09 December 2010

KNM – Good & Bad

Recently, KNM is coming back to the limelight in Bursa Malaysia. After the 4 to 1 share consolidation exercise, KNM is inching up since securing a contract worth RM680 million in Uzbekistan. Then, KNM held a briefing with research outfits indicating that the company was on the road to recovery after a hiatus one-and-a half year.

Good facts:
  • Order book had grown to RM2.4 billion
  • Tender book grown to RM16 billion
  • Better capacity utilization
  • Re-surging of crude oil price which touches USD90 per barrel now
  • Malaysia government's intention to spur oil & gas sector
  • Listing of Petronas' subsidiaries enhancing the viability of local listed companies
  • Impending projects roll-out by Petronas soon
  • Planning to tap into nuclear industry in Africa
IR. LEE SWEE ENG
Executive Chairman / Chief Executive Officer
Bad facts:
  • Foreseeable losses in its operations in Brazil, Canada and Indonesia
  • High debt levels with RM1 billion borrowings, against net cash balance of RM300 million
  • Future cash flows constraint would jeopardize the company credit rating
Would BUY Calls from ECM, OSK, HwangDBS, and RHB gave you some confidence?

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