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KOON HOLDINGS LIMITED
INVESTOR PRESENTATION (SEPTEMBER 2011)
Page 2
The information contained in this presentation is strictly confidential. This presentation and the
information contained herein may not be reproduced, disclosed or distributed to any other person. By
viewing and/or reading this presentation, you agree not to reproduce, disclose or distribute, in whole or
in part, the contents of this presentation and agree to be bound by the limitations and restrictions
described herein.
This presentation does not constitute an invitation or an offer to sell, or solicitation of an offer to buy any
securities on in connection with, any contract or commitment whatsoever.
This presentation has been prepared exclusively for the parties presently being invited for the purposes
of discussion. Information contained in this presentation does not constitute a prospectus or offering
circular in whole or in part.
Koon Holdings Limited Disclaimer
Koon Holdings Limited Infrastructure Specialist with a Strategic Focus on Precast & Investments
Key Facts
SGX Stock Code: 5DL
ASX Stock Code: KNH
Bloomberg: KNX SP Equity
Reuters: KNH.AX
Issued and outstanding shares: 164,098,000
Listed on Australia Stock Exchange (ASX) on
11th July 2003
Listed on Singapore Exchange Securities
Trading Limited (SGX) SESDAQ on 21st July
2003 and was upgraded to Main Board on 4th
February 2010
Founded in 1977
One of Singapore’s largest civil engineering,
precast, reclamation and shore protection
specialists
Registered under the A1 category in civil
engineering with the Building and Construction
Authority (“BCA”), ability to bid for civil
engineering projects in Singapore with unlimited
contract value
Owns two out of nine precast companies in
Singapore with the highest BCA license to tender
for precast work with unlimited value
Blue-chip clientele base which includes the
Singapore Government
Key Stock Information
Page 3
Infrastructure
Construction & Civil
Engineering
Plant and Equipment
Rental
Precast Concrete
Works
Investments
Primarily engaged in two main sources of infrastructure activities: reclamation and shore
protection; and civil engineering
Ability to bid for civil engineering projects in Singapore with unlimited contract value
Possesses the relevant safety, quality and environmental certifications - ISO 9001: 2008,
ISO 14001:2004 and OHAS 18001:2007
Operates 3 yards in Singapore and Malaysia (Pontian) with more than 18 production lines,
spanning a total yard area of 116,245 sqm
Approved Precaster for HDB Projects with highest BCA L6 license; ability to bid for precast
concrete works in Singapore with unlimited contract value
Ability to cross-market precast products and offer more integrated product and services.
New business segment is focused on creating synergies and generating reasonable rate of
return and recurring income stream to the Group
Ability to pursue strategic M&A business opportunities with strong financial position
Reduces dependency and reliance on core operating activities
Koon Holdings Limited Synergistic Business Model
Page 4
To centralise its procurement of plant and construction equipment to generate cost
efficiencies
Supports the Group’s internal construction needs as well as tap on the opportunities in the
robust construction market to maximise utilisation rate of its construction equipment.
Koon Holdings Limited Corporate Structure
Page 5
Infrastructure Construction &
Civil Engineering
Plant and Equipment Rental
Precast Concrete Works
Investments
Econ
Contech
Tesla
GPS Alliance
Koon Construction& Transport
Entire Construction
Entire Engineering
INFRASTRUCTURE
CONSTRUCTION &
CIVIL ENGINEERING
Koon Holdings Limited Infrastructure Construction & Civil Engineering - Introduction
Infrastructure
1. Container/Terminal Yard
2. Marine Structure
3. Drainage
4. Road/Highways
Reclamation
1. Shore Protection
2. Dredging
3. Sandfiling
Environmental Engineering
1. Sewage
2. Water/Drains
3. Power
4. Soil Improvement Work
Infrastructure
Construction and
Civil Engineering
BCA A1 Category in Construction-Civil Engineering (eligible to tender for public
projects of unlimited value)
Page 7
Koon Holdings Limited Infrastructure Construction & Civil Engineering - Competitive Strengths
Strategic partnership with international marine
engineering and construction companies such as
Penta-Ocean, Boskalis International, China Harbour
and Hyundai
With over 30 years of experience and accumulated
capabilities, the experienced management team has
successfully completed various large scale private
and public projects
Wide range of products and services increases
efficiency and project management capabilities in
the time-sensitive infrastructure construction
industry with the highest level of BCA certification in
Civil Engineering
Wide Range of Infrastructure Construction
& Civil Engineering Solutions
Experienced Management Team
Strong Industry Recognition
Page 8
Serangoon Reservoir
Koon Holdings Limited Infrastructure Construction & Civil Engineering - Order Book
Public sector tenders for various government agencies such as Housing Development Board,
Public Utilities Board, JTC Corporation, etc.
