Wednesday, December 15, 2010

KNM jumps to highest since April on target price upgrades

KUALA LUMPUR: KNM GROUP BHD []' shares and warrants advanced in active trade on Wednesday, Dec 15 after Maybank Investment Bank Bhd Research and OSK Investment Research upgraded their respective target prices for the stock.

At 11.01am, KNM was up 18 sen to RM2.51, the highest since April 20 this year, with 22.5 million shares done.

Its warrants added 1.5 sen to 16 sen with 28.15 million units done.

Maybank IB maintained its buy call on KNM and raised its target price to RM3.10 from RM2.20, while OSK Research said it was raising its target price to RM2.96 from RM2.22.

Maybank IB said it was positive over KNM's JV with Petrosab as East Malaysia fabrication opportunities are huge, riding on PETRONAS' rising domestic capex spend.

The Sabah Oil and Gas Terminal'' and Sipitang CTF projects are some of the JV's targeted projects, it said.

'KNM remains a Buy with a raised 12-month target price of RM3.10 (+41%) as we foresee a sustained recovery outlook, locally and globally.

'Our new target PER is 10 times (previously 9 times) and we roll-over valuations to 2012 earnings,' it said.

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