KKB (9466) - KKB - Fast and Furious

KKB (9466) - KKB - Fast and Furious

KKB had a humble history back then at 1962 as a small engineering firm that is founded by Dato Kho Kak Beng. Back then, KKB is providing steel fabrication works for factory buildings and products. The company continue to grow and started to diversify into other related work within the sector. Today, KKB is offering is expertise in Steel Fabrication, Civil Construction, Hot-Dip Galvanizing, and is also one of the core manufacturer for LP Gas Cylinder, Mild Steel Cement Lined (MSCL) Pipes as well as Steel Pipes Tubular Piles.

KKB had now provided it's services in the public and private sector across Sabah and Sarawak. KKB saw it's peak moment on the booming economic transformation in Sarawak, which is largely contributed by the Samalaju Industrial Park.

However, with the completion of Phase 1 of the Samalaju Industrial Park, where will KKB be heading in the coming days?

KKB had saw it's share price sliding 50% off from a peak of RM 2.80 to the current RM 1.40 range. However, at the current range of RM 1.40, KKB had seen a good solid base of support. The current consolidation at the range of RM 1.40 will be seeing a new growth with the on going economic development that is happening in Sarawak.

KKB will be heading for a good uptrend in the following week should the share price be able to break above RM 1.50 with a good volume. A quick resistant could probably see KKB drawing clashes at RM 1.70, while a medium to longer term outlook should be able to see KKB knocking at RM 2.00.


KKB - A Long Term Affair with Samalaju Industrial Park

KKB had saw it's peak performance in 5 years during the 2013 and 2014 period, which had been largely contributed by the booming economy in Samalaju Industrial Park. KKB involvement in the Samalaju Industrial Park spanning from client from the private as well as public sector.

It's involvement in the Samalaju Industrial Park got intensified when KKB took a step further to be involved in the material supplies for Bakun Hydroelectric Dam, which is designed to cater the power hungry industrial park.

Let's have a quick outlook on the impact of Samalaju Industrial Park towards KKB share price.

KKB had saw an explosive growth under the huge driver of Samalaju Industrial Park, putting almost 100% capital appreciation from it's starting point of around the range of RM 1.40 to RM 1.50.

While the completion of the 1st Phase of Samalaju Industrial Park looks like a departure, the game had actually just started. With the successful launch of the Samalaju Industrial Park Phase 1, now it is time to fuel up the development with a Phase 2 of the Samalaju Industrial Park.

Sarawak Economic Planning Unit had in plan to kick start the Phase 2 of the Samalaju Industrial Park with an allocation of approximately RM 500 million. The core cost of the project includes the site preparation and infrastructure work that will cost approximately RM 330million, water supply system at RM 20million and upgrading of Tanjung Kidurong Road at approx RM 10million. While the phase 1 of SIP had attracted an investment of RM 25 billion from 17 companies, the Phase 2 will not be looking for anything lesser than RM 20 billion. With that in line, new power generator will need to be build as well to cater for the energy thirsty industrial park, putting up the chances of new hydroelectric plant to be built.

Lumping in the whole Phase 2 of SIP, this could be another huge pie with approximately RM 30 billion worth of infrastructure and building project to be worked upon.


Additional Spices - Pan Borneo Highway

Things are not going to slow down in the development of Sarawak with the latest announcement of the approval in the building of the 1663 km Pan Borneo Highway, which cost around RM 27 billion. Sarawak will cover 936km with Sabah taking up 727km.

The project will be built in segment starting with the 40km stretch from Tanjung Datu to Sematan. The next stretch will be the 740km long Semantan to Miri, which will begin construction in the third quarter of 2016. The final portion in Sarawak from Tedungan to Merapok, which is sandwiched between Brunei will see construction in early within 2018 to 2023.

KKB, which had been involved in civil engineering, and a close proxy for sub contracting works from CMSB (Cahya Mata Sarawak Berhad) will definitely be a good beneficiary from all this huge infrastructure development.


All in all, KKB, given at the current price range of RM 1.40, and with so many huge projects lined up, given their proven track record and also huge involvement in the development of Sarawak, notwithstanding the coming up election in the Sarawak State, it is prime time to relook upon KKB

Summarized points
- Huge contender in both public and private sector in the development of the Phase 2 Samalaju Industrial Park
- Huge contender for the RM 27 billion, 1663km Pan Borneo Highway.
- Good network and political ties with the local Sarawak Government.
- Upcoming Sarawak Election, prompting Sarawak counter theme play.
- Net cash company of approx 55 cents a share, and consistently giving handsome dividends for the past 2 years.


Furious on KKB? You decide
Bone's short term TP : RM 1.70

Cheers and have a nice day

Regards,
Bone

http://bonescythe.blogspot.com