= Top Picks for 2 Momentum Stocks in KLSE =
(i) KGB Warrant /0151 Warrant
that has potential for strong rally
Technical Buy + Trading Buy
1. It will be good to put KGB Warrant inside your favourite watch list for buy orders on the
KGB Warrant as it behaves almost identical pattern as Comfort Warrant WB
Analysis on Comfort Warrant WB
1.1 Comfort Warrant , WB
1.2 From 6 July 2021 (1st day ) to total another 13 trading days -- to 26 July 2021/ RM 0.745
total gain from RM 0.305 to RM 0.745 =RM 0.44 that translates to 145 %
2 / 2nd day 7 / closed RM 0.39
2. Pls note from the technical analysis of KGB Warrant , WB :
Target Price : RM 0.60 to RM 0.745
short term , possibly by 19 Aug 2021 with potential gains from
2.2 2nd / 4 August 2021 / low RM 0.305 / high RM 0.385 / closed RM 0.315
2.3 3rd day / 5 August 2021 / low RM 0.305 / high 0.355 / closed RM 0.35
2.4 4th day / 6 August 2021 / low RM 0.34 / high RM 0.42 / closed RM 0.40
(i) KGB Warrant WB / 0151 WB
Short Term
target price RM 0.60 to RM 0.745
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(ii) KGB /0151
Latest update on the Short Term
Target Price RM 1.50 to RM 1.60
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Kelington records
11-fold hike in 2Q net profit
on greater revenue contribution
KUALA LUMPUR (Aug 24): Kelington Group Bhd
recorded an 11-fold jump in net profit to RM7.35 million in the second quarter
ended June 30, 2021 (2QFY21), from RM623,000 a year earlier,
on greater revenue contributions across its operating markets.
Earnings per share rose to 2.29 sen from 0.2 sen, the engineering solutions provider said in an exchange filing.
Quarterly revenue rose 63.43% to RM126.39 million, from RM77.33 million in 2QFY20, on the back of higher project completion in Malaysia, Singapore and China as well as improved performance from the industrial gases business.
"Revenue from Malaysia doubled to RM37.6 million, representing 30% of total revenue, from RM18.7 million in 2QFY20, driven by higher revenue recognition from process engineering and general contracting projects as well as the project newly awarded in 4QFY20.
"Meanwhile, the Singapore operation recorded a strong rebound with revenue of RM37.8 million as compared to a lacklustre revenue performance of RM21.1 million in 2QFY20. Both operations are recovering from the operation halt in the same period last year," said Kelington.
Revenue from China operations increased 45% to RM46.6 million from RM32.1 million a year ago, mainly due to higher Ultra High Purity (UHP) projects.
Kelington said the industrial gases segment continued an upward performance with higher production output. Revenue grew to RM7.6 million, an increase of 156% from 2QFY20, as demand for liquid carbon dioxide returned amid a resumption of economic activities.
Kelington declared a first interim dividend of 0.5 sen per share, to be paid on Oct 1.
For the first half of FY21, the group's cumulative net profit soared 175.67% to RM13 million, from RM4.68 million in the previous January-June period, while cumulative revenue grew 42.66% to RM231.21 million from RM162.06 million.
Kelington said it remained healthy in a net cash position of RM26.5 million with total gross cash in hand of RM83 million exceeding total debt of RM56.5 million as at June 30.
The group said the decrease in borrowings was mainly due to repayment of invoice financing loans for projects.
Net cash per share stood at eight sen while gearing ratio was at 0.32 times.
Kelington chief executive officer Raymond Gan said the group is targeting to deliver strong growth of earnings in FY21.
"Looking ahead, we remain optimistic on the future outlook as we have our hands full working on a substantial outstanding order book which will contribute meaningfully to the group's financial performance.
"Meanwhile, we continue to receive tender invites across our operating markets, of which majority of these tenders are for projects in the UHP and process engineering segments," he said in a statement.
Shares of Kelington rose 4.1% or five sen to close at RM1.27, giving the group a market capitalisation of RM819.46 million.
Kelington Group - Shining Through the Lockdown |
Source | : | KENANGA | ||||||||
Stock | : | KGB | Price Target | : | 1.50 | | | Price Call | : | BUY | |
Last Price | : | 1.27 | | | Upside/Downside | : | +0.23 (18.11%) | ||||
2QFY21 CNP of RM7.4m (+1,080% YoY; 33% QoQ), brings 6MFY21 CNP to RM12.9m (+176%), came in within expectation, representing 41%/45% of our/street’s estimates. Revenue increased 21% QoQ despite the domestic FMCO as its China operation (+145%) offset the temporary slowdown in Malaysia and Singapore, leading to improved EBIT margin. A stronger 2H is on the cards with the easing of workforce restriction and a slew of UHP jobs in the pipeline. Its order- book stands at RM402m while tender-book has swelled to RM1.5b (+50%), on track to hit another record jobs win. Maintain OUTPERFORM and
Target Price of RM1.50.
Within expectation. Kelington Group Bhd (KGB)’s 2QFY21 CNP of RM7.4m (+1,080% YoY; 33% QoQ) brings 6MFY21 CNP to RM12.9m (+176%), which came in within expectations, representing 41% and 45% of our and consensus full-year estimates, respectively. Having posted QoQ growth despite the FMCO restrictions, this provides early indication of robust orders in the pipeline which could only mean better earnings in the subsequent quarters as restrictions are being lifted.
