KUCHING: KKB Engineering Bhd (KKB) is expected to benefit from the government’s expenditure in rural development especially for the supply of steel pipes for water projects in addition to securing two new purchase orders this month.
According to AmResearch Sdn Bhd (AmResearch), the state govenment could likely announce more rural development projects ahead of the state election due by June next year.
Thus, the research firm believed KKB will be one of the companies to benefit from more rural development projects in Sarawak.
AmResearch added KKB is among its top picks for Sarawakian companies in view of the impending state election.
Besides that, the research firm noted the company could depend on the support of its major shareholder Cahya Mata Sarawak Bhd (CMS) for contract award.
On another note, KKB’s earnings profile is expected to improve significantly given the company’s venture into the oil and gas (O&G) industry through its 42 per cent owned associate OceanMight Sdn Bhd.
In the meantime, the research firm estimated that KKB has secured more than RM30 million worth of jobs year-to-date (YTD) inclusive of the two jobs that the company has recently accepted.
This was on the back of the group securing two purchase orders estimated at RM14.6 million in total.
The company said it has accepted a purchase order from JGC (Malaysia) Sdn Bhd (JGC) for the supply of fabricated steel structures for Tank 7 New Jetty-PAF project for Petronas LNG Train 9 project.
KKB added it has also received a purchase order from Petron Malaysia Refining & Marketing Bhd for the supply of 14kg liquefied petroleum gas cylinders.
The completion date for the supply of fabricated steel structures to JGC is progressive until third quarter of 2016 whereas the completion date for the supply of liquefied petroleum gas cylinders is October 2015.
These contracts are expected to contribute positively to the group’s earnings and net assets for the financial year ending Dec 31,2015 to Dec 31, 2016.