KUALA LUMPUR: AmInvestment Research is maintaining its Buy call on KKB Engineering Bhd
as it expects the group to secure a package under the Pan Borneo Highway, via its joint venture with WCT Bhd.
The research house said on Thursday that it does not expect slowdown seen in the steel fabrication and engineering firm’s 1QFY16 results to last for long.
The group had reported a core net loss of RM2.0mil due to the lack of conventional activities and new jobs five months into the year.
“For now, we maintain our annual new order assumption at RM200mil for FY16F through FY18F.
“We do not expect the slowdown to last for long, and continue to expect KKB to secure a package under the Pan Borneo Highway, via its JV with WCT
“We also expect KKB to benefit from the ancillary jobs stemming from the construction of the highway in the form of replacement and supply electricity poles, water pipes, and installation of guardrails,” it said in a note.
Apart from O&G jobs and the Pan Borneo Highway, KKB can also rely on the state’s focus on rural development, on the back of the state’s budget of about RM6bil for development,” it added.
The research house said the risks for the group include delays in the securing of conventional jobs, as well as oil and gas fabrication works.
Limited time offer:
Just RM5 per month.
