Monday, August 22, 2011

And So KNM Reported Its Earnings ..

KNM reported its earnings.

A 6 months net earnings of just '29.8 million'?

Remember this posting on March 2011? What I Think Of KNM's Earnings Guidance

Let me highlight again:
  • KNM’s management had met with analysts earlier in the week and guided earnings before interest, tax, depreciation and amortisation (Ebitda) of RM363 million for its FY11 (ending Dec 31, 2011), while the Ebitda for FY12 is targeted at RM564 million.
Yup, direct from the management own mouth...

KNM would have an EBITDA of rm 363 million for fy 2011.

And looks like the management is 'pretty good with its guidance' once more!

Yup! Strikes again!

Last posting on KNM was on May 2011: KNM: Are you IN it to win IT? Or are you IN it to LOSE IT???


Avatar said...

Sometimes, I wonder whether it's good to be too prudent.

I told myself KNM was too expensive at RM0.50 but here it is at RM1.50 and I'm scratching my head.

Same for Air Asia... heh hardly worth RM1 but here it is @ RM3+. Meh, is the world crazy or are we just too.... cautious :)

Moolah said...

I told myself KNM was too expensive at RM0.50 but here it is at RM1.50 and I'm scratching my head.


KNM last year had a share consolidation of 4 into 1.

so 1.50 is actually a worse pricing than 0.50. :P

K C said...

KNM's ebitda for the half year 2011 is 78 m, and if annualized, 156 m. That EBITda amounts to less than half of the management guidance. KNM is a "big head devil". If you look at its earnings, 6 month pretax earnings is 8 m, or just 0.8% of the turnover. What is its ROE? 0.5%! Having more than a billion total debt, it just needs the interest rate to go up by 100 basis points to wipe out any profit! Some more the management keep on giving false hope to investors, just to do the wrong thing; to boost up share price. Do you want to invest in this type of company? KNM is too expensive at 50 sen is one of the most outrages investment understatements of the year!

Moolah said...

K C: Agree! And I made a new posting here:

Avatar said...

Moolah and KC,

Thanks to you 'sifu' for your advice. Oh, KNM had a share consolidation... that explains a lot. I don't think I'm that *bad* compared to some of our analysts or CEOs on their stocks, right :D

Yeah, I know both KNM and Air Asia are hugely debt laden companies, which... means their shares are worth-less. That's why I'm amazed that their share prices are still so high (relatively).

Still waiting for a depression to assist in the spring cleaning but with the US Fed intent on QE priming, that may never happen.

K C said...

Moolah, you are wrong again. See the following statement from MIDF Research today.
"Maintain BUY Revised Target Price RM1.90."
"We have adjusted downwards our targeted PER for KNM to 10x (from 14x), which is the average multiple for the past 3 financial years."
"From asset valuation perspective, further downside should be cushioned given that KNM is trading at only 0.81x price-to-book, which is at the low end of its average FY08-FY10 band of 0.79x-3.15x."
MIDF Research expects KNM to earn 19 sen per share (RM1.90/10)for FY2012. KNM earned only 0.8 sen so far for first half of 2012!
KNM only trading at price-to-book of 0.81? KNM's book value includes goodwill and intangible asset of 1.5 billion and PPE of 770 m. How real are these so-called assets?
Seriously who is this analyst whom the public suppose to depend on his analysis? I am sure he is a qualified CFA. He cannot be so stupid. I mean it, stupid! No, I am more inclined to believe that there are "prawns behind the other side of the stone".

Moolah said...

K C: now... now... calm down.


Remember the posting "History Repeats As KNM Tanks On Extremely Weak Earnings"

You actually wrote :
"MIDF Research maintained a Buy on KNM with a target price of RM3.20 while Maybank Investment Bank Research was more optimistic, keeping KNM as Buy with an unchanged target price of RM3.20."

hehehe... so their revised target price is now 1.90....

See the English language is such a nice language. It allows creativity.

So from 3.20 to 1.90... it's called a price revision.

Wonder why they don't call it a price.... Downgrade?



Moolah said...

K C: from RHB: (why RHB so liddat one? :P )

Forecasts. We believe the current quarterly results highlight that things are unlikely to get better in the near term for KNM. As such we are reducing our FY11-13 EBITDA margins to 8.5%, 10.5% and 11.5% respectively (from 11.0%, 12.5% and 13.5% previously). This leads to a 68.9%, 35.8% and a 28.1% cut to our FY11-13 core net EPS forecasts. The improved margins for FY12 is expected to come from the Peterborough project which we expect to achieve financial close earliest by end FY11, which would mean a start in earnings recognition in FY12.

Maintain Underperform. The stock has continued to negatively surprise the market and going forward, this may reinforce our view that the stock deserves to trade at a discount to sector peers. Our fair value is reduced to RM0.93/share (from RM1.45/share previously) based on FY12 PER. We maintain our Underperform call on the stock.