Tuesday, November 20, 2012

KNM: ??

Frankly, I do not know how to make of this company, but people I know (my relatives went in big 2 years ago - I hear around RM2.00) probably are still hoping right now, as I dare not ask when meeting them recently. Never ask when you know that the person is losing much in the market, is the mantra. I remember I was asked about this company, during one dinner. I have nothing to say but acknowledging it as a stock for "Play" as well as it is in the much exciting and extravagant O&G sector. I could not make much out of it at that point in time, whether it is worthwhile putting in money. I guess it ain't.

Just look at its share price, 2 years later.

Recent financial performance (including today's) seems decent with a RM40+ million 3rd quarter profit, BUT...notice something amiss...

Intangible assets and goodwill from acquisitions for sure. But the piling receivables and WIP. Cash to borrowings? RM127 million against short term borrowings of RM741 million and total debt of RM952 million. I hear Maybank is supporting this company in terms of financing especially for its purchase of Borsig few years ago.

Besides not knowing O&G sector well enough, I do not think the numbers look good.

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