Thursday, November 25, 2010

OSK Research maintains KNM target price at 56 sen

KUALA LUMPUR: OSK Research said KNM Bhd's 9MFY10 results were above consensus but within its expectations, making up 83% and 78% of the FY10 forecasts respectively.

It said on Thursday, Nov 25 the improvement in the 3QFY10 numbers showed that PBT soared 393% to RM41.0m q-o-q, mainly contributed by higher utilization of its plants as well as a better product mix.

However, on a YTD comparison, the 9MFY10 PBT was still lower by 77.4% due to lower selling prices and higher cost of operation.

The ex-date for the company's share consolidation of every four shares into one share has been set for Dec 2.

'Our target price for KNM remains unchanged at 56 sen, based on a PER of 9x FY11 EPS. In the immediate term, we believe there may be some upside to its share price once the shares are consolidated as worries over its liquidity would be successfully addressed by then.

'Going forward, we expect KNM's outlook to gradually improve in line with the recovery of the global O&G industry,' said OSK Research.

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