- Kimlun Corporation Bhd ended 2013 with a RM115.4mil job win to construction apartments in Johor Bahru, Johor.

- On Dec 31, Kimlun announced on Bursa Malaysia that it has accepted a letter of award from Country View Resources Sdn Bhd, a wholly-owned subsidiary of Country View Bhd, to construct apartments in Johor.

- The construction work is expected to be completed by Dec 2015.

- The new award has brought Kimlun’s new job wins in 2013 to a record of RM1.2bil.

- We expect the new job wins to only contribute strongly from FY14F onwards, as 70% of these were only secured in the 2H of FY13.

- We have a new order book assumption of RM900mil/RM1bil/RM900mil for FY14F-FY16F.

- Potential jobs in the near-term include the tunnel lining segment package (worth ~SGD100mil) for the Thomson MRT line while Kimlun will benefit from KVMRT2 jobs in the mid-to-long term. Kimlun will also benefit from further construction activities in Iskandar Malaysia.

- Shareholders will be voting today for a proposed 1-for-4 rights issue, which come with free detachable warrants.

- The rights issue is expected to raise RM66mil while the detachable warrants will have an exercise period of 10 years. With an indicative price of RM1.10/rights share, FY14F-15F core EPS will be diluted by 17.5% and 20% respectively to 19.4 sen and 21.3 sen.

- Amid headwinds in the construction sector, we continue to like Kimlun as a proxy to construction activities within Johor as well as MRT jobs in Klang Valley and Singapore. Maintain BUY. 

Source: AmeSecurities