KNM’s 9MFY09 results were below expectations due to the delay in new contract awards, which limited its orderbook replenishment, margin compression - especially for its low to mid end products - and higher operating costs. Going into 4QFY09, KNM’s performance will continue to be sluggish, unless it secures some of the contracts pending award by its customers. These are contracts for the JV Verwater project, Jubail refinery and Gorgon LNG process equipment awards. Thus we are downgrading our FY09-10 earnings forecast by 23%-32%. However, we maintain a Buy on KNM, but with a lower target price of RM0.93 (previously RM1.27).
Subscribe to:
Post Comments (Atom)