Review Of KNM's Earnings

KNM reported its earnings on 30th Aug 2010. And as expected, it wasn't nice at all.

LOL! 'And as expected'?

Well ... seriously what do you expect from the company when the management was more focused on trying to buyout the company? Yes, where is the company's focus? What's the company's priority?

Is the company focused on making more money?

Was it?

Apparently the company's management was more focused on its management buyout than its own business.

How unlucky for the investing public that the MBO had failed!

Yes... what do you expect? what did I expect?

:P

Posted one time too few....

1. 24 June 2010: KNM: I Just Love The Way The Boss Talks!
2. 26 May 2010: Oh KNM, Can You Please Buyout The Company At 90 Sen? ( How unlucky the minority shareholders the buyout failed! :P )
3. 28 April 2010: I Just Like KNM So So So Much
4. 22 April 2010: Why I Like KNM Even So Much More Today!
5. 21 April 2010: Why I Also Like KNM A Whole Lot
6. 15 April 2010: KNM's MBO Fails
7. 23 March 2010: KNM: Should I Stay Or Should I Go?
8. 23 March 2010: KNM: Do Show Us The Money!
9. 22 June 2009: More On KNM
10. 17 June 2009: Regarding KNM's MD Disposal Of Shares For A Cool RM64 Million ( Did you miss this? Did you? Did you? :P )
11. 26 November 2008: KNM Q3 Earnings (where's the creation of wealth?)
12. 27 Oct 2008: Regarding KNM's Sell Down! ( Did you also miss this? :P )
13. 24 Oct 2008: KNM Comments About BTimes Article (LOL!)

So how poor was KNM's earnings?

Current fy 2010 ytd numbers indicate that 2010 would be another disappointing year and it should be even worse than 2009! Which would means two years of earnings decline!

And if memory does not fail me, KNM became a darling stock because of its spectacular earnings growth ( aha.. the 'engineered' growth via acquisitions and.... debt! :P )

In 2004, it earned only 15 million. 2 years later it earned some 133.5 million. Yup! Spectacular earnings growth and the market loved what it saw and KNM became a darling stock.

And that's not all!

The earnings table above is 'distorted' because KNM's earnings was boosted by the "recognition of tax incentive granted for Borsig acquisition".

Now imagine if KNM did NOT get this tax incentive?

Can you picture how 'good' KNM's earnings was??????

Exactly!

Don't you wish for that so-called 90 sen MBO!!!! :P

Now apparently, MiB ( Maybank Investment Banking yo! And not Men In Black! :P ) disagrees! MiB reckons that KNM is 'recovering'! :P


And the statement that stood out the most was...

• KNM remains a Buy with a RM0.55 TP (9x 2011 EPS). We see limited downside, for most of the operating negatives have been priced in. Reputation rebuilding remains a work in progress.

Limited downside! The classical 'negatives all priced in'!

Huhu! Wiki wiki!

KNM currently down some 9.3%. It last traded at 44 sen. ( That MBO price... how muchie? :P :P )

Now the BUY TP.... based on 9x 2011 EPS.

Sounds reasonable at first sight but apparently stocks and recommendations is unlike love at first sight!

Time to check out KNM's estimates. :P

And MiB 'expected' earnings for KNM is 232.4 million for KNM's fy 2011!

Remember, KNM's ytd 2010 earnings is 54.478 million (which was boosted by some 45.474 million in tax benefits!).

How?

Do you like KNM or not?

:P