KKB (9466) : Strong Earnings Maintained
For QE30/6/2019, KKB's net profit rose 76% q-o-q or 215% y-o-y to RM5.6 million while revenue rose 2% q-o-q or 29% y-o-y to RM120 million. The Group's revenue rose y-o-y due mainly to the increased revenue from the Group’s Engineering Sector, in particular, its Civil Construction and Steel Fabrication divisions. Concurrently, the Group’s pre-tax profit rose 219% y-o-y on the back of higher revenue and improved profit margin recognized from the Engineering sector.
Apart from the on-going major Steel Fabrication jobs i.e the D18 Phase 2 Project for the Provision of Engineering, Procurement, Construction, Installation and Commissioning of Wellhead Platforms for Petronas Carigali Sdn Bhd and the Provision of Procurement & Construction of Wellhead Deck, Piles and Conductors for the Pegaga Development Project, the commencement of the two new pipe laying projects secured in February 2019 from Jabatan Bekalan Air Luar Bandar Sarawak (Package SR1 & Package 1C) implemented under the Sarawak Water Supply Grid Program has started to contribute positively to the Group’s revenue and earnings.
Table: KKB's last 8 quarterly result
Graph: KKB's last 48 quarterly result
KKB's financial position as at 30/6/2019 is deemed satisfactory, with current ratio and gearing ratio stood at 2 times and 0.6 times respectively.
KKB (closed at RM1.43 yesterday) is now trading at a trailing PER of 16x (based on last 4 quarters' EPS of 9.02 sen). At this PER, Dufu is deemed fair.
KKB has broken above its long downtrend in February 2019 at RM1.00.
Chart: KKB's monthly chart as at Aug 15, 2019 (Source: Malaysiastock.biz)
Based on improved financial performance, satisfactory financial position and fair valuation, KKB is still a good stock for long-term investment.
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