KSH Holdings: Expect Cityscape boost in quarterly

results ahead -OCBC Research 

We conducted an independent visit to Cityscape@Farrer  Park yesterday and found that 61% (152 out of 250 total  units) have been sold to date, up significantly from 22%  sold as of end Jun 2012. After visually inspecting the  construction site, we judged it likely that progressive

recognition for Cityscape would begin in 2QFY13 and boost  earnings (to be announced in mid Nov 2012) by an  estimated $3.5m to S$4.5m. This would drive a substantial  YoY increase over last year’s quarterly PATMI of S$5.2m.  Since we have upgraded KSH to a Buy on 21 Sep 2012, its  share price has appreciated 31%. We still see significant  upside at current price levels , however, against our fair  value estimate of S$0.50 (40% discount to RNAV). In  particular, we see the upcoming results as a postitive near term  catalyst, while the company’s fundamentals continue to strengthen as sales conversions continue at a healthy  pace across its property developments. Reiterate BUY as  our key small-cap conviction idea.