Kimlun Corp Bhd, a one-stop engineering and construction services provider, is expected to benefit from the soon-to-be-announced light rail transit (LRT) extension project.
In a research note today, MIMB Investment Bank said Kimlun has the experience and technical expertise acquired from its long involvement in a Singapore mass rapid transit extension project.
It said the industrialised building system (IBS) has received strong support from the government with a stipulation that all new government projects should have at least 70 per cent IBS contents.
"The Johor Baru-based Kimlun is a full fledged IBS builder and 25 per cent of its revenue are derived from the IBS segment. This will give it a big advantage when tendering for government contracts," it said.
MIMB said the new ruling to reduce the dependence on foreign workers in the construction sector to just 15 per cent by 2010, would further strengthen the need for IBS.
"Kimlun will be able to adapt to the new ruling quickly with its heavily mechanised IBS, which requires minimal labour work," it said.
For the second quarter of this year, Kimlun registered a net profit of RM8.42 million on revenue of RM139.4 million. -- Bernama
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