KNM - Winning Streak! Author: kltrader | Publish date: Thu, 8 Oct 2015, 10:02 AM
News KNM received a letter of award (LOA) of EPCC contracts for waste-to-energy facility at Beddington Lane, Croydon, UK. The cont ract amount is 88m pounds or approximately RM581m with contract duration of 27 months. Financial Impact This is the third contract announcement in 6 months, bringing year to date win to circa RM1bn. With estimated gross margin of 20%, we expect the contract to contribute 15m or 16% to the bottom-line. Together with this contract win, KNM has secured about RM2bn worth of EPCC contract locally since 2H14. We have factored in RM2.2bn cont ract win for RAPID related job over 4 years or RM540m per annum. With this contract win, our orderbook replenishment assumption target already met, any contract win from RAPID going forward will raise our earnings forecast. Pros/Cons We were surprised by the cont ract wins given that this is an EPCC contract win outside of RAPID. We remain positive on its fundamental given ability to replenish its orderbook amidst low oil price environment with the support of contract flows from RAPID. In addition, KNM was also awarded the O&M contract for waste-to-energy facility above but value is not disclosed. Together with UK Peterborough, we will see the company transform from project based earnings to more recurring income, which will be another re-rating catalyst. We understand that 2HFY15 earnings might not be exciting mainly due to timing of commencement of EPCC contract. We expect to see significant earnings contribution in FY16 and FY17 from RAPID and potential upside risk to our forecast. Catalysts i) Announcement of more RAPID cont ract win(s); ii) Financial closing of EnergyPark Peterborough; iii) Additional contribution from Renewable Energy business in Thailand and/or from JV with Hansol. Risks Fluctuation in oil price; Project execution ability; Delay in contracts award. Valuation We maintained our BUY call with unchanged target price of RM0.67 based on unchanged 11x P/E. Our TP have not yet factored in value from EnergyPark Peterborough and Thailand’s renewable energy business. Source: Hong Leong Investment Bank Research - 8 Oct 2015
@Bilis, just did a test data based on today event, technical analysis(75%yesterday volume, close low and close at open), still maintain as buy. Morning session, more on profit taking and some nervous sellers.
This is just my idiotic brain working overtime to decide to take profit or hold. ;)
As of 11:11am Buyer Vol=524,783 Seller Vol=458,141 Buyer buy from seller Seller sell to buyer Buy 53% 1mil exchanged and still maintaining at 0.555 Not bad.
This book is the result of the author's many years of experience and observation throughout his 26 years in the stockbroking industry. It was written for general public to learn to invest based on facts and not on fantasies or hearsay....
skylifttoptoptop
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Posted by skylifttoptoptop > 2015-10-08 09:29 | Report Abuse
looks very good.. buy !