Contract Period: 2 years
Contract Bid Size: SGD 30 million to SGD 50 million
Targeted Sectors:
1. Infrastructure (MRT and road)
2. Marine engineering works
3. Coastal protection
4. Land reclamation
5. Water and sewage plant
6. Environmental engineering
Order Book of SGD 88.2 million as at 26 August 2011
(excluding the Vietnam Sao Bien port project of
USD 160 million)
General Profile of Koon’s Contracts
Page 9
Koon Holdings Limited Infrastructure Construction & Civil Engineering - Order Book
Current domestic projects (Six largest projects in terms of remaining project value)
Project Total contract value
(SGD million)
Remaining contract value
(SGD million)
Seletar Link and widening of TPE 37.9 37.9
Infrastructure works at Changi East 15.74 11.03
Tampines Logistics Park infrastructure
works
15.25 15.25
Zhenhua Mega Yard – Phase 2 12.93 2.97
Access road to Changi North Industrial Park 9.67 6.82
Term contract for maintenance of foreshore
structures and physical barriers
8.36 8.36
Project Total contract value
(USD million)
Remaining contract value
(USD million)
Sao Bien Port, Vietnam 160 160
Current overseas project
Page 10
Koon Holdings Limited Infrastructure Construction & Civil Engineering - Track Record
Wetland at Lorong Halus Sentosa Cove Pang Sua Canal
Page 11
Koon Holdings Limited Infrastructure Construction & Civil Engineering - Industry Outlook
(S$ billion) 2009 2010 2011 (forecast)
Public sector 13.9 8.3 12.0 -15.0
Private sector 8.6 17.4 10.0 -13.0
Total value 22.5 25.7 22.0 -28.0
0
5
10
15
20
25
30
2009 2010 2011 (forecast)
Public sector Private sector Total value
SG
D b
illio
n
Source: BCA (Straits Times – 13 Jan 2011)
Page 12
Koon Holdings Limited Infrastructure Construction & Civil Engineering - Industry Outlook
Page 13
PLANT AND
EQUIPMENT RENTAL
Koon Holdings Limited Plant & Equipment Rental
This division, which owns and manages the Group’s plant and equipment focuses on the rental of
these plant and equipment to external clients as well as the deployment for internal usage.
It allows the Group to centralise its procurement of plant and construction equipment to generate
cost efficiencies, while adequately supporting the Group’s construction requirements as well as tap
on the opportunities in the robust construction market to maximise utilisation rate of its construction
equipment.
Centralised Procurement
Internal Usage
Rental
Cost Savings and
Maximise Utilisation Rate
Page 15
Koon Holdings Limited Plant & Equipment Rental
Construction Machinery:
Crawler Cranes
Excavators
Lorry Cranes
Tipper Trucks
Vibratory Soil Compactors
Wheel Loaders
Others
Construction Equipment:
Pabool Pump
Electrical Submersible Pump
Diesel Water Pump
Chemical Treatment Plant
Others
Hydraulic Crawler Crane Hydraulic Excavator Grab Dredger
Marine Construction Vessels(1):
Dredgers
Barges
Page 16
(1) The specialised vessels are
strategically retained within the Group
to target the robust opportunities in
the niche marine construction
activities.
