Thursday, 10 May 2012

OSK Research downgrades KKB To Sell, cuts fair value to RM1.34

KUALA LUMPUR (May 10): OSK Investment Research has downgraded KKB ENGINEERING BHD [] to a Sell and cut its fair value to RM1.34 from RM2 previously and said the company's 1QFY12 net profit of RM7.7 million (-60.8% y-o-y, +15.1% q-o-q) was 49.5% below its expectations.

The lacklustre performance was primarily due to weaker revenue from the engineering division which saw slower contract replenishment and heightened raw material costs, it said in a note Thursday.

"We think 2012 would be a challenging year in view of global economic and local political uncertainties and hence, we are tweaking down our earnings forecast and FV to RM1.34. We downgrade KKB to Sell," it said.

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