Nothing ruins a Friday like realizing it’s Thursday.
RESULTS NOTE
KOSSAN (UP↔; TP: RM0.85↔). Still Not Out of The Doldrums. 9MFY22 PATAMI of RM159m (-94%YoY) came in at 98%/78% of our/consensus full-year forecast. We consider the results as within our expectation as its prospects will remain weak with ASP having yet to bottom out. We believe the oversupply situation in the industry will persist at least over the next 2-3 years. We maintain our FY22F/FY23F numbers. Our TP is RM0.85 based on 14x FY23F EPS, at a 35% discount to peers’ average to reflect its smaller market capitalization after imputing a 5% discount for a 2-star ESG rating as appraised by us. Reiterate UNDERPERFORM.
COMPANY UPDATE
KGB (OP↔; TP: RM1.75↑). Firing On All Cylinders. We were positively surprised by KGB’s announcement of two contract wins; (i) RM170m turnkey job for a bulk liquid terminal in Port Klang, and (ii) RM90m contract for the supply of ultra-high purity (UHP) gas delivery systems for a semiconductor plant in Beijing which is involved in the design and manufacturing of dynamic random access memory (DRAM). Both jobs totalled to RM262m, bringing its YTD job wins to RM1.62b which surpassed our expectation, while orderbook stands at RM2.22b. We raise FY23F CNP by 8%, leading to a higher TP of RM1.75 (from RM1.70). Maintain OUTPERFORM.
KENANGA
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