PRECASTS
CONCRETE WORKS
Increased
Productivity
Time and Cost
Savings for
Developers
Quality
Control
Koon Holdings Limited Precast Concrete Works – Benefits of Precast Products
While having minimal cost differences with conventional cast in-situ products, precast products
also offer the following advantages:
Simplify on-site construction process and reduce wastages; hence generating time and cost savings
for developers
Increase productivity; hence reducing the number of foreign workers and thus translating into cost
efficiencies for developers
Better quality control as precast works undergo internal and external quality testing
Page 18
Koon Holdings Limited Precast Concrete Works - Introduction
Key Facts
Acquired 100% of Contech Precast Pte Ltd
for SGD 1.78 million in 27 August 2010
Acquired 75% stake in Econ Precast Pte
Ltd for SGD 3.75 million on 25 March 2010
Page 19
A total of nine companies in Singapore have the highest license (L6) from Building and
Construction Authority of Singapore (“BCA”) for precast concrete works, of which two of these
companies are owned by the Group. Ability to bid for precast concrete works in Singapore with
unlimited contract value
Contech Precast is the only qualified manufacturer for precast tunnels used in MRT projects
Operates two yards in Singapore and one in Malaysia (Pontian) with more than 18 production
lines, spanning a total yard area of 116,245 sqm
Order Book Total contract value
(SGD million)
Precast Concrete Works ± 68.8
(as at 26 August 2011)
Koon Holdings Limited Precast Concrete Works –Competitive Strengths
Page 20
Comprehensive Range of Precast Products
- With the acquisitions of Econ and Contech, the Group is able to manufacture a portfolio of
complementary precast products
- Significant increase in the range of products offered by the precast division
Quality Assurance
- Testament to our commitment to delivering quality products, our precast division is awarded with
ISO 9001:2008
- In addition, we have received SS EN 206-1:2009; SS544: Part 1 & 2:2009; SAC CT 06:2010 for
the product certification of Ready-Mixed Concrete in July 2010
Trademark and License
- Capability to design and manufacture various types of precast components
- Equipped with highest BCA L6 licenses, we are one of the few precasters in Singapore with the
ability to bid for contracts of unlimited value
Koon Holdings Limited Precast Concrete Works –Competitive Strengths
Page 21
Strong Collective Efforts
- Increased capability and capacity to bid and undertake larger projects by ourselves
- A key factor as we tripled the size of our precast order book since August 2010
Track Record
- The combined track record of both companies extends to more than 30 years
- Involvement with projects for several local and overseas developer, contractors and
government bodies (such as HDB and LTA)
Partnership and Support from Koon
- Ability to cross-share and implement relevant processes to improve operational efficiency
- Financial support from parent company to obtain better financing terms
Koon Holdings Limited Precast Concrete Works – Product Range
Prestressed Beams
RC Piles
Ring Segment Water Tank
Insert Pictures Reinforced Concrete Pipes Space Adding Item
Page 22
Koon Holdings Limited Precast Concrete Works - Yards
Page 23
Singapore (Kranji Yard) Malaysia Yard (Pontian)
Koon Holdings Limited Precast Concrete Works - Track Record
Page 24
HDB Tunnel Segment (MRT, DTSS) LRT
Koon Holdings Limited Precast Concrete Works - Track Record
Page 25
Tunnel High Beam for Flyover Lift Shaft
17,700
25,000 25,000
-
5,000
10,000
15,000
20,000
25,000
30,000
2010 2011
(forecast)
2012
(forecast)
Koon Holdings Limited Precast Concrete Works - Industry Outlook
New flats under BTO
Source: HDB
Un
its
Page 26
17111
8430 8116
0
2000
4000
6000
8000
10000
12000
14000
16000
18000
2011 (forecast) 2012 (forecast) 2013 (forecast)