Results’ highlight. QoQ, despite FMCO restrictions, CNP grew 33% to RM7.4m on a 21% jump in revenue to RM126.4m, thanks to overwhelming UHP jobs in China (+145%) which we believed is attributable to the aggressive wafer fab expansion in the country. This has offset the temporary slowdown in Malaysia (-14%) and Singapore (- 2.5%) operations. YoY, 2QFY21 CNP leaped 1,080% on a 63% increase in revenue as operations in Malaysia doubled while Singapore’s operation grew 79%. Cumulatively, 6MFY21 revenue rose 43% to RM231.2m while CNP more than doubled to RM12.9m as EBIT margin improved 3.3ppt to 7.8%.
Stronger 2H on the cards. With the government easing lockdown restrictions once again, we believe its operations in Malaysia will soon be able to resume back to 100% workforce as the group’s vaccination rate is approaching 90%. Over in Singapore, the group has recently won a UHP job award worth RM45m from GlobalFoundries which we believe is only the start of more to come given that many wafer fabs in Singapore have recently announced expansion plans in which KGB has a strong presence. China operations are also showing no sign of slowing as the country continues to boost the local tech space in order to be self-sufficient.
Tender-book surged 50%. After recognising six months of sales, the group’s outstanding order-book still remains elevated at RM402m, exceeding its FY20 revenue. The management remains very aggressive in acquiring new jobs propelling its tender-book to RM1.5b, a sharp increase of 50% from the RM1b usually reported by them. With this momentum, we believe the group is on track to achieve another record jobs win in FY21.
Maintain FY21E and FY22E earnings of RM31.1m and RM35.6m, representing growth of 78% and 14%, respectively.
Maintain OUTPERFORM and
Target Price of RM1.50
based on FY22E PER of 26x, representing 15% discount to peers’ average.
Risks to our call include: (i) slower revenue recognition due to Covid-19, (ii) downturn in semiconductor sales, and (iii) delay in LCO2 ramp-up.
Source: Kenanga Research - 25 Aug 2021
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Author: kiasutrader | Lat
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Kelington Group - Fab Expansion on the Rise
Author: kiasutrader | Publish date: Thu, 19 Aug 2021, 9:25 AM
KGB has clinched another job win, this time from GlobalFoundries which recently allocated US$4b to expand its wafer fab in Singapore.
The award is worth RM45m for a base build specialty gas delivery system and work will commence immediately as the customer is seeing an urgent need to increase its 12-inch wafer output up to 1.5m per year (+43%) due to swelling chip demand. This brings YTD order wins to RM264m while order-book stands at RM523m. We believe this is the start of more fab expansions to come, indicating a slew of jobs in the pipeline for KGB.
Maintain OUTPERFORM with a
higher Target Price of RM1.50.
Just the start. Kelington Group (KGB) made an announcement yesterday indicating another UHP (ultra-high purity gas delivery system) job win, this time from GlobalFoundries’ wafer fabrication plant in Singapore. This award is worth RM45m for a base build job relating to the specialty gas delivery system and work will commence immediately as the customer is seeing an urgent need to ramp up capacity due to swelling chip demand. We are very positive on this development as it strengthens our belief in KGB’s competency and competitive edge among peers given that the group managed to win this contract in a short span of time, merely one month after GlobalFoundries announced its US$4b capex plan to build a new wafer fab. Including the recent award, KGB has secured RM264m job wins in 2021 while its order-book has ballooned to RM523m.
More to come. We observed that larger wafer fab players such as TSMC and SMIC have started their capex plan early in the year, while medium sized players are only starting to execute their capex plans now and can no longer hold back as the gap between surging demand and available capacity continues to widen. This indicates that we can expect more wafer fab expansion to come and KGB is in a favourable position to benefit from more UHP jobs, in line with management’s goal to achieve another year of record job wins. The group’s tender-book has jumped to RM1.5b, a sharp increase of 50% from the RM1b usually reported by them. This is likely driven by strong demand for semiconductors as our channel check shows that laptop manufacturers are still experiencing chip supply that are 25-30% below demand while automotive semiconductor companies are locking in wafer orders with non-cancellation clauses for up to 24 months.
Braving through the MCO challenges. Despite running at 60% workforce restriction in its Malaysia operation during the MCO 3.0 period, we are hopeful for the 2QFY21 result to remain stable QoQ as UHP jobs in China have been running smoothly and would likely be able to offset the MCO 3.0 impact. Note that China contributes c.48% of the group’s order-book.
Maintain FY21E-22E earnings of RM31.1m and RM35.6m, representing growth of 78% and 14%, respectively.
Maintain OUTPERFORM with a
higher Target Price of RM1.50
(previously RM1.30), based on a rolled forward FY22E PER of 26x, representing 15% discount to peers’ average.
Risks to our call include: (i) slower revenue recognition due to Covid-19, (ii) downturn in semiconductor sales, and (iii) delay in liquid CO2 ramp up.
Source: Kenanga Research - 19 Aug 2021
In the financial , stock market theme in US is the technology sector ,
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