KSH Holdings

[ngcheeki]

After securing contract on 19th May 2011 for Ardmore 3 Project from Wheelock, KSH today secures another project 8
Courtyards for 138.4 millions and this increased its order book to $360 millions. See the following for more information.

KSH CLINCHES EIGHT COURTYARDS CONTRACT WORTH S$138.4 MILLLION
- Boosts order book to S$360 million

http://info.sgx.com/webcoranncatth.nsf/V...C0016153E/$file/KSH_Eight_Courtyards.pdf?openelement

[iff]

With the low interest rates, ppty craze is still continuing its momentum..
More BTO projects are being planned, and more land being supplied for residential development,
My view is construction business will gain good profits, currently I'm holding onto KSH and LianBeng..

(vested)

[freedom]

my thought about this company:

1. earning from construction was very good. construction order book is building now. 2007 - 2008 was exceptional year when it was awarded tons of private residential project.

2. property development was somehow disappointing. Lincoln Suites clearly is a loss. CityScape seems not selling well. The Boutiq is quite successful. There are still other coming property development, could be trouble if property crashes. On the surface, it seems that the company is in a strong balance sheet. But there is tons of leverage hidden in its property joint ventures. The company provides shareholder loan to its property joint ventures, as well as corporate guarantee for obligation of its property joint ventures. If any of its property joint venture can't sell well and sell fast, it might have serious liquidity problem.

[mrEngineer]

2. project development was somehow disappointing. Lincoln Suites clearly is a loss. CityScape seems not selling well. The Boutiq is quite successful. There are still other coming property development, could be trouble if property crashes. On the surface, it seems that the company is in a strong balance sheet. But there is tons of leverage hidden in its property joint ventures. The company provides shareholder loan to its property joint ventures, as well as corporate guarantee for obligation of its property joint ventures. If any of its property joint venture can't sell well and sell fast, it might have serious liquidity problem.

Hi freedom, thanks for sharing your analysis. I learn something new about project development companies now and the risks I need to take note of.

[iff]

my thought about this company:

1. earning from construction was very good. construction order book is building now. 2007 - 2008 was exceptional year when it was awarded tons of private residential project.

2. property development was somehow disappointing. Lincoln Suites clearly is a loss. CityScape seems not selling well. The Boutiq is quite successful. There are still other coming property development, could be trouble if property crashes. On the surface, it seems that the company is in a strong balance sheet. But there is tons of leverage hidden in its property joint ventures. The company provides shareholder loan to its property joint ventures, as well as corporate guarantee for obligation of its property joint ventures. If any of its property joint venture can't sell well and sell fast, it might have serious liquidity problem.

Thanks for the sharing,
I think it's also something new for me about the joint venture risks involved.

[ngcheeki]

KSH Holdings initiated its first daily share buy back of 766,000 shares between $0.22 and $0.215. The total amount is $167,798.89. Bearing for unforeseen circumstances, the company will pay an interim dividend of 1 cent. See the following for more details:

http://info.sgx.com/webcorannc.nsf/Annou...endocument

Coincidentally, OCBC upgraded the stock from hold to buy. See the following for more details.

http://www.remisiers.org/cms_images/rese...13-OIR.pdf

[freedom]

surprised to see REZI 26 sold 90 units in the first month of launch at median price of 1,161 psf (lowest 704, highest 1,384)

are shoebox units still so popular?

[ngcheeki]

It seems like KSH Holdings 45% owned Rezi 26 (mainly shoebox units) is selling like hot cake. Based on the land cost of $375 psf, the breakeven price should be around $700 psf. By the way, before today (15 Nv) announcement S&P report released on 9 Nov already indicated the sale result of Rezi 26.

http://research.sgx.com/reports/rpt_view.pl?id=6610

Rezi Profile
Typical Units
1 bedroom: 409 – 484 sqft (46 units)
1 + Study: 495 – 603 sqft (7 units)
2 bedroom: 753 – 797 sqft (23 units)
3 bedroom: 980 – 1,087 sqft (16 units)
Penthouse Units
1 bedroom: 807 sqft (1 unit)
2 bedroom: 646 – 958 sqft (8 units)
3 bedroom: 1,184-2,045sqft (5 units)
TOTAL: 106 units

[ngcheeki]

Update: Rezi 26 Nov 11
Cumulative Units Sold to-date: 94
Median Price ($psf) in the Month: S$1,115
Units sold in Nov: 6
Cumulative Units Launched but Unsold: 12
Total Number of Units: 106
88.67% out of the total number of units.

CITYSCAPE @FARRER PARK sold 3 units @ median price of $1,478 in Nov (22.4% sold of total 250 units)
LINCOLN SUITES sold 1 units @ median price of $2,106 in Nov (78.8% sold of total 138 out of 175 units)
THE BOUTIQ no slae in Nov (71.5% sold of total 93 out of 130 units)

[freedom]

something more interesting based on Q2 financial statement.

as its development property account decreases (recognition of revenue from Lincoln Suites), it is reducing its bank term loan under non-current liability. It is using its current asset to offset its non-current liability. with time, eventually, it might have a current ratio of less than 1 assuming that development property are fully recognized to offset the non-current liability and no cash is back to current asset. If KSH continues to increase its investment in its associates and/or property joint venture, the cash will be drained even faster. the current ratio will become less than 1 even faster.