City centre City fringe Suburban Total
Koon Holdings Limited Precast Concrete Works - Industry Outlook
Un
its
Pipeline of new private homes
Source: URA (Straits Times - March 2011)
Page 27
Koon Holdings Limited Precast Concrete Works - Industry Outlook
Page 28
INVESTMENTS
Koon Holdings Limited Investments - Tesla
Key Facts
Owns 48.9% ordinary shares and 18.9% preference shares in Tesla, for AUD 6.6 million. Tesla
has been allotted capacity credits to generate power by Western Australian Independent
Market Operator (“IMO”), allowing it to access and supply electricity to the state grid system
Capacity credits provide an incentive for the initial capital investment by granting power
generators a recurring source of income
Commence operation of its first 9.9MW diesel power plant in Western Australia (AUD 7.0-8.0
million or SGD 9.3-10.6 million). It has also secured sites for the construction of three additional
9.9MW power plants which will be completed in the next 12 months
Opportunity to leverage on Tesla’s network to tap into the infrastructure industry in Australia
Two-Tier Revenue Structure upon
Operational of the Power Plants
Page 30
Koon Holdings Limited Investments - Tesla
Industry Outlook
The Western Australia market has seen record breaking power consumption levels over the
recent years, as the state experienced varying weather conditions and growth in mining
activities.
Power consumption hit a high of 3,790MW during the summer, resulting in more than 1,000
households without power
In Australia, when there is insufficient capacity to meet the electricity demand, the government
will hold an auction to solicit bids for supply of electricity to the government. Maximum
Reserve Capacity Price is the highest price government is willing to pay for any
additional electricity supplied per MW annually (see chart on next slide)
Page 31
Tesla’s power plants are tailored towards meeting peak
demand needs; there will be further opportunity for
increased revenues from electricity generation in the future
Koon Holdings Limited Investments - Tesla
100,000
120,000
140,000
160,000
180,000
200,000
220,000
240,000
2007/2008 2008/2009 2009/2010 2010/2011 2011/2012 2012/2013
AU
D p
er
MW
pe
r a
nn
um
Source: Independent Market Operator of Western Australia
Maximum Reserve Capacity Price
Page 32
Koon Holdings Limited Investments - GPS Alliance Holdings
Key Facts
Acquires 51% of the issued capital in GPS Alliance Holdings Pte. Ltd. (“GPS Alliance”), for
SGD 3 million.
Based in Singapore, GPS Alliance is an investment holding company that owns premier real
estate agency, Global Property Strategic Alliance Pte. Ltd. (“GPS”), which is involved in a wide
spectrum of real estate services
Newly-incorporated GPS Alliance Appraisals Pte. Ltd. (“GPS Alliance Appraisals”) to provide
property valuation and advisory services
Synergistic addition to the Group’s business model; leverage on network of GPS Alliance in the
real estate market to explore property development opportunities
Page 33
Provide integrated one-stop services from construction,
marketing and property management solutions to
developers as a one-stop vendor
1H2011
FINANCIAL HIGHLIGHTS
Koon Holdings Limited Income Statement
SGD Million 1H2011 1H2010 Change Comments
Revenue 35.7 37.0 (3.7%) Project Completion Timeline: Substantial completion of major projects such as Punggol-Serangoon
Reservoir, Gardens by the Bay at Marina South, Jurong Island projects, PUB Wetland contributed significantly to revenue in 1H2010 as compared to 1H2011
The decline in revenue was partially offset by new projects such as
infrastructure works at Changi East, coastal protection work at Pulau Tekong and a private civil engineering project at Tuas
Revenue Recognition: Revenue is recognised after a project is 20% or more complete
Gross Profit 3.0 7.9 (61.8%) Write back of provision for anticipated losses and liquidated damages for certain projects in 1H2010
