For QE31/12/2014, KKB's net profit soared by 581% q-o-q or 181% y-o-y to RM8.3 million while turnover increased by 47% q-o-q or 39% y-o-y to RM66 million. The overall improved performance was attributed by the improved performance from both the Steel Pipes and Steel Fabrication divisions, contributing RM61.5 million (93%) of current quarter’s revenue as compared to RM38.3 million (85%) registered in the preceding quarter.
Table 1: KKB's last 8 quarterly results
Chart 1: KKB's 30 quarterly results
Valuation
KKB (at RM1.25 yesterday) is trading at a trailing PE of 15 times (based on last 4 quarters' EPS of 8.1 sen). At this multiple, KKB is reasonably valued. If KKB can maintain its earnings going forward, its yearly EPS could be 13 sen. This could lower the PE to less than 10 times.
Technical Outlook
KKB is consolidating in an expanding triangle. Since it has tested the lower line at RM1.20, there is a good chance that the stock may rebound in line with its recovery in earnings.
Chart 2: KKB's weekly chart as at Feb 17, 2015 (Source: ShareInvestor.com)
Conclusion
Based on improved financial performance & mildly positive technical outlook, KKB could be a good stock to consider for investment.
Note:
In addition to the disclaimer in the preamble to my blog, I hereby confirm that I do not have any relevant interest in, or any interest in the acquisition or disposal of, KKB
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