Captain K H Chia, who took over as CEO of Kurnia Asia in July 2008, recently resigned to pursue his passion in life insurance, in which he was actively involved for more than 30 years. There is no doubt that Captain Chia was instrumental in implementing the company’s Transformation of Operation and Performance (TOP) exercise. However, we believe his resignation would not jeopardize the success of TOP, which was implemented a year before he came on board. Meanwhile, Kurnia has discontinued its proposed JV with its Cambodian counterpart to focus on its existing business. Since there is no change in the company’s direction and the TOP scheme is on-going, we are maintaining our BUY recommendation with a target price of RM1.01.

TOP exercise launched before Captain Chia joined. There is no doubt that Cpt Chia was instrumental in implementing the Transformation of Operation and Performance (TOP) scheme, which helped Kurnia turn around with a net profit of RM57.1m from a net loss of RM301.8m in FY08. However, TOP had been in place since July 2007, which was a year before the entry of Cpt Chia. However, the success of TOP, which involved: