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?