Projects with better margin such as Gardens by the Bay at Marina South
and Jurong Island projects contributed to the gross profit in 1H2010 as compared with 1H2011
Precast Division: Preliminary set up, technical design and production
related costs incurred for new contracts awarded
Other Income 9.6 0.8 +1,146.4% Gain on disposal of leasehold property of SGD 5.6 million Dividend income from Koon Zinkcon of SGD 3.0 million
Profit Attributable to Shareholders
6.3 6.0 +4.8% Non-operating income buffered the decrease in profit from the Construction and Precast divisions
Page 35
Koon Holdings Limited Income Statement – Revenue Breakdown
Division SGD million Notes
Infrastructure Construction & Civil
Engineering
28.5 Declined by approximately SGD 4.5 million as compared to
1H2010 mainly due to project completion and project
timing
Precast
6.3 Grew 71% from SGD 3.7 million in 1H2010. Increased
contribution because of 6 months cumulative revenue for
1H2011 as the acquisition of the Precast division was
completed in late Mar 2010
Plant and Equipment Rental
0.9 Increased by SGD 0.5 million as compared to 1H2010
Page 36
0.8 0.8
0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.9
HY2011 HY2010
Koon Holdings Limited Dividend
0.5
1
0
0.2
0.4
0.6
0.8
1
1.2
HY2011 HY2010
Sin
gap
ore
cen
t
Dividend Per Share (Interim)
Page 37
Total Dividend Payout(i) (Interim)
SG
D M
illi
on
Note:
(i) Total Dividend Payout is the sum of dividend per share proposed multiplied by the number of issued share outstanding at each
respective period
(ii) During FY2010, the Group issued 81,994,000 bonus shares on the basis of one bonus share for every one ordinary share in the
capital of the company held by shareholders.
Koon Holdings Limited Balance Sheet
As at
30 June 2011
As at
31 December 2010
% Change
Current Asset 73,005 72,771 +0.3
Non-current assets 32,653 25,928 +25.9
Total assets 105,658 98,699 +7.1
Current liabilities 48,552 45,574 +6.5
Non-current liabilities 4,074 3,346 +21.8
Total liabilities 52,626 48,920 +7.6
Total equity 53,032 49,779 +6.5
Healthy balance sheet with net cash position
Cash and cash equivalents of S$23.0 million
as at 30 June 2011
Page 38
Koon Holdings Limited Key Financial Ratios
1H2011 1H2010
Gearing Net cash position Net cash position
Debt To Equity Ratio(i)
0.6
0.4
Return On Equity (ROE)
12.1%
14.5%
Earnings Per Share (Singapore cents)(ii) 3.85 3.68
Net Tangible Value Per Ordinary Share (Singapore
cents)
31.77 25.31
Note:
(i) Debt To Equity Ratio = ((Total Liabilities - Cash And Cash Equivalents)/Equity attributable to owners of the
Company)
(ii) Earnings Per Share is derived from from earnings from continuing and discontinued operations divided by the
weighted average number of ordinary shares on issue
Page 39
GOING FORWARD
Leverage on our proven track record and capabilities to tap domestic demand for niche construction, marine and civil engineering projects
Ride on the steady demand for infrastructure and civil engineering projects in countries around the region
Continue to undertake projects with a margin-centric business approach
Moving up the value-chain
Infrastructure Construction
& Civil Engineering
Platform for Business Diversity and Growth
Precast Concrete Works Investments
Improve sales and distribution channel and expand product range of precast division
Cross-market precast products to customers of infrastructure construction and civil engineering business units
Expansion into regional markets
Koon Holdings Limited Three Pillars of Growth
Net cash position of SGD 23.0 million to fund strategic M&A business opportunities
Continue to explore investment opportunities that create synergies with the Group’s operating businesses
Investments to generate diversified streams of recurring revenue, profit and cash flow back to the Group
Page 41
END OF PRESENTATION
