0 koon financial analysis-final edition

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Koon Holdings Limited

Financial Analysis

Group members: Orange, Lolita, Emily, LuYao, Tommy

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Introduction Industry brief introduction Financial analysis Auditor’s comments Conclusions & Recommendations

Outline

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Introduction about Koon Holdings Limited

Part 1

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Koon Holding Limited (“Koon”), an investment holding company, was incorporated specifically for listing on the Australian Securities Exchange(“ASX”) and Singapore Exchange Limited(“SGX”). KCTC is the main operating company of the Group.

The “ Group” is one of Singapore's leading infrastructure construction and civil engineering group with an established track record of over 30 years.

An introduction About Koon

Part 1

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Began in 1975 as a small sole proprietorship Koon construction and Transport Co,Pte Ltd (“KCTC”)

was incorporated and raised capital in 1979 Joint venture with a major marine engineering

company, Zinkcon, to form Koon-Zankcon in 1985. The success of the joint venture, prompted the

management to formalize arrangement and Koon-Zinkcon Pte Ltd (“KZ”), was incorporated in 1997.(KCTC still has 50% shares of KZ)

The history of groupPart 1

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Construction Division (one of largest in Singapore civil engineering, reclamation and shore protection specialists)

Plant and Equipment Rental Division (rental the plant and equipment which owned by Koon)

Precast Division

Group business divisionsPart 1

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Group StructurePart 1

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In the latest forecast, the HDB expects new Build-To-Order (BTO) flat launch, which will add to strong demand for precast products from Koon.

There are also considerable cost pressures affecting labour and raw materials. The tight labour market is also a concern.

The Group’s transformed business model remains on track to diversify revenue base and build more recurring revenue.

Focus on more value added products and solutions to offer to customers.

OutlookPart 1

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Industry Brief Introduction

Construction & Engineering

Part 2

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Business Description Koon Holdings Limited(KNH) is an investment

holding company based in Singapore, with expertise in four divisions.

Company Overview

infrastructure construction

& civil engineering

plant and equipment

rental

precast concrete

worksinvestments

Part 2

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Market Comparison

Earnings

P/E Ratio

P/B Ratio

P/E Growth

P/S Ratio

Koon (KNH)

0.20 4.28 0.90 -- 2.53

Market

1.35 10.93 1.11 2.17 2.82

Sector 1.12 11.6 1.07 0.63 0.56

Part 2

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Construction &

Engineering

Koon Holdings(KNH)

Leighton(LEI)

Monadelphous(MND)

UGL(UGL)

Clough(CLO

)

Peer ComparisonPart 2

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Peer ComparisonPart 2

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Financial Analysis

Part 3

• Financial Figures & Ratios

• Financial Outlook

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Group recorded lower revenue of S$35.7 million, down 3.7% from the previous corresponding period.

Profitability

Source: press release in June 2011

Revenue34,500

35,000

35,500

36,000

36,500

37,000

37,500

1H20101H2011

3.7%

Part 3

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Revenue from the Construction division declined but was partially mitigated by an increase in revenue contribution from the Precast division which grew 71.0% to S$6.3 million.

Profitability

80%

2%

18%

Revenue Breakdown by Divisions 1H2011

ConstructionPlant and Equipment RentalPrecast

71% Revenue Growth

13.6% Revenue Decrease

Part 3

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ProfitabilityS$'000 1H2010 1H2011 Change %

Revenue 37,028 35,662 (3.70)

Gross Profit 3,013 7,884 (61.80)

Other income 9,597 770 1146.40

Profit Attributable to Shareholders

6,318 6,029 4.80

Earnings per Share 3.85 3.68 4.60

lower Gross Profit margin due to newly setup, technical design and production-related costs.

Net profit attributable to shareholders rose due to the gain on disposal of leasehold property and dividend income received.

Part 3

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Growth in Net Earnings Margin, ROA, ROE

Ratios

2008 2009 20100.00%

5.00%

10.00%

15.00%

20.00%

25.00%

30.00%

35.00%

Valuation

Net Earnings Margin Return On Asset (ROA)Return On Equity (ROE)

Part 3

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Credit is well managed.

Ratios

2008 2009 20100

0.2

0.4

0.6

0.8

1

1.2

1.4

1.6

Current Ratio

Part 3

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Auditor’s comments

Part 4

From Deloitte & Touche LLP

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1. The consolidated financial statements (Financial position and Statement of changes in equity ) are drawn up.

2. The accounting and other records （ company and by those subsidiaries incorporated) have been properly kept in accordance with the provisions of the Act。

OpinionPart 4

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Cash flow statement Analysis

--- The importance of cash flow

Part 4

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Part 4

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2010Y 2009Y

Income tax paid (2,321) (1)

Purchase of property, plant and equipment (6,147) (4,109)

Repayment of bank loans (1,983) (593)

Dividend paid (2,050) (810)

Net cash (used in) from financing activities (1,921) 175

Big differencePart 4

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S$'000

Net cash from operating activities 2,349

Net cash from investing activities 161

Net cash from financing activities (2,049)

Net increase in cash and cash equivalents 461

Cash and cash equivalents at June 30 22,979

Consolidated statement of cash flows (ended 30 June 2011)

Part 4

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Part 5

Conclusions & Recommendations

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Founded in 1977

One of Singapore’s largest civil engineering, precast, reclamation and shore protection specialists.

Listed on Australia Stock Exchange on 11th July 2003

Listed on Singapore Exchange Securities Trading Limited (SGX) SESDAQ on 21st July 2003 and was upgraded to Main Board on 4th February 2010.

Key FactsPart 5

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Competitive Strengths &Industry OutlookCompetitive Strengths

1.BCA A1 Category in Construction-Civil Engineering (eligible to tender for public projects of unlimited value);

2. Wide Range of products and services;

3.Strong Industry Recognition

4.Experienced Management Team

Part 5

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Competitive Strengths &Industry Outlook

Industry Outlook

Part 5

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Competitive Strengths &Industry Outlook

Competitive Strengths

Part 5

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Competitive Strengths &Industry Outlook

1. Comprehensive Range of Precast Products

2. Quality Assurance –ISO 9001:2008

3. Trademark and License –BCA L6 licenses

4. Strong Collective Efforts

5. Partnership and support from Koon

Competitive Strengths

Part 5

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Competitive Strengths &Industry Outlook

Industry Outlook1.BCA A1 Category in

Construction-Civil Engineering (eligible to tender for public projects of unlimited value);

2. Wide Range of products and services;

3.Strong Industry Recognition

4.Experienced Management Team

Part 5

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Competitive Strengths &Industry Outlook

Industry Outlook

Part 5

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Competitive Strengths &Industry Outlook

1.Owns 48.9% ordinary shares and 18.9% preference shares in Tesla

2.Acquires 51% of the issued capital in GPS Alliance Holdings PL.

Part 5

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Financial Highlights

SGD Million 1H 2011 1H 2010 Change

Revenue35.7 37.0 (3.7%)

Gross Profit3.0 7.9 (61.8%)

Other Income9.6 0.8 +1， 146.

4%

Profit Attributable to Shareholders

6.3 6.0 +4.8%

Non –Operating income buffered the decrease In profit from the Construction and Precast divisions

Part 5

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Financial HighlightsPart 5

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Recommendation

2008

2009

2010

2011

2012

Part 5

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Recommendation

P/E Ratio

Company

3.62

Industry 35.72

Sectors 22.18

Investment Recommendation :Sell

Part 5

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Thank you!