We are projecting KNM to make net profit of RM219.8m or EPS of 22.27sen. Based on a target PER of 15x, the fair value is RM3.37. The 15x PER target is in view of the growing prospects in the O&G sector and the energy field, KNM moving up the value chain where there is lesser competition, and lastly KNM’s global presence where any slowdown in any geographical location can be compensated in other regions.
With potential upside of 20.4%, we recommend a BUY. With the macro factors turning favourable, the risk to our forecast and fair value would be the contract execution risk - timely completion of contracts and within the required specifications – and geopolitical risk.
With potential upside of 20.4%, we recommend a BUY. With the macro factors turning favourable, the risk to our forecast and fair value would be the contract execution risk - timely completion of contracts and within the required specifications – and geopolitical risk.
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