Singapore’s Big Winner for the Week: Koh Brothers Group Ltd

Koh Brothers Group Ltd  (SGX: K75) saw its shares gain 3.4% since last Friday to close at S$0.305 this week. Given that the Straits Times Index (SGX: ^STI), Singapore’s market barometer, had moved in the opposite direction, Koh Brothers is certainly a winner here.

Koh Brothers is a “construction, property development and specialist engineering solutions provider” that was started by Koh Tiat Meng way back in 1966. Its business areas now include Construction, Building Materials, Real Estate, and Leisure & Hospitality. Apart from Singapore, its geographical reach also stretches into Malaysia, China, Indonesia and Vietnam.

The firm announced on Thursday that its joint venture (JV) with Samsung C&T Corporation had won a S$1.12 billion contract from the Changi Airport Group to develop a three-runway system at Singapore’s Changi Airport.

Koh Brothers will hold a 30% stake in the JV. Following this project, the company’s construction order book will stand at S$632 million.

For the Changi Airport project in particular, the firm has been appointed to “undertake the construction of drainage and culvert systems to ensure the runway and taxiways are free of surface water and to prevent flooding.” It will also “set up and operate batching plants to supply concrete to meet the project’s requirements.”

Francis Koh, Koh Brothers’ managing director and chief executive, commented on the contract win:

“We have crossed a significant corporate milestone with this project, representing the largest contract secured by the Group to-date. We will tap on our strength in civil engineering works and specialised capabilities in drainage work for the upcoming construction of the runway’s canals and drainage systems”.

Koh also added that his firm’s experience in constructing the Punggol Waterway and Geylang River will allow it to manage this mega development soundly.

As of Friday, Koh Brothers is trading at around 5 times its historical earnings and has a trailing dividend yield of 1.6%.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Sudhan P doesn’t own shares in any companies mentioned.