Maintain HOLD, TP unchanged at MYR0.88. 1Q12 surprises on the upside and
was operationally positive for the 2nd consecutive quarter but the
results were substantially skewed by several ones-offs and a tax credit.
Overall, we have raised 2012 earnings by 40% to incorporate the tax
credit. While share price has fallen by 28% YTD with the worst seemingly
over for KNM, we remain cautious over its cost management
abilities. KNM, in our view, needs to deliver a consistent set of
quarterly results to warrant further re-rating. Our TP pegs KNM to 8x
2013 EPS.
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Source: Maybank Research - 23 May 2012
I think Ir Lee Swee Eng has to be more communicative. In a nutshell, KNM Group hasnt been very communicative about the direction of the company.
ReplyDeleteA quick look at the website, shows that there hasnt beem any substantial news released by the company since 2009.
The key to managing market expectations is communications. Long term investors are comforted by constant communication from the leader of the company and will continue to hold the shares of a company.
KNM will rebound in 2013 onwards, provided there is no sudden shake up in the global economy... oil demand will continue to improve - visit china and Brazil and india if you ever doubt the expected demand for oil....
KNM is a long term share buy - speculators would not be rewarded for buying KNM shares...