Posted on 02 Oct 2015
The research arm of MIDF Amanah Investment Bank Bhd (MIDF Research) in a report yesterday said the potential announcement of infrastructure construction projects particularly for water, inter-urban road infrastructure and downstream oil and gas contracts from the upcoming Budget 2016 should augur well for KKB.
KKB has technical capabilities in steel related construction engineering in relation to galvanized piping, fabrication, civil construction, manufacturing of specialised tubular and lined pipes which will be in increasing demand in view of growing infrastructure needs in the state.
MIDF Research said the company’s core competencies in steel fabrication, water piping, hot steel galvanising and gas cylinder manufacturing could enable the company to secure more jobs in the upcoming quarters.
KKB’s fundamental outlook remains attractive and has the ability to procure work with a total order book of RM223.4 million.
Thus, the research firm is optimistic on KKB’s prospects to achieve its order book replenishment assumption of RM210 million and profit before tax (PBT) margin of 19.7 per cent for financial year 2016 (FY16) ending December 31, 2016 MIDF Research noted the company garnered an average PBT margin of approximately 23 per cent during the past five years.
With the potential to secure more jobs in the near future ahead of the impending state election by early next year, MIDF Research is bullish on the outlook of the company.
