MIDF upgrades KKB to ‘Buy’, raises TP to RM1.52

KUALA LUMPUR: With new tenders still ongoing, KKB Engineering Bhd’s replenishment orders could rise to RM300mil this year, says MIDF research.

It said in a note that KKB’s new replenishment in 2019 currently stands at RM277.4mil, which has already beat the research house’s forecast of RM250mil.

The research house in its latest update upgraded KKB to a buy call with a higher target price of RM1.52 from RM1.47 previously.

KKB’s outstanding orders come to RM700mil, the bulk of which is derived from the PBH Sarawak Job. It said the jobs should be enough to keep it busy until FY21.

Meanwhile, MIDF noted that there have been reports of KKB’s Ocean Might bidding for three contracts for the fabrication of offshore structures worth about RM355mil.

“We believe that the outcomes will likely be known by early 1Q20, taking into account that bids were submitted in 3Q19,” it said.

Recently, KKB said it had secured several contracts with a total value of RM60.9mil.

The main job comprises construction and completion of a water supply project covering Kota Samarahan to Sebuyau.

The two packages won were dubbed Package 3A and Package 3B, which MIDF says could be part of the Water Grid Project Phase 1.

They are mainly construction contracts, scheduled for completion in December 2020.

In the same announcement, KKB also received orders for the additional supply for MSCL Pipes and Specials, placed by Laras Jaya Engineering, Cipta Wawasan Maju and Cityon Development.

This contract will run from end October 2019 until February 2021. The supply orders are to be delivered in stages in 1H2020.

Source: TheStar