RHB Research maintains Market Perform on KNM (7164)

KUALA LUMPUR: RHB Research Institute is maintaining its Market Perform call on KNM Group as it believes the market shares its cautious sentiment on the company's earnings.
It said on Friday that its fair value for KNM was 74 sen based on 0.4 times FY13 price-to-book value.
On Thursday, KNM announced it appointed UOB Bank
as the manager, underwriter and placement agent for the proposed
listing of its unit Borsig, on the Main Board of the Singapore Exchange
(SGX-ST). “We understand that management is looking to list Borsig to
raise capital to further expand Borsig's operations, i.e. new shares.
On top of the new shares, we expect KNM to sell some of its shares in
Borsig to raise capital for itself, given its large debt of RM1.14bil
currently,” it said.
RHB Research expected the shares to have some short-term upside as the market reacts to this latest development.