KKB Engr rises on RM28m job (9466)

The RM28 million new contract won by KKB Engineering Bhd has stimulated new interest in the counter after the absence of
of new contracts since it secured the last two in 2011.

Its share price rose two sen or 1.307 per cent to RM1.55, with 141,600 units traded.

The
new contract awarded by KACC-JAKS JV was for supplying 1500mm O.D steel
pipe piles and is scheduled to commence in the third quarter this year
while supply will be completed within the first quarter next year.

OSK
Research in a note today said although it was delighted to see new
contract that will beef up KKB's orderbook, the amount is rather
insignificant.

"We understand that the profit margin for
steel pipe manufacturing is thinner than that of steel fabrication
works, and as such this contract may only serve to boost KKB's revenue
but would be less significant in its bottom-line contribution.

"Hence,
we prefer not to adjust our earnings estimate for the company at this
time as this was part of our earlier forecast," it added.

OSK has upgraded KKB to 'neutral' call with its fair value rising from RM1.34 to RM1.50. -- Bernama