We gathered that there is no significant improvement in the business environment of KNM to-date compared to 6 months ago in terms of new contract awards in the O&G process equipment segment as well as new job wins for the company. However, there is possibility of a better 3QFY10 results coming from the recognition of some of the jobs it secured in 2H09. Having said that, we believe the outlook for the company is Neutral in the ST but getting positive in the LT. Maintain Neutral.
Maintain Neutral. Our target price for KNM remains unchanged at RM0.56 based on a PER of 9x FY11 EPS. To-date, its orderbook still stands at about RM2.0bn while its tenderbook had increased to RM16.0bn (from RM10.0bn) since the beginning of the year, coming from some O&G and power project tenders in the South East Asia.
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