KGB 151 KELINGTON GROUP BERHAD robust orderbook to save the day?
Kelington Group Bhd (KGB) has seen its share price slid from a 52-week high of RM1.65 in February this year to current levels of RM1.35.
But good news is that the counter is still trading above its low of RM1.06 in July last year.
Oover the past 12 months, KGB has performed commendably, rising 17.3% to RM1.35 on May 22.
But RHB Research is calling for a hold recommendation on the stock at current price although it expects higher target price of RM1.41.
It may seem strange that the research house decided to give the company a ‘hold’ recommendation when it has given some 4.4% upside in terms of share price.
According to RHB Reearch, it stayed neutral to factor in the more cautious sentiment in the tech sector and the normalisation in industry prospects.
However, KGB has proven to be a star performer based on its recent 1QFY23 numbers, which exceeded analysts’ expectations.
KGB’s 1Q23 core earnings of RM16.3 mil was up 95.4% YoY, ahead of expectations, at 26% of RHB’s full-year estimates.
While revenue dipped sequentially on seasonal factors, the higher revenue contribution from the process engineering (PE) and industrial gases (IG) segments boosted the group’s gross profit margins to 12.3% (4Q22: 10.4%).
However, on a QoQ basis, its core earnings contracted 10% due to higher financing costs of RM3.3 mil versus RM1.7 mil in 4Q22.
KGB saw positive growth across all segments.
Its ultra- high purity (UHP) segment revenue surged 63% YoY in 1QFY23 from higher revenue recognition across all markets, and remains the largest contributor to group revenue, accounting for 60%.
The PE unit’s turnover surged almost 200% YoY to RM35.7 mil primarily from the tank pit expansion project secured in 4Q22.
Revenue from IG business rose 145% YoY due to higher utilisation rate of KGB’s liquid carbon dioxide plant of 91%, boosted by its penetration into Oceania countries.
Kelington’s balance sheet remains healthy with net cash position of RM13.5 mil as at March 31.
The outlook looks good with RM568 million new contracts secured as at end-April and supported by a RM2.27 billion outstanding orderbook.
Notably, KGB clinched a major contract amounting to RM102 mil in Singapore in April, marking its first contract to provide a fully customised chemical delivery system.
RHB expects KGB to be able to weather through the broader slowdown in semiconductor sales.
The research house raised its FY23-25 earnings by 4-5% after increasing its orderbook replenishment assumptions.
KGB has highlighted that it is seeing a healthy rate of orderbook replenishment across all segments.
Concerns such as high receivables and lower profit margins due to rising raw material costs may have had an impact on investors’ sentiments.
The positive momentum for KGB is likely to continue, outweighing concerns that may hold investors back from putting funds in the counter.
#KGB
https://xifu.my/OpinionsComment.aspx?BID=B03260741P1AA0DC
Singapore Investment
-
-
-
6 Career Tips to Thrive in a Weak Job Market59 minutes ago
-
-
-
-
-
-
-
-
-
-
-
-
-
MM2 Asia: Not Worth At Current Share Price21 hours ago
-
-
Got money, how to invest?1 day ago
-
SBOCT25 GX25100S is 1.93%1 day ago
-
-
-
-
-
-
-
-
-
-
-
Month of August 20253 days ago
-
August 2025 Updates3 days ago
-
Portfolio Update August 20253 days ago
-
CDC Walking Trails Giving FREE Money3 days ago
-
-
Are We Fickle-Minded?3 days ago
-
-
-
-
-
Portfolio (Aug 31, 2025)4 days ago
-
Portfolio (Aug 31, 2025)4 days ago
-
-
-
-
-
-
-
-
There is No TOMORROW1 week ago
-
-
-
-
-
LongBridge1 week ago
-
-
-
Cory Diary : Cash Flow 2025-081 week ago
-
Why SGD ETFs Deserve a Second Look1 week ago
-
Decoupling1 week ago
-
-
-
Quick Update1 week ago
-
-
-
-
-
-
-
-
-
-
Why Buy Always Drop? (Vice versa)3 weeks ago
-
-
Been a while!3 weeks ago
-
-
-
-
Endowus Promotion TnC4 weeks ago
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Thakral - Gem life deal finally coming?3 months ago
-
Clarity3 months ago
-
Selling HRnet and Fiverr3 months ago
-
-
FAQ on Quantitative Investing Part 24 months ago
-
-
-
Crossing the 300k Mark [in a volatile period]4 months ago
-
-
-
-
ETF vs Mutual Fund: Which is Better?7 months ago
-
-
-
-
-
Arigato Everyone! A Decade of Blogging!8 months ago
-
Top 10 Highlights of 20248 months ago
-
-
Union Square Residences10 months ago
-
-
-
STI ETF11 months ago
-
-
-
Unibet Casino Bonus Codes 202411 months ago
-
-
-
-
-
Monthly IBKR Update – June 20241 year ago
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Monthly Summary of November 20231 year ago
-
Migration of website1 year ago
-
-
-
-
-
-
Hello SP Group, I'm Back!2 years ago
-
-
-
A New Light2 years ago
-
-
-
-
-
2022 Thoughts, Hello 2023!2 years ago
-
Series of Defaults for Maple Finance2 years ago
-
Takeaways from “Sea Change”2 years ago
-
Greed is Coming Back2 years ago
-
-
-
-
-
-
-
-
What is Overemployment3 years ago
-
Terra Hill Condo (former Flynn Park)3 years ago
-
Alibaba VS Tencent: The Battle Royale3 years ago
-
-
-
-
-
-
-
-
-
-
-
-
-