Lim and Tan Securities analysts maintain an &ldquo accumulate&rdquo call on KSH Holdings, citing a recovery in both top-and-bottom-lines driven by increased construction revenue and better margins. The analysts expect continued positive performance in 2HFY2026, with contributions from KSH&rsquo s four Singapore development projects ramping up. They believe KSH is well-positioned to benefit from the construction upcycle, with a strong track record and a focus on executing existing projects and selectively pursuing tenders.

The construction and property group is eyeing more laboratory construction projects, given its strong track record in the sector

 

[SINGAPORE] In view of China&rsquo s prolonged economic slowdown and rising geopolitical tensions, construction and property group KSH Holdings is hedging its bets and doubling down on the Singapore market for growth.

 

Executive chairman and managing director Choo Chee Onn is banking on the Republic&rsquo s construction upcycle to drive the group&rsquo s topline, as he looks to dial back its overseas real estate development and investment activities over the next few years.

 

Currently, KSH is developing two residential properties in Gaobeidian, China with joint venture partners. Its portfolio includes stakes in a retail office asset in Tianjin, on top of several hospitality assets across the United Kingdom and Japan.

 

&ldquo There&rsquo s just too much uncertainty around the world,&rdquo Choo told The Business Times in an exclusive interview.

 

&ldquo With so many conflicts and trade tensions, it&rsquo s better for us to concentrate on Singapore at the moment.&rdquo

 

The group&rsquo s latest financial performance gives him good reason to look inwards.

 

Following two years of pandemic-induced losses, KSH returned to the black with a net profit of S$5.3 million for its latest half-year ended Sep 30, 2025. This reversed a loss of S$6.5 million in the year-ago period.

 

Revenue in H1 FY2026 rose 19.7 per cent on the year to S$63.1 million, driven by higher contribution from its core construction business in Singapore. Construction brought in 90 per cent of group revenue, with the rest from property investments.

 

&ldquo Our strategy was to finish all our loss-making jobs (during Covid-19),&rdquo said Choo, adding that the group took on new construction projects from 2024.

 

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This included laboratory refurbishments and the construction of a hostel at the National University of Singapore as well as building the Founder&rsquo s Memorial at Bay East Garden, all of which contributed to profit margins. 

 

As at November, its order book in Singapore exceeds S$500 million and is expected to contribute to the group&rsquo s financials up to FY2029. 

 

Choo is currently working on securing more contracts, with the aim of adding an additional S$500 million &ndash S$250 million by end-FY2026 and another S$250 million by Q1 FY2027 &ndash to bring the total order book to S$1 billion.

 

Shares of KSH closed at S$0.36 last Friday (Dec 26), putting the company&rsquo s market capitalisation at S$205.1 million.

 

Leveraging on lab niche

While KSH has undertaken residential, industrial and other large-scale projects across public and private sectors, Choo aims to leverage the group&rsquo s particularly strong track record in laboratory construction in the near term.

 

He foresees more of such tenders to be launched as Singapore pumps increasing amounts of investment into research and development.

 

To date, KSH has completed nearly S$700 million worth of laboratory and research-related projects across industries, ranging from electronics to biomedical to livestock. 

 

Said Choo: &ldquo Compared to condominiums or other industrial projects, labs are much more complex to construct due to stringent regulatory compliance requirements.&rdquo

 

KSH has sought to strengthen its competitive advantage in this niche. In 2024, it expanded into design-and-build services for laboratories, beginning with its first such project for Changi Airport Group.

 

Under this model, it works directly with architects and consultants to design the facility to clients&rsquo requirements, rather than being engaged solely for construction.

 

The group is also eyeing substation projects, alongside healthcare facilities education and training institutions and defence-related critical infrastructure. 

 

To keep up with the expected uptick in construction activity, KSH has increased its headcount by 20 per cent over the past year. This includes bringing onboard more engineers, quantity surveyors and architect coordinators, said Choo.

 

Reducing overseas exposure

At the same time, Choo intends to scale back KSH&rsquo s real estate development and investment exposure abroad, at least for FY2026.

 

In China, KSH&rsquo s two ongoing residential developments under the Singapore Sino Health City project in Gaobeidian county have been hit by a downturn in the property market. 

 

Acknowledging the challenging conditions, Choo said: &ldquo There are some sales, but they have been quite slow&hellip the confidence level (for China) is not there.&rdquo

 

The group has therefore decided to slow down the pace of completion of the project, having already built 3,000 of 18,000 planned units. It owns an equity stake of 22.5 per cent and 33.75 per cent in both residential developments.

 

On the property investment front, KSH&rsquo s retail and office complex in Tianjin &ndash of which it has a 69 per cent stake in &ndash continues to chalk up an occupancy rate of 60 per cent. This is down from a rate of 80 per cent to 90 per cent pre-pandemic, Choo noted. 

 

He observed that while the Chinese market has experienced downturns in the past, recoveries then were &ldquo very fast&rdquo , taking about &ldquo one to two years&rdquo . 

 

But he is not optimistic for a similarly quick rebound this time. In fact, Choo is already preparing for a possible exit from China, should economic conditions fail to improve.

 

&ldquo If the economy doesn&rsquo t turn around in the next three to four years, we have a plan to exit China,&rdquo he said.

 

The outlook is also uncertain for the group&rsquo s other overseas investments, which comprise hotels and resorts across the UK and Japan. 

