 million.
They note that the group’s recent placement of its 28.9 million treasury shares to institutional and other investors at 30.5 cents per share will raise $8.7 million. The proceeds will be utilised for KSH’s working capital purposes, and to enhance trading liquidity and broaden its shareholder base.
In addition to their “accumulate” call, the analysts have given a sum-of-the-parts (SOTP)-based target price of 51 cents, which represents a potential upside of 24%. Based on their estimates, KSH is trading at an “undemanding” 0.8 times P/B. This is supported by the group’s strong net cash position of $66 million or 28% of its market cap and dividend yield of 4%.
As at 3.44pm, shares in KSH are trading flat at 41 cents.
