We understand from our recent visit to KNM that management has revised downwards both its revenue and earnings guidance for FY11 versus the guidance announced on Bursa Malaysia in March. This is caused by delays in due diligence on its RM2.2bn project in Peterborough, UK. Hence, we are downgrading our FY11-12 earnings by 22%-35%. Although we maintain our Trading Buy call, we are lowering our fair value to RM2.80.
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