KUALA LUMPUR (Feb 10): RHB Research Institute is maintaining its underperform call on KNM GROUP BHD [] at lower fair value of 68 sen a share based on unchanged 0.4 times price-to-book value.
It said on Friday the rerating catalysts will be when it starts to show sustainable earnings and operational improvement.
“We came away from our visit remaining quite cautious on the company’s outlook. Management guided that 2012 will be a year of cost, operation and plant rationalisation.
“Besides that we are concerned that a couple of its’ large contracts will continue to be deferred despite management’s best efforts. The company is tentatively looking to release its 4QFY11 results on Feb 28, but we are not too optimistic on it reporting better numbers,” said RHB Research.
It said on Friday the rerating catalysts will be when it starts to show sustainable earnings and operational improvement.
“We came away from our visit remaining quite cautious on the company’s outlook. Management guided that 2012 will be a year of cost, operation and plant rationalisation.
“Besides that we are concerned that a couple of its’ large contracts will continue to be deferred despite management’s best efforts. The company is tentatively looking to release its 4QFY11 results on Feb 28, but we are not too optimistic on it reporting better numbers,” said RHB Research.
