Saturday, September 7, 2013

KNM Group : Disappointment Continues (RHB)

KNM Group
Target Price: MYR0.40
Price: MYR0.40
Disappointment Continues

KNMG’s 1H13 net profit of MYR13.6m was below our but in line with consensus forecasts, at merely 25.7% of our and 48.1% of consensus full-year estimates. Correspondingly, we lower our earnings forecasts by 22.6% for FY13 and 20.7% for FY14. Given that the stock has dipped by some 24.5% since our downgrade to Sell in June, we upgrade the stock to NEUTRAL, with a revised FV of MYR0.40 (from MYR0.42).


• Better q-o-q but still weak overall. KNMG’s 1H13 net profit of MYR13.6m (+413.4% q-o-q, -80.2% y-o-y) was below our but in line with consensus forecasts, accounting for merely 25.7% of our and 48.1% of consensus full-year estimates. The weak profit was largely attributed to weaker revenue (-12.3% q-o-q, -21.6% y-o-y). During the quarter, the company had recognized some MYR7.4m in reversal of tax provision at its foreign subsidiary and some MYR3.4m in deferred taxes. Stripping out both items, KNMG’s net profit would have been much lower q-o-q and y-o-y.

• Lowering our estimates. Given the uncertainties facing the company, including: i) the continuity of the Peterborough project, ii) weak prospects for its orderbook replenishment, and iii) weak operational capability to execute its projects, we lower our FY13 and FY14 revenue forecasts by 12.9% and 14.5% respectively. Consequently, we reduce our earnings forecasts by 22.6% for FY13 and 20.7% for FY14.

• Upgrade to NEUTRAL. Given that the stock has dipped by some 24.5% following our downgrade to Sell in June, we upgrade the stock to NEUTRAL. Our new MYR0.40 FV (from MYR0.42) is pegged to 9x FY14 EPS (previously 9x of 12-month forward earnings).




Source/Extract/Excerpts/来源/转贴/摘录: RHB-Research,
Publish date: 30/08/13

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高估期间, 卖对, 不卖也对, 买是错的。
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合股做生意,则公司股份的业绩高于一切,而股票的价值决定于盈利。
价值是本,价格是末,故公司比股市重要百倍。
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