 

Choo noted that the UK tourism industry has been impacted by geopolitical tensions such as the ongoing trade war, while Japan&rsquo s tourism sector has taken a hit from its recent diplomatic rift with China. 

 

Stronger domestic focus

Accordingly, KSH will stay grounded in Singapore in tandem with the recovery of the construction and real estate sectors.

 

Between 2026 and 2029, the Building and Construction Authority expects total construction demand to range between S$39 billion and S$46 billion per year.

 

Said Choo: &ldquo At this moment, we don&rsquo t have plans to look at overseas markets&hellip Singapore is our homeground, we know it much better than any other markets.&rdquo

 

Still, he intends to take &ldquo calculated risks&rdquo to prevent a repeat of KSH&rsquo s pandemic-era losses. This means taking on projects that can be completed in a shorter timeframe, within two to three years.

 

For instance, the group &ldquo is not very keen&rdquo to enter joint ventures for the construction of Changi Airport&rsquo s Terminal 5, even though it has been approached by foreign contractors.

 

&ldquo If we can avoid risks, we will,&rdquo said Choo, noting that the primary risk for Terminal 5 lies in the long-term nature of projects.

 

&ldquo If another Covid-19 happens, we have nowhere to run.&rdquo

 

As for property development, KSH is currently involved in four joint ventures to develop three residential projects and one mixed-use development in Singapore. All have recorded steady sales since their respective launches.

 

However, with the &ldquo hot&rdquo residential market, Choo is concerned that the government could introduce more cooling measures that could put a dent on sales.

 

He is thus leaning towards the development of industrial properties, noting that the group&rsquo s healthy cash position provides it with a war chest to pursue &ldquo good opportunities&rdquo that may arise.

 

As at end-September, KSH had fixed deposits, cash and bank balances of S$114.5 million, slightly down from S$120.7 million in the year-ago period. 

 

Total loans and borrowings stood at S$61.1 million for the half year, down from S$65.9 million in FY2025, while gearing ratio improved to 20 per cent from 22 per cent.

 

&ldquo We hope to expand our property development (portfolio) in Singapore over the next two to three years, if the market is still going strong.&rdquo  

 

KSH Holdings reported earnings of $5.3 million for 1HFY2026, a strong turnaround from the $6.5 million loss recorded in the same period last year.

 

Group revenue rose 19.7% y-o-y to $63.1 million, supported mainly by higher contributions from the construction segment, which benefitted from stronger work progress across ongoing projects. The decline in rental income from investment properties was attributed to the weaker RMB affecting contributions from the PRC.

 

Other income fell to $4.5 million, due largely to lower gains from the disposal of plant and equipment (down $1.4 million) and a $0.9 million reduction in interest income.

 

As at Sept 30, 2025, the Group maintained a healthy financial position with $114.5 million in cash, bank balances, and fixed deposits. Total loans and borrowings fell by $4.8 million to $61.1 million, improving the Group&rsquo s gearing to 0.22x.

 

The Board has declared an interim dividend of 0.5 cent per share.

 

On Nov 13, the Group announced that wholly-owned subsidiary Kim Seng Heng Engineering Construction secured a new construction project, bringing the Group&rsquo s Singapore construction order book to over $500 million.

 

Analyst William Tng of CGS International (CGSI) sees that construction and property player KSH Holdings (KSH) is trading below its historical book value. Based on the stock&rsquo s closing price of 37 cents on Sept 30, Tng notes that KSH is trading at a historical FY2025 price-to-book value ratio (P/BV) of 0.72 times, while its historical dividend yield based on its FY2025 dividend per share (DPS) of 1.25 cents is 3.38%.

 

As at March 31, KSH was in a net cash position of $57.2 million, with the group also paying dividends for the past 3 years.

 

In the FY2025 ended March, KSH&rsquo s net loss narrowed to $5.9 million from $31.0 million in the FY2024.

 

Tng writes in his Oct 1 non-rated report: &ldquo KSH derives its revenue mainly from the construction sector. As its property development and property investment businesses are held mainly via joint-ventures (JV), their financial performance is recognised via share of associates/JVs profit.&rdquo

 

In the FY2025, losses from KSH&rsquo s property development and business amounted to $13.0 million. The increased losses from FY2024&rsquo s $5.0 million loss were mainly attributable to the property development projects undertaken by associates and JVs.

 

&ldquo Significant pre-launch, financing, marketing, and operating expenses were fully recognised during the year, while revenue recognition was limited under the percentage-of-completion method, as construction had either not commenced or remained at an early stage as at end-FY2025,&rdquo adds Tng.

 

Meanwhile, according to the group&rsquo s FY2025 annual report, its construction business turned around in the FY2025 with a net profit of $7.8 million versus a net loss of $22.3 million in the FY2024.

 

Looking forward, KSH remains positive on its outlook for the construction industry in Singapore. The group on Aug 22 announced that its construction order book had increased to $315 million, with it actively working on several tenders to further increase its order book. The group&rsquo s management also guided that this order book is expected to contribute to the group&rsquo s financial results over FY2026 to FY2027.

 

On Aug 21, KSH announced that it had successfully completed the sale of 28.9 million treasury shares at 30.5 cents per share to institutional and individual investors.

 

Tng writes: &ldquo KSH has earmarked the net proceeds of $8.7 million for working capital usage. With the placement of the treasury shares, the four major shareholders of KSH hold a combined 58.7% stake in KSH as at Aug 22.&rdquo