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