Kimlun Corporation Berhad: A Construction Giant Riding Malaysia's Infrastructure Boom

Kimlun Corporation Berhad (KLSE:KIMLUN) has emerged as a standout performer in Malaysia's construction sector, fueled by a 19% weekly stock surge in July - adding to a remarkable 103% three-year return. This trajectory reflects not just short-term momentum but a deliberate transformation: the company has pivoted from years of losses to sustained profitability, driven by strategic contract wins, a robust order book, and a dividend reset that signals investor-friendly policies.

text2img*A construction crane towering over Kimlun's pre-cast concrete plant in Malaysia, symbolizing growth and infrastructure development

From Losses to Profit: The Turnaround Story

Kimlun's turnaround is no accident. After posting losses in FY2022, the company reported a net profit of MYR50.78 million in FY2024—a 739% jump from FY2023. This shift was powered by two critical factors:
1. Revenue Growth: FY2024 revenue surged 42% to MYR1.21 billion, fueled by new contracts worth MYR2.17 billion. Key wins include the Senai-Desaru Expressway and Singapore's Mass Rapid Transit (MRT) projects, showcasing geographic diversification.
2. Operational Efficiency: Gross margins improved to 8.2% (from 7.2% in FY2023), reflecting better cost management and higher-value pre-cast concrete solutions.

The Order Book: A Shield Against Volatility

Kimlun's order books total MYR3.4 billion (MYR3.1B in construction, MYR300M in manufacturing), ensuring visibility for 2–3 years. This is a critical advantage in a sector prone to project delays. Notably, 50% of contracts are government-backed, such as the Johor-Singapore Rapid Transit System (RTS), which provides stable cash flows. The recent RM800 million Arden skyscraper project in Johor Baru—developed with Astaka Holdings—adds further momentum.

visualKimlun's stock price performance over three years (2022–2025)**

Dividends and Insider Buying: A Bullish Signal

The company's final dividend of 2.0 sen per share (a 100% increase from prior years) underscores its financial health. With a current yield of 1.92%—well above Malaysia's 2.8% government bond yield—the dividend is a compelling income play.

Insiders have also been buyers:
- MR Sim Tian Liang (executive director) purchased 200,000 shares in June 2025.
- MR Pang Tin @ Pang Yon Tin (director) made multiple purchases, including 50,000 shares in March 2025.

Such activity aligns with the stock's technical rebound, with a “hammer line” candle on May 19 signaling a potential bottom.

Catalysts: Malaysia's Infrastructure Boom

Kimlun sits at the heart of Malaysia's infrastructure expansion:
- Transportation: Projects like Penang's Mutiara LRT (RM13 billion) and the Perlis Inland Port (RM492 million) will boost demand for construction services.
- Renewables: The company's pre-cast concrete division is tapped into green projects, such as Sarawak's 1 GW floating solar initiative and Singapore's MRT expansions.
- Urban Development: Projects like Madani City (RM4 billion) and Seremban Sentral TOD (RM2 billion) highlight demand for mixed-use and transit-oriented developments.

Risks to Consider

• Macroeconomic Headwinds: A slowdown in property demand or delays in government funding could disrupt timelines.
• Competition: Firms like Gamuda Berhad and YTL Corp remain formidable rivals.
• Execution Risks: Over 50% of revenue depends on government projects; policy shifts could impact cash flows.

Why Invest Now?

Despite risks, Kimlun's valuation is compelling. Trading at a P/E of 7.6x (vs. the sector's 12–15x average), it offers upside if earnings growth continues. The dividend reset and strong order books suggest management is prioritizing shareholder returns.

visualKimlun's dividend payout ratio and coverage since 2020**

Conclusion: A Construction Outperformer with Momentum

Kimlun Corporation Berhad is a rare gem in Malaysia's construction sector: it combines a proven turnaround, a fortress-like order book, and a dividend policy that rewards investors. While risks exist, the company's strategic focus on infrastructure and renewables aligns with Malaysia's long-term growth plans. For income-oriented investors, the 1.92% yield and near-term catalysts like the Arden skyscraper project make KIMLUN.KLSE a compelling buy.

Actionable Takeaway:
- Buy Before June 27, 2025: Capture the upcoming dividend (ex-date June 30).
- Monitor Order Book Updates: Track FY2025 contract wins and progress on key projects like the Senai-Desaru Expressway.
- Sector Tailwinds: Malaysia's infrastructure pipeline, including green energy and transport upgrades, will drive sustained demand.

Kimlun's journey from loss to profit is far from over—this is a company poised to capitalize on Malaysia's construction renaissance.

Final Note:
The stock's 103% three-year return is no fluke. With a solid foundation and strategic foresight, Kimlun is building a future as a regional infrastructure leader.

This article is for informational purposes only and not financial advice. Always conduct your own research or consult a professional before making investment decisions.