Stock Name: KNM
Company Name: KNM GROUP BHD
Research House: OSK
KNM Group Bhd
(May 3, 53 sen)
Upgrade to neutral at 53.5 sen, target price maintained at 59 sen: Last Friday, KNM announced that there was a positive deviation between its unaudited financial statements for FY09 announced in February 2010 and the audited financial statements released last Friday.
The FY09 net profit of RM260.6 million (previously RM170.8 million) is now higher by RM89.8 million, or 52.6%, after taking into account recognition of the tax incentives granted for Borsig's acquisition.
The company announced in early April that it had received a tax incentive of RM1.4 billion from the finance ministry in respect of acquisition cost and other approved incidental costs incurred by KNM Process Systems Sdn Bhd (KNMPS) for the Borsig acquisition. This incentive will be applied over four years with effect from year of assessment 2009 onwards. Hence, the auditors have started to recognise this incentive beginning from its FY09 accounts.
Earlier, we had downgraded KNM to a sell after BlueFire Capital Group Ltd decided to allow its offer price of 90 sen per share to lapse. The share price has come down to a low of about 50.5 sen recently. Hence, we are now upgrading our call to neutral but advise investors to avoid this stock until further positive developments are seen. - OSK Research, May 3
This article appeared in The Edge Financial Daily, May 4, 2010.
Company Name: KNM GROUP BHD
Research House: OSK
KNM Group Bhd
(May 3, 53 sen)
Upgrade to neutral at 53.5 sen, target price maintained at 59 sen: Last Friday, KNM announced that there was a positive deviation between its unaudited financial statements for FY09 announced in February 2010 and the audited financial statements released last Friday.
The FY09 net profit of RM260.6 million (previously RM170.8 million) is now higher by RM89.8 million, or 52.6%, after taking into account recognition of the tax incentives granted for Borsig's acquisition.
The company announced in early April that it had received a tax incentive of RM1.4 billion from the finance ministry in respect of acquisition cost and other approved incidental costs incurred by KNM Process Systems Sdn Bhd (KNMPS) for the Borsig acquisition. This incentive will be applied over four years with effect from year of assessment 2009 onwards. Hence, the auditors have started to recognise this incentive beginning from its FY09 accounts.
Earlier, we had downgraded KNM to a sell after BlueFire Capital Group Ltd decided to allow its offer price of 90 sen per share to lapse. The share price has come down to a low of about 50.5 sen recently. Hence, we are now upgrading our call to neutral but advise investors to avoid this stock until further positive developments are seen. - OSK Research, May 3
This article appeared in The Edge Financial Daily, May 4, 2010.
No comments:
Post a Comment