KKB Engineering Bhd (+ve)
KKB (Fundamental: 2.5/3, Valuation: 1.4/3) is mainly involved in the manufacturing of liquefied petroleum gas cylinders, steel pipes, civil engineering works, steel fabrication and hot dip galvanizing.
Revenue dropped in 2011-2012, recovered in 2013 but fell anew in 2014, to RM202 million. Net profit fell from a peak of RM76.9 million in 2010 to RM20.9 million last year.
The company’s shares jumped 7.3% yesterday, closing at RM1.76 per share, despite weak market conditions. This was likely due to favourable 1QFY2015 results announced on Monday.
For 1QFY2015, KKB posted a net profit of RM26.7 million, exceeding its 2014 full-year earnings by 27.2%. This was driven by higher revenue from the manufacturing division, which increased by more than three-fold y-y to RM62.3 million bolstered by demand for polyurethane lined mild steel pipes, amongst others.
The company has net cash of 42.2 sen per share as end-March 2015, equivalent to 24% its prevailing price.
This article first appeared in The Edge Financial Daily, on April 29, 2015.