Stock Name: KKB
Company Name: KKB ENGINEERING BHD
Research House: OSK

KUALA LUMPUR: Shares of KKB ENGINEERING BHD [] climbed in early trade on Friday, Nov 12 after it registered a strong set of earnings in the third quarter.

At 9.28am, it was up 14 sen to RM2.05 with 2.21 million shares done.

The FBM KLCI shed 3.32 points to 1,510.38. Turnover was 168.35 million shares valued at RM143.45 million. There were 140 gainers, 204 losers and 177 stocks unchanged.

OSK Research had a fair value of RM2.76, derived from 10 times FY11 EPS.

'We are amazed with KKB Engineering (KKB) striking a 3Q net profit of RM23.3 million that was more than double that in 3QFY09 and 73.4% higher q-o-q,' it said.

The research house said the astounding quarter, during which its nine-months bottomline marginally surpassed its full-year estimate, was mainly attributed to the 16% revenue increase in the engineering and CONSTRUCTION [] division, which also recorded an exceptionally strong EBIT margin of 49.1%.

'We understand that the company secured a fast track construction job that offered an attractive margin in 3Q. Apart from that, the manufacturing division's EBIT margin of 44.6% was extraordinary although sales dropped q-o-q,' it said.