21 August 2012

King Wan (Introduction)

King Wan Corporation Pte Ltd was incorporated in Singapore on 8 February 2000. In line with the change of its status to a public limited company, it was renamed King Wan Corporation Ltd on 7 November 2000. The Group is principally in the business of providing mechanical and electrical (M&E) engineering services. Its customers are mainly contractors in Singapore who are engaged in property development in public and private residential sectors. M&E systems offered by the Group include:- (a) plumbing and sanitary systems; (b) electrical engineering systems; (c) fire protection and alarm systems; (d) air-conditioning and mechanical ventilation systems; (e) communications and security systems; and (f) underground pipeline communication systems. The Group also supplies, delivers and services portable lavatories to various sites, such as property development work sites and areas where public events are conducted. The Group currently owns 714 portable lavatories, commonly referred to as mobile toilets which are leased out to main contractors and event organisers.

Since its customers mainly come from property development sectors, its revenue trend basically is  similar to property development sector.

For last 5 years, it distributed dividend range 0.225c to 1.3c except for the year 2009. For recent quarterly report release, it had achieved lower revenue (-25%) and net profit (-75%) and has 0.41c EPS. The decline in turnover was due to lower revenue recognised on M&E contracts during the quarter. The decline in net profit are:

1. Lesser rental income after disposal of investment property at Jurong Port Road
2. Lesser Share of Associates' Result, especially from Ekarat Pattana, group's 20% associate in Thailand

Nonetheless, NAV stands at 24.32c and S$78M Cash pile due to liquidation of its two Thai Associates as well as dividend payment of $3.67M from EPPCO & Ongoing M&E oprations. The group now has S$156.5M worth of M&E engineering contracts, with completion dates ranging from 2013 to 2015.  

Chart 1: 5 Year Share Price. Source: ShareInvestor.com

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